Rental Center -- Power Play
As customers change, so does Ameritemp’s approach to serving them.
Featuring Ameritemp -- Al Favia and Bobbie Cavaness, Johnsburg, Illinois
By Clair Urbain
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Bobbie Cavaness and Al Favia, owners of AmteriTemp. |
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C. J. Malueg, diesel technician and Chuck Wirsz, shop manager, work on a portable generator that’s in-between rentals. |
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| Ryan Corkill, rental equipment specialist, is one of several employees who play a key role in building custom rental units for portable power generation and distribution. |
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| AmeriTemp's heaters are prepped and ready to rent for the busy winter season. |
The greatest challenge that AmeriTemp faces today is a shifting customer base.
Although it’s continually lauded for its customer service, owners Al Favia and his wife, Bobbie Cavaness, see less customer loyalty than in the past. They are also experiencing customers who increasingly prefer to order rental equipment and even buy equipment online.
AmeriTemp was started in 1995, primarily providing temporary heating systems to commercial construction contractors. From there, it started offering temporary cooling and then portable dehumidification equipment rentals, which brought them into generator and light tower rental. Today, 60 percent of its business is commercial construction and industrial and 40 percent is big-event power and air conditioning.
“There have been growing pains,” says Favia. “We started in Arlington Heights, Illinois, and since then have moved two times. It’s impossible to keep equipment out in the city so we relocated in Johnsburg, which is on the north side of the Chicago metropolitan area.
“We have had 54 percent growth from 2013 to 2017,” says Favia. Much of that has come from online sales of smaller, yet increasingly important products and equipment.
Its present location sits on four acres and has 35,000 square feet under roof. Four buildings are used for equipment repairs, storage and front- and back-office functions. Today, more than $10 million in inventory ranges from portable generators, light towers, heating and air-conditioning units and power distribution equipment. It also sells a wide variety of this type of equipment online from a variety of suppliers.
Midwest focus; nationwide coverage
“The Midwest is really our forté, but we’ve been known to go to other states with rental units,” Cavaness says.
The company serves three distinct markets: construction, industrial and big events. While they tend to look at construction and industrial customers as one business segment, those customers’ needs are quite different. “My background is in concrete construction. The construction world always needs the equipment that we have. Our industrial customers look to us when they have planned shutdowns or emergencies,” he says.
The big-event rental operation is more seasonal. “When it comes to events, that’s mostly summertime revenue, from Memorial Day to Labor Day. We provide power for events like Country Thunder here in Twin Lakes and we also work with them in Arizona. We assist in a lot of other big events with other companies of this nature,” Favia says. “We also provide power for movie shoots and television programs.” If the site needs heating, cooling or outside lighting, AmeriTemp provides that as well.
Changing customer base
Compared with conducting business in the ’90s, Favia says today’s customer base changes often. “Customers are not as loyal as they used to be. Back in the ’90s, you could have a guy who would just call you religiously for everything and it didn’t matter who else walked through the door. Today, it’s not like that.”
In addition, competition has increased dramatically. “There are many more competitors. Everybody thinks they can dive in to provide equipment. The big guys have a different mindset. They’re more geared to utilization where I’m more geared to taking care of the customer. In the end, that has helped out business,” he says.
Making equipment rental-ready
Favia and Cavaness agree their greatest point of difference is their ability to fabricate equipment that is purpose-built for rental. “The national chains order their equipment already customized or send it out for any customization, but we do it all here,” says Favia. “We have our guys who are physically in the field working with that equipment playing a big role in making our units rental-ready. They know what they are looking for in the field and they know what situations they run into in the field.”
AmeriTemp is somewhat unique in the fact that it will also sell its custom-made equipment to customers. “Most of our competitors won’t sell their equipment like we will. For example, if a customer wants to buy a 25-ton air conditioning unit, we are happy to offer one from our rental fleet or we’ll build a new one. Many times, we end up building new for them,” Favia says. “We can do it two ways; sell them a generator on a skid, or go completely rental-grade and rental-ready with a crash cage and distro (electric distribution equipment) included.”
Generators are by far the company’s top rental item and the 50 to 100 kW models are the most requested units. Supporting distro equipment is also a top rental item. “We even supply distro to many of our competitors. When a competitor gets an event, they will come to us for specific distro equipment. If we don’t get the business, we indirectly partake it because nine times out of 10, some of the equipment is coming from AmeriTemp. It’s re-rental; we’ve built a niche with it. Instead of fighting with them all, we work with them.”
Maintenance matters
Favia and Cavaness don’t follow common equipment replacement cycles, selling off units as they near the end of their warranty periods or when they reach a certain number or hours or age. “Al is meticulous when it comes to maintenance,” says Cavaness. “For example, when our heaters come back in after winter, our guys power wash them and even sand them down and repaint them if they need that. We go through everything.”
“I still have the first generator I rented,” says Favia. “We do a lot of maintenance and to me, that is key. It’s key to keep your equipment in top shape because your utilization and your return on investment is going to be better. I’m not going to say we’ve never let a piece go, but we don’t have a timeframe. When it gets to the point where you’re going to dump more money into it and technology has passed the equipment by, it might be time to bring in something newer.”
However, Favia says Tier 4-compliant engines are not an example where technology offers a differential advantage to a rental firm. “No rental customer has ever requested Tier 4-compliant engines in equipment. They are more expensive and break down more often so there are more headaches. If that equipment goes down, we’re the ones who look bad.”
Cavaness agrees. “Our customers would rather have the older equipment that’s not Tier 4-compliant.”
AmeriTemp’s staff heads off many potential problems by thoroughly going over the equipment with rental customers when it is delivered. Simplicity is designed into rental equipment so setup and operation is straightforward. “We want to make sure everything’s hooked up right and they don’t run into problems,” says Cavaness.
“We don’t specifically call it customer training, but it’s part of our generator or air conditioner setup process. From starting the machine to adjusting controls to explaining what to do if it stalls, delivery persons make sure the customer is comfortable with it before they leave,” Favia says. “Nine times out of 10, we end up having to go back when we don’t fully explain the equipment to the customer.”
Building online presence
The most fundamental change to AmeriTemp’s rental business has been the switch to online sales of a variety of smaller support equipment that customers increasingly demand. “Today, 45 percent of our customers are reaching out to us via a mobile device. We have added many products for sale online, which helps increase our sales levels,” Favia says.
A consultant helped build the online store at www.ameritempgroup.com. “We’re constantly changing it to keep it fresh,” he says.
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