Legend: Ken Butler on RTO's triumphs and tribulations

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Hello and welcome to the RTO Show podcast, my name is
Pete Chow and you guys know me,but you might not know my
legend.
Here we're going to do a brandnew legend series and this is
the start.
We couldn't think of anybodyelse to start with better than
Ken Butler.
Now Ken Butler is a legend inthe business.
Been there 39, 40 years, kenhas it been.

Speaker 2 (00:29):
Well, 40 years at Aaron's and now another nine
years, eight years, with buddies.

Speaker 1 (00:34):
So two and a half times what I've been in the
business, and we wanted to bringthis to you because we know
that there's so many things thatyou want to know about the RTO
industry.
This is just about where itstarted and really looking at
making this a series, but wecouldn't think of a better
person to start with.
So we're actually, aftermeeting the minds, we're here in
Atlanta at Vox, so Vox Populihas sponsored the show.

(00:57):
We are here in their officeshaving the best startup of the
Legends series.
Ken, how are you doing today?

Speaker 2 (01:05):
I'm doing great.
We have the buddy stores, butmore importantly to me is family
.
I've been married for 47 yearslonger than I was with even
Aaron's.
I have 14 grandkids and threechildren, and they are keeping
me busy.
They are all participating insports sports and I can't be

(01:27):
happier with my time.
That's awesome.
Family is really important andwe always stress that when
you're in the industry, becauseit's a hard job, it's a lot of
hours and you can't lose sightof that one fact.

Speaker 1 (01:39):
Well, I can tell you right now.
So, getting into this industry,my first five years probably
the hardest thing I've ever done.
It was like open to close, sixdays a week.
It was just go, go, go, go go.
But after a while you're right,you learn how to deal with that
, you learn how to make thiswork for you the right way.
And you've got to have thatwork-life balance because after
a while your batteries run out.

Speaker 2 (01:59):
Right?
Well, the key is timemanagement and you know I used
to do a lot of town hallmeetings in the days with Aaron
and I always preach timemanagement.
I am a time management freakand so I mean I'll tell you when
I go get a cup of coffee, I putthe cream in first for the
coffee and so I don't have tostir.

(02:20):
So I figure I save 10 seconds aday.
If I have two cups cups ofcoffee, that's 20 seconds.
Move that through a lifetimeand I'm gonna live 10 years
longer than you.
But time management is socritical and, uh, there's a
tendency to for managers to be abouncing ball when they get
inside these stores, when, likea pinball machine and they got

(02:42):
moved one place to the next andso you got to have a plan.
You got next and so you've gotto have a plan.
You've got to come in themorning, you've got to get stuff
done, gsd and the more you canget done early, the more you're
going to be sales-orientedthroughout the entire day.
So I like clearing.
I like, even in my personal life, if I've got errands to run,

(03:03):
get them done early, get themdone, get them off your list,
check the thing off.
You can make checklists.
You may have a hundred thingsthat need to be done, but you
have to weigh what's importantand what's not.
Oh, absolutely.
But you've got to get them doneand not sit around and
procrastinate and maybe keepputting off and putting off.
And I call that, in an officeenvironment, a get around to it

(03:25):
later basket.
There's a basket to stack thistime.
That's the stuff you get aroundto it later.
Well, guess what?
It never.
You never get it done andyou've got to be on top of your
game in this industry.
You've got to, you've got to.
You've got to work hard, butyou've got to work smart.

Speaker 1 (03:40):
Well, absolutely, and that's part.
That's part of everything thatwe were kind of trying to teach
a lot of the managers in theselast few years is that when you
work, you're going to alwayswork the same amount of hours,
if not more.
If you're not careful, you putyour 60 or 70, whatever it is

(04:11):
thing over and over and overagain.
That is huge and it makes sucha big difference.
Now, 39 years in the errandsindustry, 39 in the rental home
industry at least under errandsand then you did.
How did that work out?
So, after you retired as theCEO and you know, was it at 2013
?

Speaker 2 (04:28):
It was 2013.

Speaker 1 (04:29):
Yeah, so what did you do since then?
Because you said 39 years, andthen plus what have you been up
to?

Speaker 2 (04:34):
Well, I didn't retire .
I left Aarons, so that's adifferent story altogether, and
there were particular reasonswhy I did.
But I couldn't get back in theindustry right away.
I love the industry, but I lovebusiness too, and so when I got
in the industry, it was so goodbecause you were able to get

(04:56):
experience in a lot of differentareas that you could take a
career and go into other places.
My wife owns two hair salons andI'm not cutting no hair.
We own a couple gift stores andit's tiny little things that
women like, and I get nervouseven when I go in those stores.
So I wanted to do somethingagain in the family.

(05:16):
As my two sons raced and theircareers were kind of winding
down, mine winded down too.
So we decided to get into thegolf cart business that we still
have today and we have twostores.
I'm not looking to build a hugething out of it, but I want it
to perform really well, and sowe have done well.

(05:37):
The first year the little storewe bought, we tripled the
revenue just on basic things Ihad learned from the industry.
You know, the first thing youlearn is if you don't have it,
you can't sell it.
You know you can't rent it, soyou've got to have product,
which we brought the product in.
You better learn a little bitof something about the product
that you're selling.
Right, and we've done very,very well and have two stores.

(05:59):
My one son runs a kind of asatellite location that does
strictly sales and then we havea main location that my other
son runs the service department,and I'm the old Walmart greeter
.
I'm just a doofus out front.
I am not mechanically inclined.
People ask me technicalquestions and I go.
You need to talk to my sons.

(06:20):
It fits them because they aremechanically inclined and we've
got a great team that's beenthere a long time and we're
having a lot of fun.
Now, after my non-compete was up, I had a lot of people that had
left errands after I left andthey were calling me all the
time and I tried to keep themthere.

(06:40):
I said you know, let me go back.
You've got to take care of yourfamily.
Absolutely.
Just because I'm gone don'tmean anything.
Your job in the field is stillthe same as it always was and
control what you can control.
Don't worry about things youcan't control.
Who cares about the politics?
And I think so much.
Even in society today, we worryabout the media and all that,

(07:03):
but you know what that?
In society today, we worryabout the media and all that,
but you know what?
That doesn't matter.
Take care of the things you cantake care of in life.
So I would tell them that.
But nonetheless, a lot of themhad left and they would call me
and say let's do something,let's do something.
So, lo and behold, I said ify'all got a little money to
invest, I'll put some money intoit, because I wanted them to

(07:24):
have some equity in the venture.
And we got big quick.
We bought I guess it was seven,eight, nine stores out of the
gate down in Florida, southGeorgia.
And then we bought anotherlittle group out of Mississippi
you probably didn't know this,no, I didn't.
And then HomeSmart came up forsale.

(07:49):
Homesmart was a weekly RTOconcept that I started with
Aaron's Right, because you reacha point in growth that you've
got to look for the next horseto ride, so to speak.
And we started HomeSmart got itup to about 80 stores.
The new regime at Aarons didn'tunderstand it and they'd just
as soon get rid of it.

(08:09):
So Brian and buddies acquiredthat company, of which about 58
of the stores all of a suddengot dumped in our lap.
Well, we didn't really have themoney to buy 58 stores it, it.
It was a good vehicle to helppeople from errands and, but a

(08:31):
bad vehicle when you don't have.
You got it for nothing,basically, and now you're in
debt for all these stores.
So we eventually sold them off.
I I wasn't looking intobuilding an empire again with
buddies and it was suddenly kindof going that way and and I
just wanted to simplify life,and so we ended up settling on
10 buddy stores in the atlantaarea and we sold off the texas

(08:56):
stores, which you probably havesome of them now in florida.
We were in north carolina andvirginia and I'm sure people out
there are running those storesbut, most importantly, a lot of
the people that had come onboard with us are still in those
positions of running thosestores and making a lot of money
.
So it worked out really goodfor everybody and I'm very happy

(09:16):
and content to have our 10Little Buddy stores who, by the
way, we were just the company ofthe year.

Speaker 1 (09:24):
Yes, yes, I did see that.
Well, you know, the crazy thingis so, even though there was a
leaving at 39 years, you reallyhaven't been that disconnected
from it at all.

Speaker 2 (09:34):
Well, I'm not working it day to day anymore.
My life I got good people.
Paul DeWise runs our accounting.
He's a CFO.
Izzy Ismael is running theAtlantis stores.
He's been with me for a very,very long time and I know
they're in good hands.
Our management team that runsthe stores have a ton of

(09:57):
experience.
So I'm just a problem solver.
You know if something comes up.

Speaker 1 (10:02):
Well, they're pulling from the experience that you've
had for so many years, right?
So one of the things that Ialways have to ask is, coming
through these many years, seeingthe many decades of rent to own
, because you came in at a timewhen it was still infantile,
right, we were on a manualsystem Correct right.

Speaker 2 (10:21):
We had ledger cards of our inventory.
We had to check in like an oldschool library.

Speaker 1 (10:27):
I remember I was literally doing a collections
course before and I started at2000.
And so I was telling him aboutcards and I said you know, I got
to tell you a funny story,because the reason why we call
it cards is because in thebeginning it was a card.
It was somebody who wasactually literally it was an
account that was passed to, thatmade it on a card and we had to
clear those cards.
And I said you're going to seeit as agreements, it's going to

(10:49):
be AOR and you probably don'tunderstand what a card is.

Speaker 2 (10:53):
The good part of being in the card system was we
had a metal tray and the folksthat hadn't paid, which we
called non-renewed.
Some people may call itdelinquent, but you could see
what you had to work, yes, andyou really like the visual of
that tray getting down to littleor nothing, and so that was our

(11:14):
mission, which is to wipe thattray.

Speaker 1 (11:18):
And we worked it every day because we had to.
It was a visual representationof what was your job, absolutely
.

Speaker 2 (11:23):
We had little notes on the back and we put it in our
own manuscript and we couldunderstand the writing.
Like LM left message, tt, talkto customer, ttc, things like
that.
But you worked it every day andyou followed up.
If you had a promise to payThursday, you'd go through your
cards and bingo.
It was Friday and they didn'tcome in.
You're back on the phone andthen you're back on the.

Speaker 1 (11:44):
so I was talking to the guys, I was letting them
know that's where the cards camefrom.
But you start in the 80s,correct, and you work your way
up from a very normal positionto getting to the COO, correct.

Speaker 2 (11:59):
The COO of Aaron's.
Actually, I started in Januaryof 1974.
Oh, so it was in 74.
Okay, I started Aaron's whatwas known then as Aaron's Rent
to Own in 1987.
That's what I understood.
I was with our legacy companycalled Aaron Rents in 74, which
it was a rent-to-rent deal andyou had a balloon payment that

(12:22):
nobody ever paid, so we'd havepeople paying forever.
But the prices were very, verylow, like our average ticket for
a one-bedroom apartment waslike $60 a month, so unheard of
with our pricing today.
But they were just using theproduct.
It would come back, wouldrefurbish it.
If it was too bad to refurbish,we had a sales division that

(12:45):
would send it to like awarehouse concept store called
Aaron Sales.
Different thing altogethermainly furniture, no appliances,
had little portable clickable,no remote control TVs that were
$25 a month.

Speaker 1 (13:00):
You know, the first time that I had heard your name
it was probably about the end of2000.
I had started in January of2000.
So towards the end of the year2000, I was working at Runner's
Choice and so it was an ErnieTalley business and it was shirt
and tie.
We came in, we delivered, wesold, we delivered, we serviced,

(13:22):
in shirt and tie.
It was a whole differentballgame than I had ever been
used to.
I worked at a bank and one ofthe managers would come in and
do the deposit every day and aspart of his normal routine he
got to know me, we got to knoweach other, just simple banter.
And he pitched me to hire meand I was like I have no idea
what rent to own is.
I have no idea what you'retalking about.

(13:43):
He's like come on down.
I mean, what's the worst thatcan happen?
Right, you come on down.
You don't like it, we call itday.
You got a job and so I did andnever looked back.
I've been a rent to own sinceand you got addicted.
I did, I did.
It was completely different thananything that I had known.
There was nothing like it thatI had even heard of, because

(14:03):
there were so many facets of it.
There was the office side of itwhere you had to deal with the
files, you had to deal with thecalls, you had to do collections
, but then there was themerchandising side right.
So we had stuff that come backand we had to clean it, we had
to put it on the sale all theway to ownership.

(14:25):
Well, now I've got to deliver.
I've got to learn how todeliver.
I've got to learn how to wrap.
I've got to learn how to set upin their home.
I've got to learn how to doservices.
I mean, I was servicing washerand dryers.
Before that I had no idea thatthere was a belt that went
around the drum of a dryer.
I had no idea no-transcript.

(15:08):
So we were kind of brought up ina different time of account
management and so I got soinvested in it.
It was completely different.
And then one day Michael Drawncame down.
He was the regional manager, hehad the Southeast Division and
Michael Jordan came down withour DM at the time and we just
were talking and he hadmentioned your name and you know

(15:32):
it was a big thing because wehad just did the.
Maybe I got the year wrongbecause at that time we were
just about to take over oracquire the whole.
You know the Rent-A-Centerthing, the Rent-A-Center deal,
and it was around that time Ibelieve you know he's telling me
about what's going on and allthat and we're like, yeah, it's
going to change what we do, ourstore count is going to change

(15:54):
and we're going to be in a wholedifferent league.
I think at that time we werealmost 800, 900 stores going to
a few thousand stores and youknow other competitors that were
getting to that point and a lotof rental-owned dealers.
I didn't even know who theywere.
Now, when I go to Meeting ofthe Minds now I go to APRO now I
see all the small dealers fromall the states that I had no
idea about.
There was only two competitorsthat I knew of, and that was

(16:14):
Rack and that was Aarons.
That was it, and everything elsekind of came second, and not
that it wasn't important, wejust didn't have those dealers
out there.
So I was in, I was in HighlandsCounty in Florida and that was
what we knew, and it was like weonly have one, one company to
beat.
We need to be number one and weneed to make sure that we keep

(16:37):
errands out of the area.
We've got to outsell it, we'vegot to outperform and, uh, and
since then, growing up in thebusiness and kind of meeting
everybody and knowing everybody,I've actually seen a couple of
your videos or videos thatyou've been in the inception of
the rental order and how thatkind of came about.
But that's a story actually Iwanted to hear firsthand,
because the rental order wassomething that I think it seemed
a little bit new and it was howyou kind of created it, the way

(17:01):
you did.

