Interview with klickrent
Renting construction equipment online
Since 2014, klickrent has offered a cross-manufacturer platform that enables construction equipment to be shared, hired, and lent online. Professionals can use the website to search for specific machines, identify available options within their region and directly compare prices. Klickrent is an independent spin-off company of the Zeppelin group, which offers construction equipment and engineering services. CEO Sören Ladig explains the details.
(This interview is part of a larger dossier called "Construction Start-up Radar")
- What will the construction industry look like in 2020? What role does digitalization play?
The digitalization of the entire construction site and every step of its value chain, from planning to building, operation and management will strongly and consequently be pushed forward. One important part of will be BIM. No construction company will be able to ignore BIM in 2020. To be able to work with BIM the three most important elements of every construction project, the “three M”, men, machine and material, have to be digitally harmonized and coordinated to the best of their ability. Digital planning with BIM means a significant reduction for both the deficiencies and the transfer of risk to the next construction-phase. One of the most important aspect of the digitalization of the construction industry is an efficient and cost-saving building-process.
The growing housing demand, as well as the megatrend urbanization will challenge the construction industry enormously. The demand for additional and affordable living space is growing every year. We need to build cost- and time efficient. Digital innovations and solutions will help to tackle this challenge. Automatization, building without (or just a few skilled) people involved, is another big aspect of the digitalization of our industry.
- What is your business model? What makes you and your company unique?
We believe that klickrent is turning the world of machine hire upside down. Companies can use our digital platform to rent or lend machines and equipment online. The rental business has been carried out by phone, e-mail and fax. Our marketplace makes this buisness more transparent, efficient and profitable for owners and hirers alike. We are offering online services including real-time machine availability and dynamic pricing, direct booking, and basic fleet management. We build up a search, pricing and booking engine from scratch as well as an entire asset management system. We are the digital front end for all manufacturers, dealers, owners and entrepreneurs looking to hire out equipment.
When providers connect with the klickrent system, our Lessor Portal enables the parties involved to register and manage their product portfolio in real time online. They can set their price models and profit from a real time dynamic pricing system. It is similar to Airbnb, instead of apartments you offer machines. Large suppliers, on the other hand, can connect through an application programming interface (API) to the ERP systems. We offer them market access in real time to assure availability and price calculation of assets including all additional costs such as transport and insurance. Thus, klickrent makes it possible to map fleet management via the platform. That is a significant added value for our customers.
In a market that is strongly driven by offline factors, klickrent makes renting profitable once more and significantly boost the rental penetration rate in Germany and abroad.
- What is your company vision (5 years)?
Our long term goal is to formalize and digitize the way how renting of machines and tools is done today as well as building a transparent and extensive online marketplace. Beyond this we want to create intelligent systems which create an added value for our customers. We want to know the need of a customer before he has realised it. That means we want to predict exactly who needs a machine when and where and for which purpose in order to be able to offer solutions at the needed moment. We aim to close the cycle of the construction industry with our digital innovations and the rental part is just the beginning. To achieve this goal we will also profit from the support and experience of our parent company Z Lab (the new founded 6th business unit of the Zeppelin GmbH).
What concerns the rental market, we want to do away with the classic understanding of the roles of renters and owners and professionalise sharing in rentals. A typical renter, such as a building contractor, can with the help of klickrent hire out equipment itself, get its own machines or equipment published online and rent them out. Owners can easily become renters themselves via the platform if machines for a project are not available and therefore need to be rented from third parties. This shift in what used to be fixed roles means that the possibility of consolidation of the entire market cannot be discounted.
To open up the construction market with digital solution klickrent is already characterised by the open nature of its platform. The ability to create interfaces with other systems makes it possible to quickly and easily integrate different digital business models. One of the latest examples is the Maschinator project, an agency platform that brokers professional contracts for construction machine operators throughout Germany. This project allows klickrent to place the right personnel at any site in Germany at which machines are deployed. Another step toward the digitalization of the whole value chain. Thanks to the transparency of the marketplace, the ease of access to the platform and the fact that equipment can be hired out throughout Germany, the share of rented machines and equipment can be increased, and we can make a significant contribution to the rental penetration rate. The aim of klickrent is to become a one-stop solution for everyone involved (in the construction industry).
- What does your revenue model look like?
Our profit model is transaction based. We either take a percentage of the rentals revenue (transport, insurance and service costs are excluded) or a lessor defines a minimal price for which he wants to rent out his machine. klickrent adds a certain percentage to this price, which will be retained by us. Both ways are a win-win-win situation for the lessor, klickrent and the renter. A lessor profits from additional revenue of the marketplace and the renter can profit from a price transparency he never has seen before and decides upon the best offer. klickrent earns money only when the transaction is successfully completed.
- How is your company funded?
Zeppelin Rental came up with the original idea for klickrent in 2009. In 2013 they decided to put it into practice and hired Sören W. Ladig as a digital expert. In 2014 he started building the company in Berlin. The disruptive business model of klickrent, which is basically directed against Zeppelin Rentals current core business, aims to contribute future and sustainable added value to the Zeppelin Group. It is the flagship project and digital-incubator for further initiatives. In the meantime Z Lab was founded, where we strive for digital innovation. End of 2016 klickrent became part of Z Lab and is therefore now an integral part of the Zeppelin GmbH.
- As a start-up, what is your next goal? What partners do you need?
The digitization of the renting process is only klickrent’s cornerstone. There are many different applications for additional digital services. For example in case of machine damage, the renter can order a service partner to repair the machine with just a few clicks. klickrent is also looking for partners offering transport and insurance solutions or work with educated technicians.
Another major topic is the internationalisation of our business model. We want to enter into strategic partnerships to open up international markets. We want to conquer other industries, such as agriculture, landscaping logistics, facility management, event, film and more. We want to grow bigger in terms of our customer base, completed renting transactions over the platform and of course in terms of revenue.
- Who are your key clients?
Our clients are construction companies, construction suppliers, builders merchants, facility management companies but also rental companies and equipment manufacturers.
- What are the biggest challenges your clients are currently facing?
The main challenge for us is making our services as easy, quick and transparent as possible. Companies have neither the time nor the financial resources to digitize their business themselves or to gain reach and online convenience. Therefore they can use klickrent as a platform to develop their online sales channel and, through it, tap into new customer groups. Challenges range from the full utilisation of machinery parks to the integration of assets, i.e. machinery, equipment and accessories, or processes.
- What options do you offer to potential clients to face their challenges (e.g. workshops, coachings)?
We organise regular events and round tables to inform and update our partners, customers and interested parties about the latest topics about online renting and digital transformation in the construction field. We also create onboarding documents and tutorials for lessors. We have technical project managers in place to manage bigger and more complex integration cases. A support team helps whenever a question or problem occurs during the rental process. We are working on how-to and product videos explaining our the most relevant details about our services. Our customers are strongly involved in the development process of the platform, particularly in the field of usability, easy access and convenience. Regular reviews help us to optimise our usability and understand our customers better every day.
- What prerequisites (e.g. infrastructure, trained personnel, etc.) do your clients need to bring?
Our clients do not need to bring any prerequisites when it comes to using our services. The goal of the platform is it to make the access for all participants as easy, intuitive and convenient as possible. We want to keep the need of any technical, infrastructural or other prerequisites as low as possible and provide support whenever it is needed.
When connecting larger partners through an API with the klickrent system, clients do need to have certain technical know-how. But even in these cases they are supported and guided by our technical integration team.
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