Strength in numbers: Maria Hadlow talks to System Lift's Leopold Mayrhofer
By Maria Hadlow08 September 2009
According to the European Powered Access Rental Report, recently produced by IPAF, Germany is among the least likely of the European countries to rent equipment.
Yet, despite this and the economic climate which has hit all of Europe and the construction industry, the German rental partnership organisation, System Lift, is thriving. It reports rising membership - over 70 members now in Austria and Switzerland as well as Germany - and a fleet of over 7000 machines enjoying good utilisation.
There is something very appealing about a group of smaller independent companies banding together against the might of the mega-rentals. System Lift is not unique in creating a cooperative organisation but the passion of Mr Mayrhofer for creating opportunities for his members and providing a good service for their customers is clearly a driving force.
In the 1990s Mr Mayrhofer was involved with running an access rental franchise in East Germany, Ring Lift. The model worked because rental was a relatively new concept in the region and there were good financial incentives to help set up businesses there. Mr Mayrhofer realised he would have to modify the model if he wanted to bring it to western Germany where the rental market was much more established and new business set-ups were a far more expensive enterprise.
System Lift was established in 2002, In selecting member companies for System Lift Mr Mayrhofer looked for existing companies with a good reputation, by 2003 he had 40 members. Each member has their own designated territory and an equal number of shares in the company - companies only retain their shares while they are members.
Members pay a fee to belong to System Lift but for that the organisation carries out marketing and training and negotiates preferential deals on equipment. End of year profits are paid as dividends.
"Although members still get orders direct," says Mr Mayrhofer, "our marketing efforts resulted in between 5000 and 6000 enquiries coming in through the central office which were converted to contracts." Enquiries which come in centrally are redirected to the member company in that territory.
System Lift runs its own training scheme: a specialist training manager and individuals from member companies can be trained to train their own customers and those of other System Lift partners.
Trained operators receive a System Card which, says Mr Mayrhofer, is widely accepted around Europe.
System Lift Partners also benefit from the discounts that can be negotiated with manufacturers for larger orders - discounts they would struggle to achieve if they were a stand alone rental company. In 2008 System Lift spent €36 million on equipment.
Partners can only buy from manufacturers whose equipment has been approved by System Lift, this is one of the company's policies to ensure the quality of the fleet. Should a member company want to buy a new machine brand the product and manufacturer is thoroughly investigated before it can be added to the list.
It is one of Mr Mayrhofer's pet hates when manufacturers send machines into the market when they have not been fully tested, "Rental companies cannot afford to be unwittingly beta testing machines for manufacturers," he says.
Member benefits are clear but what do the end users gain from using a System Lift partner over a large, rental company with countrywide depots?
Mr Mayrhofer believes that his members can provide a more individually tailored service. For example, "System Lift members can rent a company one machine for just one or two days - they know the area and the logistical problems they might encounter, machines are delivered when promised. In addition they can respond quickly to any service or repair needs."
If your local System Lift partner does not have the required machine in the fleet it can be acquired from another partner who does have it. Similarly contractors who work across Germany can still do business with just one partner even though machines are delivered, serviced etc from the partner nearest to the job.
To guarantee that customers always receive the same standard of service a qualitative inspection is carried out on each partner every two years. "We check machine quality, office service and training standards," says Mr Mayrhofer. "We have to be sure that everything is of equal quality - rental prices, transport service, everything."
Construction is down worldwide and Germany has also been badly affected by a depressed automotive industry. The German rental market like every other is in decline and, says Mr Mayrhofer, rental prices are going down.
"This is a bad market for the big rental companies with lots of staff to support," he says. "Big rental companies need the big building contracts. In Germany there tends to be a lot of smaller contractors each with their own suppliers and rental lines.
"Each of the System Lift members has lots of customers and long, often personal, relationships with them so these market conditions are less damaging. Our utilisation rates are down, but only by 20 to 30% which isn't too bad and that is down to individual sales strength."
Mr Mayrhofer is positive about the future, "There are about the same number of powered access machines in Germany as there are in the Netherlands," he says. "There is lots of scope for growth, particularly in low-level access."
Mr Mayrhofer believes that a lot of the salesman's job is in fact finding and listening to his customers' problems, that way he can introduce the productivity benefits of his equipment, "Education is the best way to get business not price cutting," he says.
System Lift also helps its members out with sales training, "70% are very good," says Mr Mayrhofer, "30% are a work-in -progress."
Helping to improve the member's businesses, finding them new customers and passing on new skills is a source of great satisfaction to Mr Mayrhofer - particularly gratifying he says, in the face of the current economic situation.