Speaker 2 (17:06):
Well, I'm not sure what you mean by order.
So, like the rental application, oh, the rental app, yeah, yeah
, we did call it an order forthem, but a lot of.
When we got into the industry,uh, rena center was already
there.
So aaron rents was limited onhow many stores they could
really do, because they reallycatered to winter visitors in
Florida, people with temporaryhousing.
They weren't after therent-to-own customer.

(17:29):
It was probably a little bithigher rate of customer than the
typical rent-to-own.
And so when I got into it,charlie stopped me in the hall
one day and told me he wantedand I had tried to put a
rent-to-own program in AaronRents and our accountants were
going you can't do that.
I heard more things you can'tdo and I'm a can-do person, and

(17:51):
so Charlie asked me to start arent tone company and I said,
look, I'll do it, but youraccountants aren't going to
support it, to give me thesupport we need, because I
already know that.
And he said, no, you can setyour own accounting completely,
put a wall up, and it's going tobe a completely separate entity
from Aaron Rents.

(18:11):
And that was like music to myears.
So my first mission gettinginto it I hate to say this.
I went to Rent-A-Center.
I knew a person, regionalmanager I won't say his name,
name, but he's not there anymoreand I spent two weeks with him
in Kansas visiting stores,actually working Renner Center
stores.

(18:32):
I interviewed for jobs atRenner Center.
I just wanted to hear what theyhad to say and, man, that was
like a new fish in water or likea duck taken to water.
I had pages and pages of notesand I remember going back to
Charlie and said you're notgoing to believe this.
So what I did discover, evenwith the smaller operators as

(18:56):
well as the big operator at thattime was running a center I
think they had 600 stores waseverybody was doing it the same.
It was the same same multiples.
You were marketing a productthree or four times divided by
18 or 78 weeks.
That's your price and that'sthe formula.
And so it was just strange hownobody was setting themselves

(19:18):
apart.
I was from a collection side ofcollecting monthly.
The rent zone industry wascollecting weekly.
Yes, and so I went.
Now those same customers paytheir apartment rent by the
month.
They get a utility bill by themonth, but we don't think they

(19:39):
can pay a TV by the month.
I mean, come on, guys.
And so if you take a lot ofthat effort of having to collect
4.3 times every single month,every single Monday, it's like
deja vu over and over and comeup with standardized due dates.
Wouldn't that make it easierfor the customer?
And wouldn't that make iteasier less stress on our

(20:00):
department?
And it did.
And I think it brought a littlebit better customer to the
industry because, number one, wecould offer a better price if
you paid by the month.

Speaker 1 (20:10):
Well, it was one of those things, because back then
it was the weekly by weeklymodel, that was it.
I mean, we had some monthlycustomers but you but but
Aaron's kind of came along andsaid we're going to do what
we're doing, but in a way thatwill set us apart.
And it's funny how just thatalone really kind of set a
difference between the normal,typical rental home that I grew

(20:31):
up on and something that Aaron'swas doing, because we knew it
as it's a completely monthlymodel.

Speaker 2 (20:37):
We did some neat things.
I don't know if you ever heardthe term do the math.

Speaker 1 (20:42):
Yes.

Speaker 2 (20:44):
But we created that term before it went viral.
I can promise you was that thedog with that was a lucky dog.
That's another whole story,that's okay but the do the math
started back in the early 90sbecause we wanted to do the math
on rent-a-center.
Whoever the other competitorwas right and we would actually
post their transaction costsopposed to ours.

(21:07):
Now, of course, all theirtransactions back in that day
were mostly 78 weeks.
Mostly People weren't doing 12months, they weren't doing 24
months.
The other mousetrap wedeveloped was you can own it in
12 months instead of 18.
Okay, so our pricing could bevery comparable by the month
compared to your weekly rate,but you could own it much sooner

(21:28):
and so you ended up with a lotmore loyalty from your customer
base.
And now people are doing 36months, which I think is insane
because the odds of thatconsumer getting to ownership
are slimming down.
I had one of my technicians inthe golf cart industry is moving
out.
He's an older guy but he'sfinally independent enough to

(21:49):
move out.
Wanted to go to one of ourstores.
He says, ken, that bedroom setis going to cost me $7,000.
And I said what's the deal?
He says 30 months.
I said you can pay it off in120 days.
That's what you need to do.

Speaker 1 (22:05):
There's always the conundrum, because I agree with
you when I see something at 30,that's pretty high, right?
So the idea is you start at 78,a package will go to 24,
depending on what you put in it,and you would like to get a
little bit of that rate breakwhen you go into that 30 months.
It's always what led to that,and I know right now, and

(22:25):
especially in the last couple ofyears, pricing has gone up
after you get out of COVID.
A lot of things have changedthe way we bring it in has
changed, where it's manufacturedhas changed, the shipping
amount.
Costs had gone through the roof, and so I think a lot of
dealers were how are we going toget back to a price point that
we believe our consumer canafford without taking it
completely out of the bank,right?

Speaker 2 (22:46):
We leave it at $78.
That's a false price point inthe long game.

Speaker 1 (22:48):
Yes.

Speaker 2 (22:49):
Because what happens when we were 12 months at
Aaron's, the average contract oragreement is what?
Three and a half months, maybefour months?
It hasn't changed.

Speaker 1 (23:00):
Okay.
In all these years, I thinkit's still three and a half to
four months, depending on whenyou do that guide.

Speaker 2 (23:06):
So if I'm discounting you to a 30-month deal, even a
24-month deal, and you keep itthree and a half months, I'm
getting much less money on thatproduct than the 12-month deal
that I got three and a half,four months out of.
So I had, although lower prices, I'm getting more income and
that's what people didn'trealize With less effort because

(23:28):
I'm collecting by the month.
Today's market is phenomenal.
It wasn't there when I was hereand I like this.
You can get the auto pay and Iget it that a lot of the auto
pays don't come through.
But, it's about an 80% hit ratethat they do come through.
That's phenomenal.
And you know, to me the art ofthe game is in your ability to

(23:50):
collect.
So you're collecting hard,you're collecting light.
No, you know, if you'redictating down to a customer
when you talk to them, you'reprobably not going to get the
response.
When you respect the customer,their person, their human being,
absolutely All our customersare in distress.
The whole market today, whetherit be rent-owned customers or

(24:15):
people with higher income, aredistressed with the inflation
rate.
So they're not bad people, butyou have to get on their level.
You mentioned the tie thing.
I grew up in the tie thing.
I grew up in the tie deal.
I hate wearing ties.
I don't think I'll ever wear atie again.
I got 50 in my closet.
I don't even know why I keepthem, but one of my VPs I think

(24:37):
it was Dave Degnan back in thetime we went to a 7-Eleven store
and got a soda pop or whateverwhile we were visiting stores
and he said what I have realized.
And when he said this to me, hewas right.
People talk to you differentlyin a tie versus a casual shirt
Professional but casual shirtand I said you're right.

(24:58):
I said so we're poisoning,positioning ourselves as big
brother to a consumer who neverwears ties, right.
So we went to an apparel systemand I think everybody in the
industry is owning it.

Speaker 1 (25:13):
They did I actually have not seen it anywhere since.

Speaker 2 (25:17):
I think we may have changed all that.

Speaker 1 (25:19):
That was one of the things.
When coming into thisconversation, coming into the
meeting, I was thinking you know, ken was a part of so many
things that affected theindustry, and that's part of why
I wanted to do the Legendsthing, because it's not just
somebody who's been there, it'ssomebody who's worked for 30
years.
Although we appreciate them,what did you do for the industry
at that point in time?
And, you know, coming out withthese different things that made

(25:40):
such waves in the industry, Iremember there was no way that
we were going to wear anythingless than a shirt and tie.
The only thing that theyallowed us to get away with was
maybe you could have the cut-offsleeve shirt when it was hot in
the summertime, but you weregoing to wear your slacks and
you were going to wear yourshirt and that was it.
And then I remember the modelgoing to a polo and I was like,
really, is that how we're goingto do that?

Speaker 2 (26:02):
It's a room to go, is it?
So why not, right?
But?

Speaker 1 (26:05):
now I have the polo all the time, even as I wear my
slacks, and I still do my thing,but it's a polo business now,
and so all these changes cameabout with a lot of foresight of
what you've done in thebusiness.

Speaker 2 (26:17):
Right, we even had a.
I see you've got a red onFriday.
I see you've got a red onFriday.
That goes back to something wedid years ago after 9-1-1 is we
had a red shirt Friday to honorour military veterans.
Yes, and so it's culture.
Everybody in our stores worered on Friday.
Then it went to white shirtWednesday.

(26:38):
But it's the most importantthing in building any company.
I don't care if it'srent-to-own we didn't call it
rent-to-own, by the way.
I can give you that story laterbut it's creating a culture,
and a culture is something youcan't touch and you can't
replicate.
So our culture, we did so manythings.
We threw out the book and didit different.

(26:59):
Our language was different.
If you saw one of ourcollection reports, a typical
Rentone guy would say they areout of control.
They used to maybe get ourreports because we had high
numbers, but we increased thenumber, counted against that
store about how deep thenon-renewal was.

(27:20):
Makes sense, doesn't it?
Over 30 is a lot more seriousthan somebody.
That's five days, not See, Idon't say past due, I say
non-renewed.
We created a culture ofterminology.
We actually did a whole meetingthat, I think, kind of ignited
our culture and it was called it.
And what is it, you know?

(27:42):
So you got me curious.
What is it?
Well, that's a good question.
So you go to businesses I don'tcare what kind, whether it be a
restaurant or a furniture storeor a golf cart store If people
ask you, well, how was Aaron's,how was your visit?
What do you want them to say inthe market?
Man, they got it, they got it.
Or they could go to acompetitor and say, man, they

(28:06):
ain't got it, right right.
Well, if it is pretty big, youbetter figure out what it is.
And so it was defining what Ourprogram which makes us unique in
the marketplace.
So, with that cleanliness ofthe store, no-holes policy,
dumpster the trucks being clean,lots of little things.

(28:29):
And people always came up to usand said how do you manage
1,500, 2,000 stores?
And it was built on a strong,very strong culture of what
there were non-negotiables.
You didn't have a choice.
Well, right, right, there werenon-negotiables.
That was expected, yeah.
And so when you had that, itmade our people, it helped

(28:52):
managers manage the store.
I mean, we go back and we gaveour managers what we call the
big five and we even have donethat at Buddy's.

Speaker 1 (29:03):
But it's the Super 6 now.
We've added to it, we've madeit better.

Speaker 2 (29:05):
And we've got the Ten Commandments.
So the Ten Commandments arenon-negotiable.
The big five was telling youthe most important things to do.
You don't have to be the firstup on every customer.
You're the manager of the store.
You've got a sales managerthat's supposed to do that.
You should be very in tune withwhat's going on in your store,
correct?
But you're going to meet everycustomer at some point in time

(29:29):
and this is a whole transaction,from the time a customer walks
in the door, how they're greeted.
Questions you ask.
And we're not trying createrobots, we're.
We're helping people learn howto sell.
Selling is giving enoughinformation that the customer
can make an intelligent decision.
You don't have to be thegreatest salesperson, you have

(29:49):
to be people, friendly, shakehands.
I love shaking hands.
My name is ken and you're pete,and then you use that name
throughout the conversation.
We would role play it over andover and over.
Then what happens?
When Pete wants to lease younotice, I didn't say rent to own
, Correct when he wants to leasethat sofa over here.

(30:10):
Well, guess what?
It's time to meet the manager.
And this happens so many timesthat I used to go into
competitors and I'd see themclosing a deal on the frigging
counter Personal information.
So every one of our stores wecreated a closing room which we
have at Buddy's.

Speaker 1 (30:28):
I think it's still today, I believe it's still like
that today.

Speaker 2 (30:31):
Yeah, yeah, maybe the industry's adopted that, I
don't know, but it's time tomeet the manager and the
manager's got critical points tomake sure the customer
understands.
Now, today, what's so importantand we do this at Buddy's is if
the customer signs up for autopay, we give them a discount on
the term of the deal on the backend, so we reward them.

(30:54):
If they sign up for a monthlydeal, we give them a discount
versus paying by the week.
So we didn't have those toolsback in the day.

Speaker 1 (31:07):
There was no ACH payments and auto payments.

Speaker 2 (31:08):
So this is a great time to make sure you understand
how that works.
If you choose not to do it,that's okay.
Then you're telling me we'regoing to pay on time.
Now, if you can't pay on timebecause I want you to own the
product I mean that's our endgoal To ownership, correct.
So we're here to help you everyway possible to get there.
But if we find out that youcan't pay it on time, you're

(31:30):
paying five days late.
I don't want your reinstatementfees.
I don't.

Speaker 1 (31:44):
Now a lot of people may say I really need those to
make a profit.
But if you had everybody payingon time, maybe your model is a
little bit different.
Well, also, if you don't havethat many cards or that many
accounts that are going to apoint where they're not renewed
on time, you have that to domore sales.
You can take care of yourcustomers better and instead of
incurring it on the fee end, youwould incur it actually on the
rental register end by sellingthe product, but it's a mental
state too.

