APRO checks in with dealers on how they’re handling key business challenges – particularly post-pandemic
The COVID-19 crisis has produced myriad ripple effects for businesses nationwide – ripples that even now, two years later, can feel more like riptides, unexpectedly pulling companies down and, sometimes, under.
As the heartbeat of the industry, APRO monitors and reports trends and innovations in rent-to-own. Here’s how some successful rental dealers are finding solutions for four key problems – supply-chain and inventory issues, hiring and staffing troubles, the employee burnout many are encountering, and the evergreen challenge of collections.
Warehousing Inventory
As supply-chain insecurity has become a key issue for the rent-to-own industry, many companies are warehousing product either more than ever before or for the first time.
We talked with Dan Fisher, Vice President of APRO member Majik Enterprises International Inc., dba Majik Rent-to-Own – which operates 13 locations around Pennsylvania – about how his business is using its warehouse to keep product supply more reliable during the pandemic.
APRO: Has Majik Rent-to-Own traditionally warehoused product?
Fisher: We’ve had a warehouse for about a decade, with its main purpose being just to receive special truckload or container offerings that couldn’t be shipped directly to stores.
APRO: How have Majik’s warehousing policies and processes changed?
Fisher: With the coronavirus-related supply challenges, we’ve begun ordering large quantities of products to our warehouse, in order to keep product flowing to our stores. The biggest difference is that we now ship almost everything to the warehouse, and then to stores, since we never know when something will be coming to us.
To be honest, we’ve often debated cost versus benefit with our warehouse, but during the pandemic, it has been invaluable. I feel sure our stores would have been empty on-and-off during this challenging time – but thanks to our warehouse, we’ve had significant stock available to us throughout.
APRO: Is warehousing product an activity Majik will continue to do beyond coronavirus, or do you think this solution is situation-specific?
Fisher: While we had considered eliminating our warehouse many times in the past, we will definitely maintain it moving forward. For now, we’ll continue to ship most everything through our warehouse, and once the supply chain returns to normal, we’ll probably return to our “opportunity buy” warehousing strategy.
Getting and Keeping Good Talent
In the wake of the pandemic, hiring has become one of the biggest challenges facing the rent-to-own industry. So APRO asked rental dealers, What actions or plans do you use to attract, select, and retain good talent?
“The current employment market beats all the challenges I’ve experienced as a 42-year RTO veteran,” noted Cary McPherson, Owner of RNR Tire Express of Texas LLC, stressing the severity of the issue. “We’re seeking to open our sixth location soon, and not being able to find staff might actually delay our opening. I’m definitely one of those frustrated owner-operators looking for answers.”
Luckily, many rental dealers had potential solutions to suggest – the most common of which was referral and bonus programs.
“As we continue to struggle with hiring delivery specialists, we’ve been promoting our internal referral program – a $1,000 referral bonus paid the referring employee during the first year of their referred person’s employment,” said Majik Rent-To-Own’s Dan Fisher. “We’re also developing an external referral program – paying a referral bonus to customers who refer a quality employee to us. But it’s still too new to know how it’s working.”
Dan Singh, CEO of Dial Rent To Own, offers a $1,000 hiring bonus – paid after 90 days of employment – to get good talent, while others are offering more bonuses and more bonus cash to help keep good talent.
At Showplace Inc., Owner Gary Ferriman also offers internal referral bonuses, but as one element of a bigger-picture approach.
“At Showplace, it’s our first priority to hire correct fits to the kind of business we are and the kind of business we do,” said Ferriman. “We work to build our culture, because the better our culture has become, the fewer openings and less turnover we’ve had. We believe if it’s a great place to work, then it will attract others. We augment this with a strong referral bonus of $350 at hire, plus another $150 after one year.”
Unsurprisingly, many rental dealers depend upon the Internet to identify and court potential hires – via employment websites, their own websites, or social media.
“We post our job openings on YouTube and boost the video for maximum exposure,” Singh said. “We promote employee opportunities on our website main page, and we post many of our ‘fun’ employee activities on Facebook, to show what a great time our folks have at work.”
“Our best and most cost-effective source has been the use of social media – especially Facebook,” agreed Joe Romano, Owner of R7 Lease Purchase, Inc. dba Premier Rental Purchase.
“We use ZippyApp.com,” Fisher added. “It’s helped us reduce our expenditure on Indeed, while still providing us great leads for store-level and manager-in-training candidates.”
At SKC Enterprises Inc., dba Rent One, Owner Larry Carrico recommends building a simple career website connected to your main company website.
“Presenting videos of our coworkers building, marketing, selling, and managing our products is a simple solution that explains exactly what we do,” said Carrico. “All of us have a website for our products; why not a special site just for our potential employees?
“Hiring is not rocket science,” he continued. “However, it does require a serious sense of urgency, due diligence, and high expectations. Potential hires need to know we consider them essential! How promptly and professionally we respond to their inquiries will make a difference in winning them over. Reply in whatever method they contacted you: if they called, then call them, and the same for inquiries via text or email.”
“At Dial, we approach attracting employees much the same way we approach attracting customers,” Singh concludes. “A portion of our advertising budget is put aside to promote our company to prospective employees. Our bottom line is: Spend as much energy attracting employees as attracting customers – because there cannot be one without the other.”
Protecting Against and Coping With Burnout
Supply-chain and inventory issues paired with hiring and staffing troubles has many rental dealers facing extreme employee burnout as a consequence. So APRO asked rental dealers, What do you watch for, and how do you protect against or handle burnout?
