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Sycor.Rental Solves Challenges 
in the Equipment Rental Industry 
Part 3 of 3
Sycor.Rental: equipment rental software

How to use Sycor.Rental to Navigate Three Common Challenges in the Equipment Rental Industry
Part 3 of 3

June 17, 2024

Part 3: Management of Complex Pricing Models

Management of Complex Pricing Models in a Competitive Environment

The equipment rental landscape is characterized by the presence of several local or regional operators as well as some major national players with locations spread across the country. Due to this fragmented picture, customers typically have a variety of options when it comes to choosing which operator to rent from. This competitive pressure can result in pricing strategies to be quite aggressive in the industry. Therefore, choosing the right pricing strategy as well as having an IT platform that provides flexibility in the setup of pricing structures can be an important competitive advantage for rental companies. Since rental companies operate in a dynamic environment that is defined by fluctuations related to seasonal demands and frequent changes in maintenance cost, interest expenses, competitor rates, and equipment values, pricing flexibility and adaptability is key.

With  Sycor.Rental, equipment rental companies can choose from a wide variety of pricing models that support time-based, usage-based, and lump sum pricing. Equipment rental businesses that use a flat rental pricing model, such as $x per day, week, or for a 28-day period, are equally supported as those that are charging prices per mile or hour of equipment usage. Even more complex scenarios that require pricing to be a mix of a flat fee per day complemented by a usage-based rate, for instance, can be managed. In addition to that, the system not only supports rental rates to be setup as fixed prices, but it also allows for prices to be configured as a percentage of the base price. To facilitate management of seasonal fluctuations in demand and account for the local or regional differences of a fragmented equipment rental market environment, Sycor.Rental further supports branch specific pricing as well as pricing configurations that only apply during specific times of the year.

The flexibility of the solution’s pricing configuration is most substantially defined by the various levels of granularity that it supports. Rental rates and discounts can be set for individual customers, a group of customers, or all customers. Similarly, prices can be defined per equipment category, per individual asset, or even based on specific equipment configurations. To use an example: rental companies commonly employ special pricing strategies to retain high-value recurring customers that typically rent equipment for extended periods of time. To do so, they offer these key accounts a special, discounted monthly rate. At the same time, for all other customers, they may still want to charge the regular daily base rate to generate acceptable profit margins even for rentals of shorter duration. Since every equipment rental transaction is typically associated with significant costs due to preparation, handling, or transportation activities, equipment rental companies often use more sophisticated pricing strategies to incentivize long-term rentals, and thereby, reduce transaction frequency. With Sycor.Rental, equipment rental businesses are fully equipped to also handle these more complex pricing scenarios, such as graduated pricing mechanisms or bundle pricing.

Sycor.Rental ships with a so-called “best-pricing” logic. If configured, the price calculation engine ensures that customers automatically receive the “best” price combination (typically out of a daily, weekly, and monthly rental rate) based on the invoiced duration of the rental period. A “best-pricing” strategy is typically used by equipment rental companies in scenarios where they would like to frontload the invoice amount per rental period to incentivize long-term rentals and to make sure that the profit margin on short-term rentals is still sufficient given the transaction cost associated with each rental. In addition to that, pricing structures for which each time interval is included in the billing with its respective price on a pro rata basis are also supported. All in all, the pricing flexibility as well as the ability to manage complex pricing scenarios provides equipment rental companies with a distinct competitive advantage that can lead to greater customer satisfaction, higher retention rates, as well as increased fleet utilization and company profitability.

Based on three selected, yet highly relevant, challenges that equipment rental companies are facing due to inherent industry characteristics and the current market environment, this blog post has illustrated how Sycor.Rental can be THE solution for your rental business..

If you would like to find out more about our solution and how it can support your business, please feel free to reach out. We will be happy to answer your questions.

- Merlin Witt, Functional Consultant, Sycor Americas

We hope you enjoyed this three-part series on Sycor.Rental. Please visit frequently for more insightful information on the equipment rental industry.

Want to learn more about Sycor.Rental? Get in touch - see our contact below.

Your contact person for Sycor.Rental

Helge Roth

CEO & President
Sycor Americas
+1 412 275 3108

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