Speaker 2 (32:02):
If you're not under control on the back end, you're
really leery of playing offenseon the front end.
So, playing a good defense,defense does win championships,
yes, it does win championships,but it helps your mindset.
Like you said, to play offenseup front but it's getting the.
Like you said, to play offenseup front but it's getting the
customers on a smart start andthe manager of the stores in

(32:26):
that big five is supposed tocall that customer if they're
one day late.
Because me and you had thatagreement.
Right, you were going to pay meon time.
And now here we go, first time.
You sure you don't need to putyou on that auto pay program.

Speaker 1 (32:37):
Well, that I mean that it needs you know.
When you say it up front, youget your expectations out of the
way.
This is what you can expect outof me Nothing to be embarrassed
about.
Absolutely.
I mean, every time you make thephone call to the store, we're
going to answer it during openhours.
If you have a service problem,you call the store.
We're going to take care ofthat.
On the flip side of that is weneed your payments, of this

(32:59):
amount of payments, to take careof this.
If you want to do it in thistimeframe, then you can, and if
not, there are things that comealong with that and we've set
those expectations up early andthe managers or the GMs or
whoever you want to call.

Speaker 2 (33:09):
It's okay to have that conversation.

Speaker 1 (33:11):
It shouldn't hurt anybody's feelings.

Speaker 2 (33:13):
Look, I got an American Express card.
I don't shop in stores anymore.
If I need something, I goGoogle it and boom, boom, boom,
I buy it and it's gone.
But guess what?
I can't buy a $10 item unless Ipresent a credit card.
So we're talking about aconsumer that I'm getting ready
to give you $1,500 worth ofmerchandise and I don't know

(33:34):
nothing about you.
Why shouldn't I ask for a debit?
They all have debit cards, theyget paid by debit cards and
then.
So why shouldn't I set thatexpectation Absolutely?
You know, I don't think it's abig deal, and so with this
particular week you're having aproblem?
Call me, I'll work with you.
My goal is to get you toownership and not put you in a

(33:55):
bad situation.
So your wife lost her job,whatnot?
You don't have the money in theaccount.
Call me, let's work somethingout, absolutely, and I won't
pull this payment.
We're going to come in andwe're going to figure a way out
to make you happy and to make mehappy.
Let me ask you a question 2013,.

Speaker 1 (34:12):
Whatever reason, you leave Aaron's and you start
doing your own thing, but backthen there was over 2,000
errands locations.
We hadn't already opened our2,000 store.
Now, fast forward 10 yearsafter that.
It was close to about 1,300locations.
I think it was 1,293, orwhatever the case is, in
December December of 2023, Ithink is what it was there are

(34:37):
rent-a-centers as well, becauseI broke my teeth on starting at
the renter's choice and thengoing to rent-a-center.
So my first seven years was atRAC and the same thing.
They've broken a certain amountof set.
2013 to 2015 was like the peaktimes and then now go forward 10
years.
We've backed off.
What do you think has causedthat decline in the amount of

(34:58):
stores that we had out therethat were not as large as we
used to be in the industry forthese larger dealers?
Now some of the smaller dealershave grown.
So I don't want to say that,but you know, going from I
remember there was a.
There was a peak time wherelike rack was like we had opened
these stores and then you knowwe have some in Puerto Rico and
out of state, and then Aaron'swas opening them in Canada and
the 48 states underneath and itwas just like this game and then

(35:20):
all of a sudden we had aturnaround and we started
declining in stores.
What do you think changed astore count value to?

Speaker 2 (35:29):
a lesser amount Management, and I don't want to
say me, but I was an instrumentof that.
I can't speak for Run of theCenter, but I think at Aarons we
lost culture and when you loseculture you lost everything.
So what was important thenbecame not important.

(35:50):
We couldn't lose.
We were built not to lose.
We went through recessions.
It was like we did quarterlyconference calls.
They were so easy because wewere winning and Charlie had
left the company and he put RonAllen in the job.

(36:13):
There's some reasons behind allthat.
But Ron Allen, if you look upand I hate to say something bad
about somebody, but if you'relistening screw you, ron Allen,
because you screwed up a gooddeal.
They have an award in theairline industry.
He was a former CEO at DeltaAirlines, the worst airline
executive of the year.
He was the first recipient andthey continue to make that award

(36:38):
and it's called the Ron AllenAward.
Oh, no, recipient.
And they continue to make thataward and it's called the ron
allen award.
Oh no.
Uh, ron could have come in,asked us a little bit about the
business.
He knew nothing about it, neverasked me one time how how
things going.
He decided he was better inmarketing than I was, and so he

(36:58):
took that department over and Icould see then this deal ain't
going to last and it wasn't myplace and I told my wife.
I said, look, I'm miserablewhen I see his car in that drive
when I come in it's justmeeting after meeting, after

(37:18):
meeting.
Loved to have meetings.
I wanted to show he's the boss,so I tried to travel as much as
I could just to get away fromhere.
You know it's about the stores,you dummy.
You know it's about thefrigging stores.
And so there was a disregard tothe franchise system.
At that time the best franchiseguy I have ever known the only

(37:41):
one I have had was Todd Evans.
He created our franchiseprogram.
He kind of disregarded thefranchise.
Our franchise program waskilling it.
Those guys gave me so muchinput as we developed our
program and understand it wasn'tme sitting in a tower thinking
of ideas.
I got everything from the fieldand, more importantly,

(38:04):
franchisees who have their moneyon the line, know things and
they're not afraid to speak out.
So we created an AMT, aaron'sManagement Team, and we would
meet with top franchisees.
We'd rotate them because wewanted to hear from different
people and they could come inthe room they're not going to
hurt my feelings at all and ifthey pointed out something that

(38:25):
needed to be fixed, that wasgreat.
That was the best thing thatcould have happened out of it.
Now, some of them had somecrazy ideas and maybe some ideas
that we had previously done,but we quit treating franchisees
as partners and consequently Idon't know how many franchise
stores they have today, but it'smore than half have gone.
Greatest business in the world,business model and that's over

(38:48):
with.
And then they decided toreinvent the wheel.
I noticed they had a race carSunday.
Bless their hearts.
But it said Aaron's Rentone.
We hadn't done that.
We weren't in the rent-to-ownbusiness.
Let me tell you my story behindwhy we went to the leasing
concept.
Think about this Our customerswe had when we started it was

(39:11):
called Aaron's Rent-to-Own.
Yes, and that big old truckwith Aaron's Rent-to-Own.
Our customers were asking usthey didn't want their neighbors
to know they were doing aRentown deal, absolutely.

Speaker 1 (39:24):
They didn't.
You know, that was one of thereasons why we started the
podcast to educate, because thathas got that negative moniker.

Speaker 2 (39:33):
Yeah, and it goes back to roots from many, many
years ago, roots from many, manyyears ago.
But there were a lot ofunethical things people have
done, behaviors in stores thathave hurt the reputation of the
industry.
Consequently, the rent-to-ownname was tarnished.
It isn't a bad name to me, butto our consumer.

(39:53):
They're a little bitembarrassed that they had to do
a rent-to-own deal.
So we ended up morphing intojust errands and that's what we
branded the hell out of.
And it said below it sellsleasing.
We don't care which one you do.
So think about this.
If you asked me what kind ofcar I drive, and I told you.
And you asked me how I'm payingfor it and I told you I'm doing

(40:15):
a rent-to-own deal, what wouldyou think about that?
It does change somewhere Versus.
I tell you, well, I'm justleasing my car.
Well, guess what?
Lots of people executives leasetheir cars.
Oh yeah, absolutely.
Leasing is socially acceptable.
Rent-to-own's not, so who careswhat you call it.
Give the customer what theywant.

(40:36):
And that's what we did.
And we branded the heck out ofthat name.
We created a fund.
We had to sell this concept.
But I wanted to create apartners program with our key
vendors.
I remember the first time wedid it.
We had a handful of storesmaybe 40, and we told them we

(40:58):
were going to be big.
I knew we could get up to atleast 100 stores.
I didn't see 2,000.
But nonetheless, we knew in theindustry if they had extra money
to bet on certain companies.
And we proved to them we weregoing to grow this thing.
We had a different mousetrap,why?
And we wanted 3% back foradvertising and with that ad,

(41:21):
you're going to be in ourmonthly flyer that we produce
$25,000 a month.
You're going to be in there,guaranteed, every single month.
We're going to put your name inthe stores.
We're going to put your name onthe trucks.
It's going to be a great deal.
So we walked away from thatfirst meeting and we got
$350,000 that we never thoughtwe'd get Free money.

(41:42):
Now we're small, that was a lotof money to us.
When I left, that fund hadgrown to $33 million.
We had every vendor wanting toparticipate and ended up with 12
, 13, 14 vendors participating.
They wanted in that ad votethat we ran 25,000 a month.
Our ads would promote theirproducts.

(42:05):
They would be on the side ofthe race car.

Speaker 1 (42:08):
Well, so we're talking about the delivery cubes
, right, that had the big signson the side.
And then also there was thatrunning banner in the stores
where they had their name inthat metallic, they got all that
.
Yeah, that stayed up there,either in the stores where they
had their name in that metallic,they got all that.
Yeah, you know that.
That stayed up there, either inthe you know, in the
electronics section or theappliance section or the bedding
section.
That ran all the way throughthat black with the metallic
sign inside of whether it saidyou know all the great, you know

(42:30):
it was like, it was likewhirlpool and and all the, all
the big brands.

Speaker 2 (42:34):
So the customer, we had all named brand products and
one.
But the whirlpools of the worldand whoever else was
participating in RCA loved it.
They absolutely loved it andthey were happy to do that.
Did it hurt our negotiatingpower?
No, let me tell you why.
We started distribution centersat the same time and I went to
the vendors and said Look, I'mnot buying six TVs that you're

(42:56):
drop shipping.
I'm buying a full tractor,trailer load and it's going to
one DC, one PO.
You're going to be paidpromptly.
I got to have better pricing.
So part of getting the customerbetter value is getting better
prices on the product.
And when we did the DCs we wereable to negotiate better

(43:23):
pricing because we did have tomarket back up to the stores to
deliver for free.
Our franchises got the benefitof that too.
They paid the same price thatwe did.
But our goal for thedistribution centers was to
break even.
It's not a profit centerCorrect, just to cover the
overhead with a little markup wehad and the discounts we could
get.
Our end user price was stillbetter than what anybody else
was getting.
But a manager could order fromthat dc every monday and have

(43:48):
whatever he wanted product mixthat week.
He knew his day was thursday.
He had to get his order in onmonday.
He didn't have to think fiveweeks out, six weeks weeks out.

Speaker 1 (43:59):
I tell you, I remember I had a store I'm not
going to say which store, but Iran a store that was directly
next to an errands and everyFriday their truck would show up
first.
I mean it was not, you couldalmost set your watch to it.
Yeah, they were clockwork.
Every single week.
They were pulling stuff off thetruck.
Every single I was like man.
That is just crazy.
They were pulling stuff off thetruck.
Every single one was like man.
That is just crazy.
It's just clockwork and they'dbe pulling stuff off the truck.

(44:21):
So, getting the DCs, thesedistribution centers, set up and
getting it in great way to getthat type of pricing when did
Woodhaven come in?
Where did that concept comefrom to really give that value
from within?

Speaker 2 (44:37):
Woodhaven existed when I came on board in 1974.
Believe it or not, we only had12 rent-to-rent stores.
But Charlie Loudermilk hadwanted to build a product that
was built for rental, that hecouldn't get at a high point
just for a retail product.
So he put some extra cushioningin, he put a lot more hardwoods

(44:59):
into the product and he did itfor his little 12 stores.
It was called McTavishIndustries.
It wasn't in Coolidge at thattime, but Woodhaven is the name
of his plantation in southGeorgia, no kidding, and the
factory was probably three milesfrom his Quail plantation.

Speaker 1 (45:19):
Just for anybody who doesn't know, woodhaven was
Aaron's own furniture company.
They built for Aaron's only.
So whatever you got out ofWoodhaven was and it might
represent or look like someother models, but the truth is
all the models were unique tothat Aaron's business and they
can order that, have it builtand come to the store.

Speaker 2 (45:40):
American made, too American made.

Speaker 1 (45:42):
Absolutely, and it was all kept within that banner,
and I mean, that was somethingelse that nobody had done.

Speaker 2 (45:47):
Well, it was a tool we already had when we got in
the industry, which was great.
The problem was long ago is theproduct being manufactured was
not very stylish.
It was very boxy and he couldput a green cover on it or a
blue cover or a pink cover,whatever he wanted to do, but it
didn't have a lot of style.
And remember that thing I can'tRight, the guy that ran it at

(46:13):
that time was a lot of I can'ts.
I can build you box products.
So we'd go to the market and Itold Charlie.
I said he's got every toolavailable.
He can add some flair.
So we would buy product.
And we told the people long termwe want to buy your product
other outside manufacturers.
This was even when I was inRent.

(46:33):
To Rent I said but if we likeit, we're going to probably send
it to our factory and we'regoing to knock it off and make
it better for rental as long asyou're happy with that concept.
But we were very transparentabout it up front.
We said this is what we'regoing to do and they agreed to
do it.
They're going to get a lot ofbusiness.
I'm going to come back to youat the next market with the next

(46:54):
hot thing you got.
So we're going to stay current,we're going to put these
products in the store, but ifthey don't move, we won't go any
further with it.

Speaker 1 (47:01):
Well, that's the great thing too, is because you
can determine what is being made.
You can determine well, my hotsellers, I can make more of that
or less of that, or if we canswitch.
You're not waiting for themarket to give you that
opportunity.
You have the opportunityyourself.