“Prior to the pandemic, I didn’t worry much about burnout,” said Clyde Steen, CEO of Texas-based Rent-Buy. “The pandemic has changed all that.”
“We had a very successful 2021, but we were short-handed in almost every store,” said Dan Fisher. “Everyone has been working like crazy to keep things going, and I can tell many of us – me included – are feeling the burnout.”
Fortunately, not all rental dealers are experiencing an uptick in worker burnout: Sandi Frye, President of White Rose Enterprises, dba Premier Rental-Purchase, said her workers aren’t showing signs of burnout; Showplace Inc. Owner Gary Ferriman said he’s seeing “no more than normal” burnout levels among his people; and Jeff Lebakken, President and CEO of Lebakkens Inc. of Wisconsin, said he has “one or two showing burnout symptoms from putting in heavy extra hours during rushes.”
Such symptoms seem to be fairly easy to identify across the board: “malaise, lack of engagement, poor results;” “attendance issues, low energy;” “attitudinal changes around the hours they work, and their ability to balance work and personal time;” “acting more adversarial than normal or making mistakes they don’t normally make;” “tiredness, moodiness, carelessness.”
“Employee demeanor is the main thing to pay attention to,” attested Steen. “Calling in sick, showing up late, lack of concentration, snapping at coworkers.”
What to do about employee burnout once it rears its exhausted head – or, more importantly, how to prevent it altogether – can be a considerable challenge. Many rental dealers say the first line against burnout is watching the clock.
“We put extreme effort into limiting an employee’s hours – for many reasons, not just burnout,” said Lebakken. “We try to make sure all employees work only a five-day workweek. When that’s not possible, then we make sure we show them how much we acknowledge and appreciate their extra effort.”
“Forty-hour workweeks prevent burnout,” concurred Frye. “We make sure we schedule properly, not causing guys to work late. With our drivers, we use Dispatch Track, to ensure they can perform all stops within the allotted timeframe without having to speed or stress; we can watch them as they go, and if we see them falling behind, we tag other guys to jump in and help.”
“I make sure my managers get their day off,” added Steen. “No more working Wednesdays when credit is high.” Another popular defense against burnout is creating an enjoyable workplace environment, with plenty of opportunities for engagement, and rife with recognition and encouragement.
“I schedule something for our workers to look forward to,” said John Manzari, President of APRO member WoodyKat Inc., dba Premier Rental-Purchase, “like a golf outing or a trip somewhere in the future.”
“We try to always have a goal in front of us – small contests, large goals,” said Fisher. “We also regularly hold company events to encourage engagement, and we survey employees and respond to their concerns – to let them know we hear them, feel their pain, and are here to help.”
“Make the workplace exciting,” concluded Steen. “Walk in and high-five your employees, encourage them to be all they can be. At Rent-Buy, we have a set of fundamentals. When the fundamentals are followed, this business thrives. And when you have a store that is thriving, you have employees who enjoy showing up for work.”
Our bottom line is: Spend as much energy attracting employees as attracting customers – because there cannot be one without the other.
Dan Singh
Strengthening Collections
Collections is a critical component in any RTO business, yet consistently ranks high among rent-to-own’s most challenging tasks. It’s a delicate balance between being compassionate and being compelling when you’re dealing with customers who are struggling financially (or want to seem so).
We talked with Lebakkens Rent to Own’s Jeff Lebakken – who operates 11 locations around America’s Dairyland – about his company’s successful collection efforts, the methods they use, the training they provide, and the qualities that are most crucial in a crack collections professional.
APRO: Who at Lebakkens Rent to Own excels at collections, and what methods do they use?
Lebakken: At Lebakkens, we have several store managers and regional managers who are terrific with collections. Their methods are actually detailed company policies and procedures, which we’re continuously discussing and perfecting. The better that folks follow these policies and procedures, the better that their collection efforts succeed. Almost always, when someone’s results begin to dip, it’s because they’ve strayed or created their own ideas about how collections should be done.
APRO: Tell us more about your collection policies and procedures?
Lebakken: Sure. At Lebakkens, our collections team members keep extremely detailed customer notes – not just the amount and date a payment will be made, but why that amount and why the payment is late. It helps us hold customers accountable to the amount agreed to, and determine credibility of future excuses for late payment.
We also, when necessary, confirm a “pick-up if no payment” date with customers. We get them to schedule, in advance, a time period when we will be there to pick up the property if they don’t make their payment as agreed.
Additionally, we always make sure the customer understands what our policies and procedures are going forward, and why we must adhere to them.
APRO: Does Lebakkens conduct collections training with new employees?
Lebakken: Yes, we have very specific training that new employees go through to learn our collection policies and procedures. During their onboarding, we typically send new employees to train in the field with one of our best collections specialists, so new hires can see up-close and personal how a successful collections team accomplishes their work.
This training process also helps us make sure all stores are practicing proper collection policies and procedures; when a new employee begins working, they see whether their store is doing anything differently than the store they trained at, and if so, then we can address it.
APRO: What qualities do you feel make for an excellent collections professional?
Lebakken: According to one of our best collections specialists, Kim Toney, consistency is key. Kim says collections team members must first and foremost be knowledgeable and well-versed about our collection policies, and must be able to:
• balance their approach between sternness and empathy;
• assert their expectations with the customer; and
• handle arduous conversations and decompress stressful situations.
