WHEN Mick Caddy bought into the Mr Rental South West franchise in Bunbury in 2006, a single player dominated the household appliance rental market – Radio Rentals.
WHEN Mick Caddy bought into the Mr Rental South West franchise in Bunbury in 2006, a single player dominated the household appliance rental market – Radio Rentals.
Starting with just one employee, Mr Caddy piggybacked on his much larger competitor’s market penetration, to the advantage of his own business.
Radio Rental’s marketing budget facilitated overall growth in the relatively underdeveloped rental sector, which flowed through to Mr Rental.
“Our opposition are very competitive. They have increased their marketing to an all-time high,” Mr Caddy told WA Business News.
“But they are helping create an expectation that renting is a great way to go. Also, most people will always get two quotes, so this means we are getting increased calls because of their advertising.
“We have the edge over our competitor now because we can approve our customers over the phone and deliver on the same day every time.
“But in 2008-09 we created an extremely fast-growing business that caught us slightly off guard.
“The problem we created was that we were more successful than we anticipated and our staff were under increasing pressure to take orders, get the product ordered, delivered and contracts entered into the system so we could get paid.”
To cater for the rapid growth, Mr Rental redefined its marketing plan, while investing in training and growing its workforce to alleviate the pressure on Mr Caddy and his wife, Bronwyn.
“We have, over the last year, conducted a large branding campaign to boost our brand in top-of-mind awareness,” Mr Caddy said.
“We concentrated on local area marketing and gave out referral gifts to our customers if they referred a friend.”
Mr Rental now contributes to a central franchise-marketing fund to advertise on television, radio, in catalogues and the Yellow Pages.
The company will increase its television and catalogue campaign from four campaigns in 2009 to five campaigns this year, as well as doubling its radio advertising package.
“They are all targeted around a door-buster special, with the catalogues usually comprising of four to eight pages,” Mr Caddy said.
“This is all backed up with an up-to-date website that customers can view and order products online and even choose their delivery date and preferred time.
“We also have a half-page advertisement in the Yellow Pages, which has proven itself over the three years as a successful medium.”
The strong marketing campaign has led to an increase in customer enquiries – from 65 per month to about 110.
Mr Rental also started the Keeping Life Simple Club, which rewards customers for loyalty, allowing them to redeem points earned for products they rent for use towards future rentals.
Mr Caddy said the introduction of new products was another way to grow the business, with a 20 per cent increase in growth in its furniture line and 7 per cent with fitness equipment when more items were introduced.
The average number of items rented per customer has increased from 2.4 in 2007 to 3.5 last year.
Two assistant managers were employed to alleviate pressure on Mr Caddy and the business implemented its own proprietary software – CAIRO (Customer Acquisition and Integrated Rental Operation) – which is used for stock management, accounts, and integrated scripts to log customer enquiries.
Mr Caddy said he was at a stage now where he spent 80 per cent of time on business and 20 per cent in it.
“We had to increase our team by employing an additional two team members to maintain a high service level while catering for the increase in demand created from the additional marketing activities,” he said.
“A second delivery vehicle has also been acquired, ensuring we can immediately deliver or service equipment in the case of a breakdown.
“The investment is substantial financially, however essential for the growth of the business.”
Mr Caddy said the business’s primary challenges have been ensuring sufficient team training, and the delegation of specific tasks to increase efficiency.
“This has taken the pressure off me and allowed me to focus on the business instead of working totally within it,” Mr Caddy said.
“Once we had a great efficient team we had to find ways of keeping enough items in stock to keep the business moving at the rapid speed we had created.
“We put in pallet racking and purchased a forklift, which has allowed us to keep more rentable items on hand and buy them in bulk to save money.
“Our national support office ran training sessions in Perth, along with our fellow WA Mr Rental franchisees, and all our team attended.”
Mr Caddy said it was important to plan for growth and be a year ahead.
“Train staff as often as you can afford it and train them to take ownership of not only their part of the business, but to be able to adapt to another position within the business if possible,” he said.
Mr Rental South West is part of the international home appliance rental business, Mr Rental Australia, founded by Glen and Kerrianne Hickman in 1991, on Bribie Island, north of Brisbane.