Speaker 2 (47:20):
Right opportunity yourself, right.
So we found out he could makethat product.
And then I remember Charlie,back in the day before DCs, he
wanted a manager to be able toget the product within a week.
And I remember I was at thatmeeting and the guy I'm not
going to call his name, I don'tthink he's alive anymore but he
said, well, we can't do that.
Charlie said, well, let's justsee if we can figure out a way
to do it.
Of course he did figure it out.

(47:40):
So you know, I hate people whenthey say I don't hate people.
I hate the term, you hate themindset.
We can't do it.
You can do anything you putyour dang mind to.
I mean we put people on the moonfor crying out loud.
So come on, but there's a cost,and so you've got to weigh the
cost versus the reward.

Speaker 1 (48:00):
Correct.
So how does it go?
Because I didn't know that itwas that far back.
I thought it was something, aconcept that had been created
later.

Speaker 2 (48:07):
Well we, changed the name of it to Woodhaven because
we thought it was a lot coolername than McTavish Furniture
Industries, and so we did that.
After we got into it and itbecame kind of known, we made
labels that weren't made beforeand had some descriptions of why
this product's really good anddid a lot of training on that

(48:27):
product with our people that itwas better.
It was better, it was betterbuilt.

Speaker 1 (48:30):
Yeah.
So I guess the main question Ihave is you start with this
McTavish.
It's covering 12 locations.
How many locations at the enddid it cover?
I mean, you're not just scalingerrands, you have to scale your
production company.

Speaker 2 (48:46):
We got more than one factory now, or had we had a
factory out in Phoenix?
How was?

Speaker 1 (48:50):
that scaling, though.
How did that go about?
Because I mean, you're not onlygrowing the rent or the lease
to own the rental on site, butnow you also have to understand
how to make it.

Speaker 2 (48:59):
I don't know.
It was crazy.
It's one step at a time.
I never looked.
I'm telling you it was reallyfunny.
When we first started and Iknew Rent-A-Center had 600
stores I didn't know how many wecould add, but I went to
Charlie.
I had figured out when we had12 or 13, I had 78 markets.

(49:19):
I knew we could 78 places Icould put a store.

Speaker 1 (49:22):
That's a lot.

Speaker 2 (49:26):
And so I went in and said Charlie, I know we can get
to 78 to 80 stores, that's what.
But you know, that's where mymind was.
And then, after we got intoAtlanta, we knew we had one in
the north and one in the southand one in the east and one in
the west.
Well, we need one there, and inbetween we need one there.
And next thing, you know, webuilt it one block at a time and

(49:49):
you had 40 stores in Atlantathat were successful.
You know an old college coach ofmine I wasn't a great football
player, I was very average, bythe way but when I was a
freshman year he said oh, youguys have been recruited.
You were great players in highschool, yada, yada, yada, but
that don't mean nothing.
You know, y'all can come inhere and play like this and

(50:11):
you're not going to get very far, but when you can put
everything together you're goingto be strong.
So the more stores we couldflood into a market around a
distribution center that wouldbe very, very efficient the more
cost-effective it's going to beExtremely efficient correct and
then the more advertising I canput in that market.
I mean, everything worked.

(50:31):
You know you're supposed to benumber one or number two.
Number three in the industryain't going to cut it, I don't
care what industry you're in.
So we weren't going to benumber one or number two, number
three in the industry, theyain't going to cut it, I don't
care what industry you're in.
So we weren't going to benumber three.
Right, we were going to benumber one or number two and we
always in our brain felt like wewere number one.
And I think we were.
I think we had the bestmousetrap.

(50:52):
We didn't miss numbers.
You know I'm not tooting my ownhorn, you've got to understand
this.
We had a superior team andeverybody bought into it.
Now you mentioned Aarons wasyour competitor.
We didn't think of competition.
You know who.

(51:13):
Our competition was Ourselvesand we put out reports.
If you were a store manager,you knew where you stood in
every category.
2,000 stores down, that's a lot.
We put it out every singlemonth and we did break them down
to major league, minor league,super league.
We had maybe five revenuecategories of stores.

(51:34):
So they knew that the smallerstores, our smaller stores, were
$60,000.
I mean, we had stores doingover $300,000, which is unheard
of.
A lot of that's attributed itgoes back to this.
What happened?
Our managers had the ability tomake a lot of money, a lot of

(51:54):
money.
We paid them on revenue andprofit and we re-evaluated it
every quarter.
They got some pretty handsomebonuses out of it.
If they kept driving revenue up, their base pay went up and
their bonuses went up.
If you took revenue back, therewas a consequence.
Now we're not going to hit youthe first time, but you can't go

(52:18):
back.
There's no going back when youhit that ceiling you need to
stay there.
And let me tell you something,and it's a mindset we created a
diamond club, the firstmillion-dollar store,
million-dollar-a-year store.
This was early on and we had ahandful of those that were doing
over a million.
I'm talking maybe we got 100stores in the system.

(52:40):
They came to me and said what'snext, ken?
What's next?
One of these meetings where Imet with people and I'd bring
them in top performers, and theysaid you know, we feel like in
our system we've reached the topof this mountain, but you
hadn't.
I said you can always do better.
They said exactly, but what'sthe next deal?
So I said we've got a onediamond, let's make it a two

(53:02):
diamond.
No, I didn't say it, it wastheir idea.
Why don't you have a twodiamond?
Okay, there won't be many ofyou in it, you know like three.
So we had the next manager'smeeting.
I think there were four or fivestores that met $2 million a
year and we serenaded them.
We made them look like heroes,gave them new rings and all

(53:24):
kinds of crazy stuff, but theywere the kings.
You know, in Queens when I left,with 2,000 stores, we had 300
or 400 of the company storesdoing over $2 million.
We had 300 or 400 of thecompany's stores doing over $2
million.
We had three diamonds, we hadfour diamonds and had a
five-diamond store doing $5million a year.

(53:47):
They took that incentiveprogram out.
Oh my gosh, let me tell you,circuit City made the same
mistake years ago.
Circuit City was rocking man,yes, and they did two fatal
things.
They had this space for washersand dryers, white goods, whole
corner of the store and they'rethe accountants.

(54:09):
That's where the bean counterswill screw you up if you're not
careful.
And the margins on theappliances wasn't as good as the
margins on the little thingsoff throughout the store.
So guess what?

Speaker 1 (54:19):
they did.

Speaker 2 (54:20):
There were margins, it was profitable.
They killed it.
That whole corner of the storeyou walked in it was empty.
So automatically revenue isgoing to go down.
Maybe margins got a little bitbetter, but that margin was
already there.
This was added income for thosestores.
Already there, this was addedincome for those stores.
Then they got smart and said,well, we got to cut expenses and

(54:44):
they cut out their highest paidsalespeople, their best
salespeople.
They decided we can do betterwithout you and pay everybody
less.
Within a year they were gone.
I mean dumb decisions, and so Ihate to say it, but errands

(55:05):
through this course of time.
Wanted to get rid of these guysmaking $150,000, $200,000,
$250,000 a year.
Well, guess what You're goingto get rid of?
What they did and accomplished,Correct?

Speaker 1 (55:13):
Correct what goes one , goes the other.

Speaker 2 (55:15):
And so it wasn't important anymore there to
become a $2 million, $3 millionstore when they threw that out.
The reason why we had so manystores was the effort of that
little group that wanted to geta bigger deal.
And then it followed suit thateverybody strived to be up there
.
They lost that, they lost thecompensation program and they

(55:38):
lost the drive for thosemanagers to want to do more.
Why try?
And then I think thecollections have gotten horrible
.
I mean, I'm hearing numbers 6%,7%.
Right, hell, we were never over2%.
They took the decision-makinginto some algorithm and took it

(55:59):
out of the store's hands.
This e-commerce thing mentallydrove them and they were
automatically approved throughthis other thing and they had to
take this business.
They put some crazy products inphones you don't think we tried
phones before?
Are you kidding me?
And so all that resulted in thelost revenues.

(56:21):
It's a combination of lots ofthings, but we built a system
that all connected together.
And so when you startdismantling the right front,
change the tire pressure on thattire and you change the
carburation on this and youchange the motor a little bit
and you downsize, your car ain'tgoing to run like it used to.

(56:41):
So it's not running.
They decentralized their storesand went to centralized
collections.
Are you crazy?
They decided to have big superstores.
Duh, you don't think we didthat.
So what they did was they put apremium on new inventory and
all the consumers saw in thisnew store, gen X or whatever the

(57:04):
hell they call it, was newproduct and they gave away
pretty much the used product inthe back room.
You make your money in theindustry on recycling, on
pre-lease product, yeah, and themore time you spend on that
product to make it like new, thecustomer will reward you with a
higher value.
It's so simple, you know.

(57:25):
I've seen competitors'companies and that's why we
created what we call acertification zone that you walk
into brand X or brand Y and yousee all the flaws on the
product and they're still tryingto get a premium.
Our customers pay a premium fortheir product.
It better look damn good, right, and it's amazing what a steam
cleaner to do.
It's amazing what touch-upmarkers to do and really

(57:48):
spending a little extra elbowgrease on the product.
The customer is going to rewardyou with value every time.
It makes so much sense it doesevery time it makes so much
sense?

Speaker 1 (58:06):
It does, I mean.
So do you think that the ideaof the margins, the idea of
business, interrupted what wasgoing on in the early?
Well, after the 10s, you know,2012, 2013, 2014,.
And the idea of, well, let'sstream it, let's make it more
efficient, let's figure out howto dial this into a certain
manageable algorithm, kind ofset way from everything that had
started before into we gotgreat margins, but maybe not in

(58:26):
the right ways, and that kind ofset decline in the stores.

Speaker 2 (58:29):
Sure, and really the manager.
I don't know the inner workings, but this is all I hear from
outside that the manager lostthe job of being a manager.
When I'm not making thedecisions and I'm not
responsible for my credit, wow,Some independent guy, little guy

(58:52):
, works in the corner.
I don't know who the LA worksfor, but you lose that
competitiveness.
The reports I'm telling youabout, Well, the relationship
too.
I mean because the relationshipis just not built.
It's that person trying to saveyour store.

Speaker 1 (59:05):
Absolutely.

Speaker 2 (59:06):
You make me responsible for the volume of my
store, but yet you want thisclown back in the back I'm sure
they're not clowns this personthat I'm not accountable for to
collect for me.
Are you kidding me?
This is a personal relationshipbusiness 100%, it's shaking
your hand.
Yes, absolutely, first namewhen you come in, whether it be

(59:27):
once a month or every week.
It's Pete, you're the man.
Yeah, Having some fun, baby,you know, make it fun.

Speaker 1 (59:34):
How are the kids?
How did you make it out?
I know that you guys said thatyou had that family gathering
last week.
Yeah, because part of what wewanted to always say things that
happen in this industry that wefelt needed to be said and we
needed to be able to somebody tostop, play and repeat, and
that's why we started thepodcast to really get that
knowledge out there is that thisis a relationship business.

(59:57):
Despite what's out there in theworld and despite what you can
look up on YouTube and TikTokand whatever you see, that's not
our goal.
That was never the goal.
The user, the consumer, to getto an opportunity of ownership
is the number one goal that wehave Now.
How do we get there?
Of course there's advertisement.
Of course there's showrooms.
Of course there's deliver.
Of course there's other thingsinvolved.

(01:00:17):
Then there's collections.
How do we get?
What do we get?
Do we have DCs to bring downthe pricing?
Do we order in bulk?
What is it?
Is it a special order?

Speaker 2 (01:00:25):
It's a lot of that combination, but the root of it
all does come down to thatpersonal relationship.
And you know, too many timesour industry has turnover and
that really hurts the storebecause the consumer loses trust
.
They finally trusted you andnow they wake up and you're
promoted or gone.
I was in one of our franchisemarkets years ago and they had.

(01:00:50):
I mean, we had great locations,small town but big enough for
two stores.
We had one on the east and oneon the west main street,
beautiful locations, bestlocations you could possibly
have.
And we had flown in on a privateairport and got a little cab
driver, um, and of course we gotour errands stuff on and I

(01:01:13):
asked, asked the cab driver, itwas a gal and I said hey, where
would you get a TV in thismarket?
And she hesitated to answer thequestion.
She said I know y'all are witherrands.
She said but do you want me totell you the truth?
I said yes, ma'am, I do.
She said I go to Rent-A-Center.
There's a little guy by thename of Mark and I drive by your

(01:01:37):
locations every day.
They look beautiful.
I've never walked in this store, but little Mark at
Rent-A-Center has been there along time and you know what?
I trust him and that's why I dobusiness with him.
Well, we proceeded.
After we got to the store, wegot somebody to take us to the
rental center and the rentalcenter store was kind of in the
middle but it was off the beatenpath.

(01:01:59):
If you rated their location ona scale of one to five, it was a
one.
We had the golden tickets, butit really doesn't matter.
It's about building thatrelationship with that customer
and we hadn't had thatopportunity to get that customer
because they are loyal, notthey're loyal to Rent-A-Center,

(01:02:20):
they're loyal to the people,they're loyal to the people.

Speaker 1 (01:02:23):
That is huge and that's something that I've, you
know, throughout the years.
I mean I've tried to managetrain teach show and that's the
thing I mean.
You always want brandrecognition, you want your brand
to be on top, but they don'tmake the relationships with the
brand, they make therelationship with the people in
your store.
And then the brand comes in andthe brand comes into play.
And the thing is, if you'relooking for longevity, if you're

(01:02:45):
looking for somebody who wasgoing to stay with you for a
long time, it could sayrent-a-sitter, it could say
Aaron's on the front door, itcould say Joe's rent to own.
But the truth is, did I getwhat I wanted from you?
Are you taking care of me?
And when I have a problem, canI call you and have a regular
conversation?
You're not beating me down andI'm not beating you down, but we
look at each other as peopleand say this is my dilemma how
can we help each other getthrough it Right?

Speaker 2 (01:03:06):
And that's why I went back to you.
You don't compete with thecompetitor, you compete with
yourself, and so there's enoughroom for everybody in my opinion
.
If you're running a good, solidbusiness, because everybody
gets traffic in the doors, whatdo you do with it when they come
in to earn that customer'sbusiness?

(01:03:27):
And you know, since I've beenwith buddies, it's funny.
I used to think all thecompetitors were shaking in
their boots.
Let them shake was one of ourterms.
They weren't.
You know, at the end of the daywe existed, but we're existing
as a competitor of Aaron's.
I never heard anything aboutAaron's, but I don't think they

(01:03:49):
have the same mousetrap anymorethat they had.
They got nothing to boast aboutother than I'm not really sure
I think that's where they'vekind of lost.

Speaker 1 (01:03:58):
Yeah, it's different than it used to be.
For sure, there are somechanges in the rent-to-own
mindset and the rent-to-ownindustry altogether.
Talking about when you left in2013 and then coming through
here and you changing throughthe brands and you're now an
owner of a different company.
What do you think of some ofthe things that have changed in

(01:04:19):
the last 10 years that havereally kind of changed a
business?
Because we, you know, Iremember 2013, 2014,.
It's not the same as it istoday and you know, I know, that
it goes in about a decadeincrements.
Right, there are some changesthat happen over and over.
There's evolution, evolution,correct, but I know that from
the 2013-2014 era to the2023-2024 era, the biggest thing

(01:04:42):
, of course, that changedeverything was towards the end
of the pandemic really changedthe mindset of some consumers.
At the end of thatconsumer-based change, we also
have a generational change,because once everybody was set
at home and they were kind ofset in their own spots, the baby
boomers are different shoppingbeasts than the Gen Xers.

(01:05:03):
Well, so am I.

Speaker 2 (01:05:05):
Right, so are you.

Speaker 1 (01:05:07):
And then now we have the millennials are getting a
little older and they arecompletely different from the
Gen Z that are coming throughand they do like 80% to 90% of
their purchases through theirmobile device, and so it's a
huge difference.
What have you seen?
What are these changes thathave happened that you have seen
in the last decade or so thatyou think have really changed
the industry?

Speaker 2 (01:05:25):
Well, you've got to recognize that.
I am sure foot traffic in thestores is much less than it used
to be, but in general customerservice in this country has
gotten terrible I mean awful.
You ever try to call Verizon oryou ever try to call DirecTV.

(01:05:47):
I can go one after another andyou end up with recordings.
Put me on hold.
It goes here.
I'm on the phone for four hours.
It's terrible.
It's hard to talk to a realperson in most businesses.
God, we've got a huge advantagethere.
But we've got to recognizeyou've got to work that phone

(01:06:07):
and that computer.
And when you get an inquiryover the Internet in their golf
cart business, same way I don'tget the walk-in traffic.
People are lazy.
I wish they'd come in the storeI could show them more, but
they'll buy over the phone, withme sending pictures and taking
the time to do it.
But you've got to recognizethat that's the most important

(01:06:31):
thing.
Going in is a customer whoinquires.
If you don't get with them ASAP, you don't get the business.
Now I know buddies and errandsand run a center all have
e-commerce and they'redownloading stuff to you that
they could theoretically buy.
I don't think that's what thecustomer really wants.
I still think that lead thatcomes in needs you to pick up

(01:06:54):
the phone and talk with thatcustomer and tell them what
they've picked out.
If you've got something thatmay be better, then you can
suggest that.
Don't just let it be.
Well, I picked the picture,that's what I want.
Boom, boom, boom.
You know it goes back.
We said this is a personalrelationship business.

(01:07:15):
It ain't a personalrelationship if it's all done on
e-commerce.
You've lost that.
Yes, so, and that's reallyimportant to recognize, it can't
be a personal relationshipbusiness if we don't make it one
.
So any of those inquiriesrequire touch, in my opinion.

Speaker 1 (01:07:32):
You A human touch, a human factor.

Speaker 2 (01:07:34):
Human factor.
No extensions to go through, noway.
Thanking you for the businessfollow-up call when it's
delivered.
Again, you can still do theclose over the phone.
You remember what I told youabout a close?
Well, that's kind of becomeobsolete if more business is
being done over the phone, I gotit.
But the manager can still go inand go through his ritual,

(01:07:56):
absolutely, you know.
All that can still get done.
So that's a big one.
I do think there's been asignificant change and our
industry has hurt itself in thatwrite-offs are higher than they
were.
They are.
I just look at the publiccompanies when they were public.

Speaker 1 (01:08:14):
I was going to say if you look at the public
companies, you can see thattrend has hit everybody.

Speaker 2 (01:08:18):
The guys in the retail stores build in like a
10% charge-off.
That's not good for theindustry because customers are
getting wiser, so they know whowill come after them and who
won't come after them.
But again they will work withyou if you tell them all your
programs.
We've got so many tools thatare available to our people and

(01:08:42):
people.
I know competitors used tolaugh it up.
We had a toolbox.
I can make good on this dealNow.
Customers abuse extensions andwhat, but you know what.
Passers abuse extensions andwhat, but you know what.
If I can keep them on the books, I can get them to pay and I
make the deal favorable to me.
Why not do one?

Speaker 1 (01:09:02):
Well, it's a give and take because right, you are
right it has gotten to adifferent situation, whether it
be because things are moreexpensive and they can't afford
it, or because they've been in,you know, now it's become
generational, we're hitting 40,50 years of rent to own and
maybe they know that theirparents have done something and
they kind of pass that down.
No matter how you get to thatend thing, the main profit, the

(01:09:24):
main profit for the consumer andthe company, is to get to
ownership, end ownership.
So let's find a way to get itthere.
Let's find a way to get thereBecause, at the end of the day,
I don't want to have to keep onchasing you.
I don't want there to be anissue of you having that
merchandise and you're alwayslooking over your shoulder and
you're trying to figure out ifthere's a legal issue or not a
legal issue.

Speaker 2 (01:09:53):
So what do you do with why they can't make the
payments on time?

Speaker 1 (01:09:57):
They don't know.

Speaker 2 (01:09:58):
Jimmy had to buy tennis shoes or the grocery bill
was $20 higher and the gas billwas $10.
They don't know why.
They just know it's tight.
Again, I've got to havecustomer participation with me,
but I can do not just a pass infree time as kind of a delay of
the game sometime.
You're just going to be back inthe same boat next month.

(01:10:21):
But let's find if we can dosomething that's meaningful for
the customer.
Look, you've got 12 months togo.
We used to say, look, I'll add50% more terms, so your 12
months becomes 18 or whateverthe deal is, and I'll discount
you 25%.
Now, that's a win for me andit's a win for you.

(01:10:43):
With that, taking your paymentfrom $100 a month, 25 a week,
down to $19, is that somethingthat would be good for you?
Or let's look at your agreement.
Is there something you couldjust live without?
You don't have to pick it allup, right, right.
But again, working with thecustomer, having a good, letting

(01:11:06):
the customer see I'm on yourside.
We're going to win together andI think that's got to be
conveyed to them.
But many times, the way we treatthem, they run from us and
that's what causes write-offs.
If we're the bad guy you thinkthey're going to answer that
call from buddies?
Probably not.

(01:11:26):
And then we all knock on thedoors and they don't answer.
You know, reason is alwaysgreat, but it started with that
closing room and how we managedthe customer when they came in
in the past that we can be likethe little gal I was talking
about.
We can be trusted.
I don't really want yourmerchandise back.
I really don't.
I will take it back if I haveto because I can make more money

(01:11:49):
that way.
But you see what I'm saying.

Speaker 1 (01:11:51):
I really want you to become the owner, Absolutely
Getting them to ownership andgetting them to understand it.
I mean, collections neverstarts at the back end.
If you start your collectionsin the back and you have failed.
Your collection starts in aclosing room or when you're
closing that agreement, so tospeak.
And the follow-up call Well,always.

Speaker 2 (01:12:07):
Always.
So what happens with thefollow-up call is so important.
That's part of the big fact.
The follow-up call's got to bethe manager, and so I get an
opportunity to find out how mydriver was.
It's a follow-up to make sureyou're happy.
He set everything up.
He explained how it works.
You're happy with the product.
Yes, sir, just want to remindyou, your next due date's coming
up this whenever it is.

(01:12:28):
So we're all good there.
Right, again, it's veryimportant?

Speaker 1 (01:12:33):
Well, because you start going down the list of
things that have changed andthen that was going to be the
follow-up is the fundamentalshaven't changed.

Speaker 2 (01:12:41):
Well, look how much football's changed, but has
blocking and tackling notchanged.
I mean, the game has changed.

Speaker 1 (01:12:48):
Still fundamentals.
The fundamentals are there andI think sometimes we lose the
forest for the trees.
It's changed, changed or it'smanipulated, it's grown, it's
evolved.

Speaker 2 (01:12:58):
That don't give me any excuse not to do the basics.

Speaker 1 (01:13:00):
Right.
But then you go back and you go.
Well, I mean, if you're closingthe agreement the right way, if
you're making sure thecustomer's not getting in over
their head not just for them,for you too, because it's nice.

Speaker 2 (01:13:17):
You're not doing yourself right and a manager
manages risk, so he's got a riskassessment.
I mean, sometimes you don't givethem what they want, but
they're in there.
You know.
You just got back a green couchyesterday, sofa, love seat
combo.
Whatever, my risk is minimal.
You've got a prettyon-the-fence customer and
they're wanting a $200-a-weekdeal.

(01:13:38):
I could get them in this andsave them money and minimize my
risk and if they want somethinglater, prove to me they can pay
on a timely basis.
The store is yours but you knowthat is our responsibility and
that e-commerce, all that crap.
You can't replace that with agood head.
But you take collections awayfrom a manager.

(01:14:01):
He'll never make that offer toa customer.

Speaker 1 (01:14:06):
Part of the whole idea is, I think, the
empowerment.
You have to empower your GMs toknow They've got to act like
they own the store.
Right, and that thought ofownership I'm going to be
responsible for the P&L, the G&L, all my guys and all my product
.
At the end of the day, nomatter what happens, take it
away and you get what you got.

Speaker 2 (01:14:25):
You've got a $2.2 billion company that just got
sold for $300 million.
Think about that.

Speaker 1 (01:14:32):
That was going to be one of my thoughts.
At one point in time it waspublicly traded, it was worth a
lot, and then they buy it backfor $10.10 a share or somewhere
they're close to and take itback to private.

(01:14:53):
When that happened, I know thatyou weren't a part of that.
How?

Speaker 2 (01:14:55):
did that make you feel?
When you see that happen, itwas sad, but you saw it coming.
I mean, look, they put educatedleaders in with nice degrees
over people from the industryand when you don't have that

(01:15:15):
knowledge of the customer, thatyou don't have that knowledge of
your managers, you're runningit from an ivory tire.
And this business cannot be runfrom an ivory tire and leaders
need to know what the people aregoing through every day.
I know I managed a store forthree and a half years, so I

(01:15:39):
managed a region for three and ahalf four years.
I've done it all and I've doneit all successfully.
Like you said, my first yearthat I ran a store it was
terrible.
I mean the pinball and thepinball machine had no direction
.
Did I run a store?
It was terrible.
I mean I was the pinball andthe pinball machine had no
direction.
Charlie was going to have ameeting and he said get your P&L

(01:16:02):
.
I didn't even know what a P&Lwas.
They remember sending mesomething with a bunch of
numbers and they said well, youbetter know those numbers when
you go to the meeting.
I was wondering what this was.
They sent my regional managerthat I had would come into my
store at six o'clock at nightbecause it was close to where he

(01:16:22):
lived, and go to a back office,kick his feet on the desk and
call his girlfriends up and walkout.
Man, I am so tired I'm doingsort looks good and walk out the
door.
And I've learned how to be agood regional manager by what

(01:16:43):
not to do.
I built a lot of lists ondon'ts these are don'ts and this
and I passed them along topeople.
You know you want to make adifference.
You know we're in a job as wemove up the ladder.
It's not about what we doanymore, it's about helping
people accomplish what they wantto accomplish.
And we've got the knowledge andthe wisdom to pass it forward

(01:17:04):
and move it forward.
And always, if I didn't getanything out of life, you know I
did the manager thing and I gotit.
I was pretty good at it.
I wasn't very good my first year.
I didn't get fired, so that wasa victory in itself.
But I learned on what not to doand I certainly made enough
screw ups.
But every time I screw up Isaid okay, I didn't handle that

(01:17:26):
situation right.
I know what would I do the nexttime.
We didn't have books.
We didn't have manuals.
Nobody taught me what to do.
When I started with the company,I was given a desk.
I thought that was pretty cool.
Now I'm 20 years old, 21 yearsold, and my manager is a gal,
gives me a metal tray and saidhere, these are your delinquents

(01:17:48):
, just call them.
Call them.
I didn't know what a delinquentwas.
I thought juvenile delinquent.
Do I need to call the police?
What am I doing here?
So I figured it out.
They had a card, the headphonenumbers.
Oh, look on, here we, they oweus money.
Okay, I said, lynn, do you wantme to call and collect money?
Is that what you're wanting?
Yes, just call and make a noteon the back.

(01:18:10):
Okay, then the phone rings andeverybody's looking at me.
Like, well, you're not going toanswer the phone.
Okay, I'm learning my job.
I'm calling these cards.
And now you want me to answerthe phone?
Okay, I got it.
I've never answered it before,but I'm learning.
And next thing, you know, thebuzzer in the front door rings
and everybody's looking at me.
Here, I mean here.

(01:18:32):
We had clipboards.
Our motto back then was leasedby the piece.
And you went and greeted acustomer and said I'm glad
you're here, we lease everythingby the piece.
This was a time managementthing.
How far we've come.
This was 1974.
We'd hand the clipboard it wasa great concept to the customer
with a pen, and so you just walkaround.

(01:18:54):
When you see something you like, write the code down, bring it
over here and I'll just total itup for you.
And we did business that way.

Speaker 1 (01:19:02):
That's a different model than it is today.

Speaker 2 (01:19:03):
Oh yeah, it was a total.
You're the customer service.
Bring it to the counter.
I'll put it in my calculator.
This is the total.
I'll write a manual agreementand we're good to go Crazy, but
it has changed a lot.

Speaker 1 (01:19:20):
Something that Aaron's also did, different than
any of the companies that I'veworked for, is that it was a by
the piece because, regardless ofwhere I have been, a four-piece
dining or I should sayfive-piece dining is the table
and the four chairs.
Or when you talk about a livingroom set, it was a sofa and a
love.
When you're talking about athree-piece table set, it was a
cocktail table with two ends, orlamps came in twice, but all

(01:19:43):
the employees that I've evertalked to on errands it was a
piece model.
You can have just one piece,you can have all the pieces.

Speaker 2 (01:19:49):
So if you were short a piece, you were short a piece,
so that's a write-off Prettysimple they go in and all the
chairs are broke, we throw themin the dumpster and I've got a
table left.
I've devalued the chairs.
If I want to buy some morechairs I can do that.
But it was an inventorymanagement system and we didn't.

(01:20:11):
You know, you have to count itBOR, Right, but some of that's
what's the whole unit I guess,is the way.
But we just came from theschool that everything had a
code on it and if you're missingthe chest when you go to return
a product, maybe they want tobuy the chest.
I don't know.

Speaker 1 (01:20:27):
Well, that was one of the advantages of also having
Woodhaven was to be able to sayI can get the pieces that I need
to either refurbish or replacechairs, cushions, whatever the
case is, and make it that easy.

Speaker 2 (01:20:39):
But with all the people we dealt with, how you
set it up to purchase from themwhen you got a little power in
what you're doing will set youup for that for the future.
So it was very important for uswith any vendor, even with or
without Woodhaven, that we hadthose relationships.
It's funny you mentioned theinner workings for a washer and

(01:21:01):
dryer earlier.
You know stupid me.
I remember just piling upwashers waiting for some mobile
repair guy to come repair themand he charged out.
We should have been in themobile repair business.
I'll tell you that he charged alot and I had a manager that
went to youtube and just kind offigured it out like you said

(01:21:24):
you did, and it was like thelight bulb went off on me.
A we're repairing it immediately.
I can do this in a customer'shome.
It didn't cost me a washer thatI got to be short now until
this one's repaired and then gotto go back and I'm probably
going to damage theirs when I doit.
So the more of that type ofthinking we need in this

(01:21:47):
industry and duh, me had nevereven thought about it because
I'm not mechanically inclined,but a lot of people are and I've
heard people say you can doabout anything with YouTube Boy.
That's a big one right there.
Well, we call it YouTubeUniversity.

Speaker 1 (01:22:02):
I went to YouTube University and figured this out.

Speaker 2 (01:22:04):
But I don't think a lot of people in the industry
understand that.
And so if you don't takeanything away from anything I've
said today, man, go to YouTube,Learn how to repair your
appliances.
There are common parts thatneed to be stocked.
Our guys put all that out anddo it yourself.
This is a deep you don't needto hire.
There's no rocket science inwhat we're doing with repair.

(01:22:26):
If you can't do it, thenobviously it needs to go.
But boy, you're talking aboutcustomer satisfaction.
You know you go get it repaired.
Half the time it's a friggingvent and the dryer's clogged up.
Right now, Instead, it's easierfor us to take the call and say
, well, okay, I'll bring aloaner out and bring it back to

(01:22:47):
the store.

Speaker 1 (01:22:50):
You're tying up two dryers in your inventory.
I don't think something thatisn't talked about is how much
loaners can affect you if youhave too many out there.
I mean you're getting oneincome for two pieces that are
being utilized or used.

Speaker 2 (01:22:59):
It's a lot.
It is a lot.

Speaker 1 (01:23:01):
So when you come from such, you're talking about 74.
We're talking about all thedifferences that have happened
Disco Disco era and all thedifferences that have happened
between now and then Disco Discoever.
And you know all thedifferences that have happened
between now and then.
When you first started you saidyou were in your early 20s.
Who is somebody or a group ofpeople that you can say helped

(01:23:24):
influence you, guide you, mentoryou at that point in time that
helped you get to where you got?

Speaker 2 (01:23:28):
That's a great question.
There were a lot of people andI was very influential.
I was like a sponge and Iencourage everybody to find
different people, but I was veryfortunate.
Charlie had a president ofAaron Rents when I joined and he
left the company because he hadan affair with my manager.

(01:23:50):
Oh no, oh no, and that's how Igot promoted to become a manager
.
He hired a guy to be a VP bythe name of Pat Pearson, who
came out of First National Bankor somewhere, but he was big in
the banking industry and he wasrelocating his family to Atlanta
and I was single at the timeand he wanted to learn the

(01:24:13):
business in my store, which wasgreat.
I needed it.
I'm telling you I was a sponge,but Pat would staying in a
hotel, would always take me outto drinks after work and I'd
just ask question after question.
This was after that meeting Ihad gone to about the P&L,
didn't even know what it was, soI wanted to know how the

(01:24:35):
company worked, and so it wasduring the time I was able to do
that to his family and then hemoved into the home office.
I learned a lot from him from amechanical management
standpoint.
Later on.
A guy by the name of Tony Hodgecame in the system as the
national sales manager.

(01:24:55):
Me and Tony got along just likethat.
He brought new ideas.
Remember the clipboards?
Yes, he came, it was so obvious.
But when you're in that culture, that's what everybody did.
And he came in.
How about we keep theclipboards?
How about we walk the country?
We just walk with them.
Right, I went.

(01:25:16):
That's a pretty good idea.
I didn't know better, I justdid what I was told to do.
So he was very instrumental inme getting my marketing brain
which our company at that pointin time was very good from a
management standpoint, very poorin sales.
And then later I was asked toopen up.

(01:25:39):
Well, I had got promoted tobecome a regional manager in
Washington DC.
I was up there for about threeor four years.
I got transferred to Dallas andmy job was to manage the Dallas
market but opened the WestCoast and opened New Orleans.
Managed the Dallas market butopened the West Coast and opened
New Orleans.
And the guy we hired in the WestCoast was a longtime competitor
to Charlie Ladermill.

(01:26:00):
His name was Rusty Hampton.
Rusty ran a company calledGrand Tree Furniture Runnels.
They were the dominant playeron the West Coast.
We were becoming dominant onthe East and they had gone.
I don't know what happened, butRusty had left and he decided
he wanted to come to work for us.
So rusty worked for me, whichwas kind of cool, but, man, I

(01:26:23):
learned, learned a lot.
Now rusty wasn't much of anoperator but he's the ultimate
sales guy and he helped me todevelop a sales manual, some
strategic things in the store tohelp us from a sales
perspective.
And so getting that sales inputfrom Tony and Rusty was really,

(01:26:46):
really significant for mebecause I was in a controlled
environment.
Before that.
It was like put the wings on meand let's fly.
Controlled environment beforethat it was like put the wings
on me and let's fly.
And I think at that pointthat's when my career really
took off, that I was doing newthings instead of old things.
Even though the 70s and itseems very basic right now it

(01:27:10):
was revolutionary in ourorganization at that time.
So it helped me fly high and Ithink some other people started
to adopt that.
We didn't have any manuals.
We didn't have nothing writtendown.
It was pretty archaic.
When we started Rent to OwnAaron, rents was still manual.
I was able to contract acomputer software company me and

(01:27:30):
my team to computerize us, andit was a disaster, but we
finally got through that andhired a guy that created our own
program.
Ten years after all that, aaronRentsch was still on the old
archaic system, you know.
Remember we got to be separate,and so I don't think they got
computerized until after Y2K Isthat crazy?
So there's some old schoolstuff about the history of

(01:27:54):
Aaron's and we kind of broke allthe mold on that.
And Charlie, let me do that andI was kind of shocked on some
of the things he led us to do.
I kept him in tune.
I didn't want him to ever besurprised because we were doing
some things that were not donebefore in the old legacy.

Speaker 1 (01:28:15):
But that's how you grow.
I mean, that's how you evolveI'd used that earlier is
evolving from what we are towhat we want to be.

Speaker 2 (01:28:22):
And he let us experiment.
And so we tried.
I mean, we went to thesemeetings and tried I would go
experiment in 10 stores, 15stores, because we had enough
volume of stores that we had theability to identify a project
and put it in the stores.
And people loved it in thestores and if it worked we'd
move it forward.
If it didn't, nobody ever knewabout it.

Speaker 1 (01:28:44):
We let it die in the mine.
It's okay.
That's a bad idea.
So is it fair to say there's ahandful of people throughout the
years that have playeddifferent roles that have really
helped you get there.

Speaker 2 (01:28:57):
I think everybody that's ever been successful has
had people that have had biginfluence.
Those three people were veryimportant to me and some very
formative years of me and Ithink I became kind of a
combination of all three of them.
So one was very strategicallystrong in operations and I I was

(01:29:20):
an animal in operations, butthen you throw in two master
sales people that I'm like afreaking machine now and, uh, I
think that had a huge influence.
Now you mentioned other peoplein my life and maybe situations,
but one thing I always foundyou've got to be competitive to

(01:29:42):
be successful in anything you do, and so, looking to hire people
, I always ask what did you doin high school?
What did you do?
Are you competitive?
Oh yeah, I played on thevolleyball team.
Ask what did you do in highschool?
What did you do?
Are you competitive?
Oh yeah, I played on thevolleyball team.
Whatever you did, if you wereon some type of team.
I think that's importantbecause it takes teamwork to win

(01:30:04):
number one, but being from acompetitive environment and
nothing against people in theband, but generally speaking,
people in the band aren'tcompetitive.
They're just all singing to thesame music Cohesive, but not
competitive.
So I've gone around to regionalmanagers and asked them about
their background.
What did you do in high schoolWith 15 of us in a room and

(01:30:27):
every single one of them playedsome type of competitive sport?
Now these are people that weresuccessful as store managers and
they've been bumped up andyou're looking for a common
denominator Different stories.
Some of them college educated,some of them dropped out, some
of them got married early.
But that root came from a verycompetitive background, not any

(01:30:49):
particular sport.
I lettered in seven sports inhigh school and was a master of
none.
But I did them all.
I participated, but I got goodin football.
But I didn't recognize thatuntil my senior year.
I was average, and when I sayaverage, I wasn't bad, I wasn't
good, I was.
But my senior year I realizedthat everything's coming to an

(01:31:14):
end.
I always wanted to go to thenext level of play.
I said I'm not going anywhere,I'm just a Joe Blow average.
I don't even know if I'm goingto start, but I dedicated myself
to that year of getting myselfin super shape.
I did everything I could to bethe best I could be and I became

(01:31:36):
captain of the football teamand it went both ways, my senior
year.
It wouldn't have happened if Ihadn't committed myself.
But what it gave me afoundation on and my daddy
taught me this a long time agoyou can do anything you set your
mind to, and I realized thatthat's the first big
accomplishment thing I haddedicated myself to in my life.

(01:31:59):
And I did it.
And so I knew, whatever it isI'm going to do I don't know
what it is I ended up screwingmy back up, so I'm not going to
do manual labor.
I've got to find something Ican get my hands on.
And it's funny, the first job,real job I had, uh was with a
company called magic market.
You ever hear of them?
It was a munford company.

(01:32:19):
They were convenience storeslike 7-elevens and, uh, I was
going to be a district manager.
And so they out of the gate.
I got three stores I mean outof the gate.
And you're hiring all thesekids to run these stores and
they're open all the time andthey don't show up to work.
So guess who's working all thetime?

(01:32:42):
Me?
Well, they were going to get meup to seven stores and on
Christmas Day they had a meeting, and that's the first time I
really met all the districtmanagers.
They had a meeting and that'sthe first time I really met all
the district managers and therewas like a badge of courage over
how many days in a row they hadworked.
I'm talking not days, years.

(01:33:05):
Some of them had worked three,four years without a day off and
they were proud of it.
And I'm going to myself, wow,out of it.
And I'm going to myself, wow.
I said I'm a pretty freakinghard worker, but I'm not.
I'm not giving you my life.
And ironically, I had made theapplication at aaron's and they
call me and man.

(01:33:26):
When I got that job I found outthey were closed on sunday.
We closed at seven o'clock atnight.
I went cakewalk.
So, in comparison, right, yeah,and other people would say, oh,
that's a horrible job to me.
I'm not working in a mall tillnine o'clock cakewalk, and so I
always tried to find people fromthat type, similar background,

(01:33:49):
but one of one, a lot of thosepeople had told me the Pat
Pearsons who I met, theoperational guy you always need
to hire people better than you.
And a lot of managers don't getit.
They want to hire people thatthey can control and they don't
understand you hire peoplebetter than you.

(01:34:11):
They're going to lift you upRight.
And a feather in your cap longterm is how many people can you
get promoted out of your store?
And that's the way you getpromoted up that you can develop
people coming in.
So you know, I'm a kid, I'm 31years old, running a frigging
store.
Most of the people I hired were30, 33.

(01:34:32):
We were a veteran crew with agreen manager who was finding
his way, but they performed andthat was my job, even at the
store level to help them besuccessful at what they did and
put some fun.
Man, you're with these people alot of time.
Got to have fun.

(01:34:53):
Man, it's a fun job, job, let'shave some fun.
Those people come in the door,need me.
I need them to survive, sothat's the best way I can end.
It is through all these things.
You don't have to be seriousall the time.
You have to be regimented andconsistent, but let's have a
little fun.
We're're competing baby.

(01:35:13):
I've already called my Decaturstore.
I know they've only got two out.
Today I already got four.
I'm going to kick their.
That's the way my brain is.

Speaker 1 (01:35:22):
So if you were to say , over the last 50 years, now
that you've been doingrent-to-own, you've been in this
type.

Speaker 2 (01:35:29):
Yeah, I started at nine years old, so I'm only 59.

Speaker 1 (01:35:33):
All right, all right.
Yeah, I started at nine yearsold, so I'm only 59.
All right, all right.
But doing this over the last 50years and seeing the
progressions and the evolutionsand the changes, the people that
have helped you, the differentpeople that have helped you not
just one person, but two people,three people, the influences
that you've taken in time andtime, if you were to say these
are like the three keyingredients that I threw into my

(01:35:54):
pie to make it to where I gotto be, what would those be?
You said have fun, not beserious, not take it, but make
sure that you do the job andhave fun doing it.
You've mentioned the evolutionbeing able to find what somebody
said maybe couldn't be done butneeds to be done and we're

(01:36:15):
going to find that way, and kindof trailblazing different ideas
throughout all of this.
Are those three, or do you havea three that you say?
This is Ken Butler's threethings that I would tell you.

Speaker 2 (01:36:28):
I could tell you that , but I don't know how.
I think you've got to becompetitive and you've got to be
ambitious.
I know, as we built errands,that we had a mousetrap that was
a winner.
But and we had me who was verygood at running 30 stores how

(01:36:52):
was it going to be if I had 100stores?
How would I perform if we had200?
And so that evolution of who Iwas was going to have to change,
because I was smart enough torealize if I can't run a
200-store chain, 300-store,1,000-store, guess what?
They're going to find somebodythat can.

(01:37:12):
That's the way business works.
Absolutely so if I just keepdoing's the way business works.
Absolutely so, if I just keepdoing things the way I used to
do, it don't changeinfrastructure, like you had
mentioned earlier.
But it doesn't have to changeovernight.
It's a plan, maybe not evenwritten in my brain, but I knew

(01:37:32):
I had to evolve Things I reallywas good at early.
I liked buying merchandise.
I liked going to the market.
I liked doing all the marketing.
I liked putting my hand onevery bill.
I liked opening stores andgoing and putting signs up and
cleaning bathrooms and gettingthat store open.
I wasn't going to be able tocontinue to do any of those
things.

(01:37:52):
That was my job at one time andthat completely got thrown out
the window when, how?
Just a step at a time, justslowly moving responsibilities
to other people who are highlyqualified to do it, was
important.
So you've got to be smartenough to grow, and I'd say that

(01:38:14):
to anybody whether you'rerunning a store, you're running
all these big stores we had thatwere $300,000 a month and four,
five, five diamond.
You run those stores differentthan you run a $60,000 store oh,
absolutely.
And the hardest thing for amanager to do is okay.
So how are you going to run it?
What are you going to do whenyou get to 100,000?

(01:38:35):
Are you going to have the samelittle crew?
No, you know.
So if you go backwards, you kindof got to back into things
sometimes.
Like I told people, you guysare going like this is a big
deal to run a 400,000-hour store.
Wait a minute.
You know what you've got to doto maintain a $400,000 store.
You can equate that how manydeliveries I have to have a

(01:38:56):
month, how many returns I haveto have a month, how many trucks
do I need to do that with?
You can back into that programpretty quick.
Yeah, you can create theformula for that.
Yeah, it's not rocket science.
So somewhere during this course, if you want to become a
$300,000, you've got to gobackwards to 200,000 and go back

(01:39:20):
to 100,000, and you're at60,000.
So this is what you need tolook like at 100,000.
This is what you need to looklike at 150,000.
And by the inches, ascension,by the yard, is hard.
I've always said that it's notrocket science if you kind of
put common sense to everything,but you do have to.
It's funny.
I never thought about 2,000stores.
I do remember hiring Todd Evansabout the franchise and he said

(01:39:41):
I'll have more stores than youwill.
Cocky little son again, I loveTodd.
But so there was aninter-competition with me and
Todd on who could get the moststores open and we ended up two
to one.
We had 1,300 company stores and700 franchise stores when we
left.
That's changed down to whateverit is.

Speaker 1 (01:40:03):
It doesn't matter.
I think it's 1,000 stores andright near to almost 300
franchise stores, 298 orsomething like that.

Speaker 2 (01:40:10):
You had franchisees paying you 6% a month of their
revenues.
All you had to do was keep themhappy.
We had the best franchiseprogram.
Our theory was to under-promiseand over-deliver, and I
remember when Todd started hesaid I got these prospects
coming in from the airport.
Can I run a limousine and gopick them up?

(01:40:30):
I said no.
I said they need to understand.
It isn't about I'm not sellingyou a franchise.
I'm awarding you a franchiseand I'm going to be your partner
.
You're going to get more valuewith us.
The distribution system and thenational advertising alone was
worth every nickel that they got, and so Well, you know, we said

(01:40:53):
that we would go back to it.

Speaker 1 (01:40:55):
We talked about doing the math, and I remember that.
I remember the commercials, Iremember the slogan.

Speaker 2 (01:40:59):
How about nobody beats Aaron's?
Yeah, that was a subculture ofours.
When we looked at each otherwe'd go nobody nobody, nobody.

Speaker 1 (01:41:07):
And then the lucky dog came out.
Yep, how did that transpire,yeah?

Speaker 2 (01:41:11):
How did that transpire?
That's a good story.
We, you know McDonald's hasRonald McDonald, and so I wanted
to create a mascot of somethingwe were into the racing and a
lot of sports events we weredoing and children migrate to
these Harry the Hawk and all theother mascots people have.

(01:41:35):
So I felt like we neededsomething as well, and so we
came up with a bunch of stupidideas.
And I wasn't there.
I just, you know, I hadmarketing and they'd go meet
with them and go it's nothitting a button with me and I
was at a race with our guy whowas our racing marketing
director and we were watchingthe race and in NASCAR racing at

(01:42:00):
that time they had introduced athing called the lucky dog and
if you get a lap down and you'rethe first car lap down on a
caution, you get your lap back.
They call it the lucky dog.
And I thought out loud at thatmoment that I heard it and I
wasn't thinking lucky dog.
I said God, oh, one of the hotdog companies really ought to,

(01:42:22):
oscar Mayer, ought to jump allover that thing and call it the
Oscar Mayer lucky dog.
Well, the next morning I don'tknow what hit me.
It was like something from god,passed it down and it said our
customers are the lucky dogbecause they're just heinz 57
people every day, hard-workingpeople, whatever their situation

(01:42:44):
.
But when they come to aaron'sthey're going to get things they
never dreamed of.
That's what we had the dreammachine, the aaron's dream
machine race, and the Lucky Dogjust fit.
So I went to Mark and said Isee, this Lucky Dog, he's just a
happy-go-lucky guy.
He walks like this andeverybody loves him.
But he's a Lucky Dog because hecame to Aaron's and he's

(01:43:05):
already pre-approved.
So we created the Lucky Dog andI'm telling you out of the
events he was more popular thanSanta Claus.
We put him on the side of thetrucks.
We had Lucky Dog stuffedanimals we gave out and we had
lots of Lucky Dog costumes.
So they were all over thecountry that different people

(01:43:26):
could fit into them.
They were hot.
We even had fans built into it.
Right, right, we offered it toour franchisees at a price.
I forgot what the price was.
He was always at the events.
He was always there with us.
I think it was a pretty bigsuccess.
Our inter-racing program was apretty big success.
Michael Walter, who wepartnered with at the very

(01:43:51):
beginning said you're toochicken to get out because every
year that we've been apartnership y'all have grown.
I said you're right, I can'tattribute it to racing, but
that's one of the ingredientsthat we branded our name Aaron's
into something that people knewwhat we did and got rid of the

(01:44:11):
rent to own, got rid of thesales and lease ownership.
It was a subtitle, but wewanted it to be known as Aaron's
Really short, really simple,and I think it worked pretty
damn good.

Speaker 1 (01:44:23):
I think it did too.
Actually, sometimes I think thenames are a little bit too much
.
It should be quick and off thetongue.
In some places you just want togo to and I always try to
advertise it as a.
If you're thinking of otherplaces when you're talking about
this one product, there's toomany places.
If I'm thinking I needsomething, the first thing I
should think of is this, and ifI can get into that point of

(01:44:43):
that person's mind, well, youcan get just about everything
here.
You know you're talking aboutfurniture and electronics and
appliances and computers and allthat.
If I can just make it so thatthey're only thinking about one
place to get that at, we'vesucceeded.
So out of all this and all thethings that you've done and all
the vast knowledge that you have, all the great things that you
were able to accomplish withouta clipboard in front of you to

(01:45:05):
say this is how you do it or….

Speaker 2 (01:45:07):
This is how we do it.
This is how we do it.
So you said that it thing againit.
So you said that it thing again.

Speaker 1 (01:45:11):
It You're right, I did it.

Speaker 2 (01:45:13):
If you don't know what it is, you better define it
.

Speaker 1 (01:45:15):
I will say that what is something that you would
leave to everybody?

Speaker 2 (01:45:21):
If you don't know what it is, you better leave it.
You better figure it out,because to me, whether culture
can be defined within a companyor it can be defined in your
store, but you've got to have it.
So either you've got it or youdon't have it.
But think about that customerexperience.

(01:45:43):
What is it all about?
I don't care if it's comingover the Internet.
Talk with the customer.
Take advantage of the things weall have advantages of in our
industry.
People call in the phone.
There's a person that's goingto answer the phone.
That don't happen with mostbusinesses these days.
Go call those, see who answersthe phone.

Speaker 1 (01:46:02):
Oh geez.

Speaker 2 (01:46:03):
It don't happen.
So customer contact isparamount.
But then what happens with thecustomer contact?
Is it a good contact or a badcontact?
So you better get doggone goodat it.
You know, I hear a simple thingall the time, and I think
Chick-fil-A does a great job incustomer service, by the way,

(01:46:24):
but their deal is my pleasure.
Right now I'll say thank you.
There are people in this oldworld, particularly more young
kids, that will say, oh, noproblem, no problem.
What do you mean?
It would have been a problem ifyou didn't say no problem, it's
my pleasure.
It's definitions of terms thatare positive terms.

(01:46:47):
It's not collections, it's notdelinquent, it's not some of
those bad terms, they'realternative terms that sound
much, much better.
But you have to work at the arc.
You know it's kind of like I'mnot a good golfer, but I
understand people that are.
You know you shoot 100 and theyget better and they're shooting

(01:47:09):
a 90 and now they're shootingan 85.
It gets tougher to improve yourgame, but you have to start
somewhere.
On a scale of relating it togolf, I was shooting a 150 my
first year.
Now my second year, I cut mygame down to 100 because I
learned from it.
And by my third year I wasshooting in the low 80s and 70s,

(01:47:33):
and by the fourth year I waspro.
So I think you've got toimprove.
Everybody can do somethingbetter today than they did
yesterday, but you do.
Goals are really, reallyimportant and I don't care who
you tell them to If they'reinternal, just write them down
somewhere.
What do you want to be when yougrow up?
Do you want to be running thatstore?

(01:47:54):
And that's fine.
I got people that I don't knowhow they do it.
I give them so much respectbecause when my three or four
years were done running thestore, I was in my brain, was
ready to move up.
But there are some people thatgot the mental capacity.
They don't necessarily makegood regional managers either,

(01:48:18):
but that's what they like to do.
They're good in the stores.
The worst case you can get iswhen you get promoted and you
get a briefcase and some peoplethink it's supposed to get
easier.
Uh-uh, you're not going to lastvery long in that new position.
You got put in this positionbecause now you've expanded your

(01:48:39):
horizon and you're responsiblefor the whole horizon.
So if you want to sit back andcome back and sit on a desk,
close the door and call yourgirlfriends or whoever, I can
tell you your deal is not goingto last a long time.
You know, somebody else isgoing to figure it out.
It's better to have one lessperson than one more person than

(01:49:01):
you should have.

Speaker 1 (01:49:02):
I can prove that Well , I think at Rent to Own it's
always been that way.
Yeah, I think at Rent to Own is, you know, if you had one more,
you just see things just notget done, and it was always
crazy like that.
But if you had one more, youjust see things just not get
done, and it was always crazylike that.
But if you had one short person, you'd imagine how much gets
done in that same time frame.
Or if you have a couple hoursovertime, or whatever the case
is, it doesn't amount to a fullposition and it never did.

Speaker 2 (01:49:24):
I said, if you give me a good driver and give me a
good, well, back in the day wehad a bookkeeper, I can run the
store.
Back in the day we had abookkeeper, I can run the store.
And the manager, trainees,assistant managers, whatever
sales manager, they're justextras, they're temporaries
anyway, because either they'regoing to get promoted or they're

(01:49:45):
going to be gone.
It's a temporary positionunless they want to be a
lifetime customer servicemanager, and I've seen people
that were great what we callthem cams.
They want to be a lifetimecustomer service manager and
I've seen people that were greatwhat we call them cams who were
terrible managers, just likeI've seen great managers become
terrible regionals, and so Irespect that and we'll certainly

(01:50:06):
have a place for you.
But at some point everybodycan't be permanent because
you're going to clog up mysystem to open stores.
I don't want to have too big ofa bench that people are
impatient, but I've got to havea bench ready as we grow that we
can grow with people in thestore, and you have to make
tough decisions sometimes.

Speaker 1 (01:50:25):
So going into the end of this, going into the last
leg.
For the people who have been inthis business a long time, for
the people who haven't been inthis business a long time, for
the people who haven't been inthis business a long time.
What is the state of the unionas far as rent-to-own goes right
now?
How do you see it in comparisonto what it's been and where do
you see it going?
Where are we headed right nowas an industry?
I think that's a great question.

Speaker 2 (01:50:47):
I think, yeah, god it's.

Speaker 1 (01:50:50):
the retailers have rent-to-own correct 90% of your
I was at Lowe's the other dayand they had a sheet.
I was with my wife and it saidhey, you can get a deep freezer,
you can get a washer and dryerset.
And I forgot what the other onewas.
It could have been a stove orwhatever the case is, but we
have these available to you forthese low rental rates or these
low monthly prices.
And it wasn't considered creditand I was like, oh my goodness,

(01:51:13):
no, it's crazy.

Speaker 2 (01:51:15):
Lowe's even has golf carts now.
So you've got big box retailersdoing what we do on a local
basis.
But what happens if the productbreaks?
Lowe's going to take care of it.
You're going to call Lowe's,you're going to call me or
you're going to call somecompany out of Lord only knows
where.
Right, some company out of Lordonly knows where.
So I see that as a problem, butI always like to think of

(01:51:39):
anything as an opportunity andnot a problem.
There's some things goodhappening.
There's some things that makecompetition a little higher, but
the big picture altogether,you've got to be on your game,
man.
You cannot afford to havecracks in your deal.
And so those managers and I seeit with the ones we have who
are on their game, dotting theireyes, crossing their t's,

(01:52:02):
running the store the way itshould be run and it's not
working 80 hours a week, I mean,come on, you don't have to do
that.
It's kind of like catching awave.
If you can get in front of thatwave and ride it, I will
outperform you working 45, 50hours a week than anything you
can do 80.
I know that I'm not talkingabout you.

Speaker 1 (01:52:23):
No, of course not.

Speaker 2 (01:52:23):
I'm talking about somebody beside the room.
I think you've got to really beon your game.
You can't look like a cheesyoperation.
You've got to do themaintenance things every day,
every morning, get ready forbusiness.
You've got to be on your gamewith this customer relationship.
There's no customerrelationship with a big box
retailer.
Once they sell it to you,you're never going to see them

(01:52:46):
again.
So you're dealing with somebodythat's probably just going to
email you all the time and goodluck trying to call them, so
it's not a place you can go backto to get more product.

(01:53:06):
Our stores should have what theywant when they need it and it's
today and they offer greatvalue.
It's not just about rentingthings when they're new.
It's that thing of making theused look good.
Otherwise your store looks likecrap.
If you've got nothing but used,that's telling me A you're
doing a poor job of recyclingyour inventory.
You might be picking upreturning too many customers.

(01:53:27):
That needs to be managed too.
We knew the formula on what astore should return each month.
If you were 500 customers, itwas X.
If it was 600, it was Y If wesaw somebody that was
overkilling.
That they're going too hard.

Speaker 1 (01:53:44):
Their collections are getting to be.
It's being run throughcollections and not necessarily
having the right conversationsand creating the right.
That's not good either.

Speaker 2 (01:53:52):
So all of a sudden, you're going backwards like a
freight train.
You don't even know it becauseyou can't do enough deliveries
to offset those returns.
So it's a mathematical equation.
You got to understand.
Understand the math.
Uh, you're, and and I wasalways even back in the day
you'd laugh at and I just had astore.
I did my own frigging grass.

(01:54:13):
I knew my numbers like the backafter I realized what the
numbers were.
But it was a key performanceindicator.
They call it key.
I don't know.
There's an acronym for it.
I don't even know what the hellit is.

Speaker 1 (01:54:26):
It depends on what company, but they're all the
same, right KPIs yeah.

Speaker 2 (01:54:29):
Is that what they get ?
I don't even call them KPIs,but key things to make my
business successful and I knewthose numbers like the back of
my hand.
It's crazy.
I was in this room meeting withall our buddies, managers, and
I was talking about owning yournumbers and I said okay, you see
them come out.
I remember things by writingthem down and I'll go back in

(01:54:53):
history at aaron's from thefirst day we started.
I put the revenue, how manystores, what was our profit?
And month.
I put april, late 1987, may 19,and so I I studied that I had a
map in the United States that Iput a pin every time we opened

(01:55:14):
the store.
I mean I was looking for abigger pin for a distribution
center.
It's all a master.
It was a master plan that Ididn't even know I was doing.
I was just doing it every day.
But when I left I've got thewhole history wrapped up in that
sum of what we did every singlemonth.

(01:55:36):
I used to laugh at our CFO.
I said so how much revenue didwe do in 1991?
What was profit?
Oh, I don't know.
I said see this yellow piece ofpaper.
How about 1994?
Can you pull it out of yourcomputer that quick.
No, I took ownership to mynumbers and so if you're going

(01:55:56):
to make numbers, you've got toknow what your numbers are.
But, more importantly, you'vegot to know what you're beating
from last year, Because we'remeasured on our success.
If we're just in there fighting, doing the best we can do, but
I don't know what I've got tobeat, Then how are you going to
win the game?
So as I became a regional, thehistory became really important

(01:56:19):
because I could look at months.
I had dips in revenue right.
So July everybody had a toughtime in July.
I'd go look and say, well damn,we lost 20 customers last July.
What about if we break even?
That's like gaining 20customers.
So that would be our goal.
A lot of people, they're likerobots and no, no, no, you've

(01:56:41):
got to gain 20.
Well, you can't do that everymonth.
That's not even realistic.
Maybe even a loss of five thismonth is realistic If you can
just lose five and not 20,.
I just gained 15 customers overthe previous year.

Speaker 1 (01:56:55):
And your year over year is going to be better,
because now those 15 are payingyou through July, august,
september, right?
So the game is every month.

Speaker 2 (01:57:03):
But if you have a good day you might have a good
week.
You have a good week, you haveanother good week.
You have a good month week.
You have a good week.
You have another good week, youhave a good month.
And so the game is calculateddaily.
Did you win today?
Did you play the game today ordid you give up because you had
five payouts come in the doorthis morning?
So what it's not over with.
We know what we got to make up.

(01:57:25):
How many of those did we convertback to a customer?
Are we going to?
I know we talked to them.
You're going to call them nextweek.
I mean, you've got theinformation to generate business
in your store.
Let's say you've got 400customers.
How many personal references doyou have on those cards?
Some people have five, somecompanies do three, some may do

(01:57:48):
two, whatever it is, but you'vegot more references than you've
got customers double and triple.
And if you get one referral in,you know you contact Joni.
Is it okay if I call you buddy?
I'll give them a discount andget you a discount.
We do all have friend referralprograms.
How much do we use that in thefuture?

(01:58:10):
So you know the manager of thestore is the straw that stirs
the drink.
The manager in the storecontrols the temperature in the
store.
The manager in the storecontrols the attitude of the
people in the store.
The people in the store controlthe attitude of the customer

(01:58:32):
walking in the store.
90%, 90% of what we do isattitude.
It goes back to my attitude.
It happened to me when I was inhigh school.
It's a belief that I can do it.
It's knowing I can do it.
And so what have youaccomplished in your life?
If it's just one thing, that'sgreat.
Hang on it.
Let's go baby.
But you got to have thatattitude every single day.

(01:58:55):
It's a lot.
That's where you get the fun at.
If I'm happy, you're happy,customers are happy.
Guess what?
We're winning?

Speaker 1 (01:59:01):
We're winning, we're winning, we're winning.
And you know, it's just been agreat conversation to really
kind of talk about the things,the people that have helped you
get there, the mindset that ittakes.
You know to be always evolving.
Don't let something stop you Ifsomebody says no or can't.
Don't allow that.
Define the it.
You know, have fun at work butmake sure that it's competitive

(01:59:22):
and on edge.
You know, making sure that wenever forget about the
relationship, always beinnovating, you know, and make
sure that at the end of the daywe have something to come home
to.
We didn't do everything at workand then leave it all at work
and then we, you know, you haveto have something at home to
come home to and kind ofseparate those things and then
that way you can put your allinto your every day to day and

(01:59:44):
make sure that you're doing thebest that you can.
You know, knowing your numbersand knowing where they come from
, owning those numbers and beingable to say you know what.
This is what made that.
Maybe it wasn't a great daytoday, but we'll make it a great
day tomorrow, learning from ourmistakes and kind of pushing
forward, all these things thatyou talk about.
It just reminds me a lot ofwhat I've learned in the last 20

(02:00:05):
or so years and how thesethings have gone Never quit
learning.

Speaker 2 (02:00:08):
I heard something on the radio this morning that I
thought kind of hit me at home.
I listen to sports talk radio.
I'm into sports, I do lovesports, and one of the guys
who's on the evening show had amassive heart attack.
Oh no, he had the widow killerand he was in surgery yesterday.

(02:00:28):
It's a pretty humblingexperience.
He's going to survive.
But they were talking about wow, he just missed it.
But he said I've never heardanybody on their deathbed talk
about I wish I worked more or Iwish I made more.

(02:00:48):
So think about that in yourlife.
I know we get consumed by itsometimes, but at the end of the
game it comes down to yourfamily, doesn't it?
Absolutely Well.

Speaker 1 (02:00:54):
I tell you what I'm a little bit more of a game.
It comes down to your family,doesn't it?
Absolutely.
Well, I tell you what I'm alittle bit more of a podcast guy
when I listen to things, but Ithink all the messages are the
same.
My wife is here with me todayand it's one of those humbling
experiences that we get to betogether through some of these
things, because you're rightwhen it comes down to the end of
it.
I don't think anybody's goingto say I should have worked 75
hours.

Speaker 2 (02:01:11):
I only worked 40 hours, 45 hours, I should have
made it 80.
I should have made it more.

Speaker 1 (02:01:17):
I should have done this more and I think you go to.
I should have been home more.
I should have seen my familymore.
I should have involved themmore.
I should have been moreinvolved in what they were doing
, and those things really matter.

Speaker 2 (02:01:28):
I always found a way to do that and I even coached my
daughter's softball, my son'sfootball teams.
But as you moved up the ladderI could dictate my work schedule
.
And so even today, you know,I've got grandsons and daughters
all in activities.
But I plan ahead, I keep acalendar and I know when they're

(02:01:49):
playing and I tell X that, heylook, I'm leaving this one day
at 4 o'clock and I leave thatday.
The store's going to be fine,it's going to be all right, it's
going to be okay.
It doesn't have to have methere every minute.

Speaker 1 (02:02:02):
So as we come into the end, any last words of
wisdom you would give somebodywho's hearing this.
Let's say, I'm checking out theRTO Show podcast for the first
time I've been in rent to ownjust a little bit.
If there's anything that I'mgoing to take out of everything
that we've said in these lastcouple hours, what would you say
that would be?

Speaker 2 (02:02:21):
Don't miss this.
I said there ain't one thing.
I wish it was that simple and Ican't tell you.
There's one thing I mean justtake control of your destiny.
You're in control.
If you're in the industry, Idon't care if you're a CSR.

(02:02:46):
Whatever job you have, you areresponsible.
You can take control, you canset goals and you can become
anything you set your mind tobecome.
Become anything you set yourmind to become.
Most importantly, really, it'snot going to happen overnight.
When I was young, I did havegoals as a manager.
I knew I could be a regional,but it didn't bother me when I
didn't get the call.
And let me tell you why.

(02:03:07):
That's one less person I had tocompete with.
If I didn't get the call thistime, okay, I don't have to
worry about that person nexttime.

Speaker 1 (02:03:19):
And I always looked at my career when I was in the
20s and 30s I'm planning on.

Speaker 2 (02:03:21):
I like working, I mean I really do.
When you said retire, I'm nevergoing to retire, I'm going to
slide into my grave, because Ireally enjoy getting up and
having something meaningful todo every day.
So I looked at my career at 25years old.
I got 45, 50 more years.
Why am I going to get bent outof shape if something happens
now?
And it wasn't always golden.

(02:03:43):
There were lots of crossroadsthat happened for me.
I was not undefeated.
I got knocked down.
I skinned my knees up, but Igot back up every time.
I learned from it, knew what Iwasn.
I got knocked down.
I skinned my knees up, but Igot back up every time.
I learned from it, knew what Iwasn't going to do the next time
.
You're going to have losses here.
If you don't have any losses,you're not taking any risks to
begin with, right.
But I guess the most importantthing with all that being said

(02:04:09):
because there are some secretsis don't lie, don't steal, don't
cheat, and I think those arevery, very important.
And I've seen it done a lot inour industry fabricating numbers
that aren't real numbers.
You're going to get caught.
You don't think your boss knowsevery trick in the book.
Believe me, I could tell yousome stories.

(02:04:30):
I know all the tricks.
And so don't just if you had abad day, it's a bad day, it's
okay.
You don't have to hold fivereturns because you want to make
sure it shows that you gainedtwo when you really didn't.
You're just, you're not.
You're not presenting what itis.
We can't help you if you don'tcome clean with what numbers
you're doing.
So it's not the end of comeclean with what numbers you're

(02:04:53):
doing.
It's not the end of the world.
When you're a manager out there,you think sometimes this
situation only happened to me.
Why is it always me?
You don't think that allhappened to every one of us.
Are you kidding me?
They're in a situation.
Well, I guess there's always anew one.
But that's what managers haveregional managers for is to get

(02:05:18):
help.
So if you don't know how tohandle a situation, it's okay to
pick up the phone.
Yes, that's why you have aregional manager.
He's been there, done that.
He's done a lot more thansituational awareness and what
you're going through.
We can help you through thesedeals.
Don't try to brush them underthe rug, though.
That just don't work, and weall don't like surprises anyway.

Speaker 1 (02:05:41):
Oh, I tell the guys all the time, just call me, I do
not want to find out any otherway, right?
Doesn't make you a bad person.

Speaker 2 (02:05:50):
We've all been there, we have.
I've gone home at night'm going, because you take things
personal sometimes it's not theend of the world, but we'll
figure it out, we'll moveforward.
And that's keep knocking baby,keep hitting that rock.
We're going to get throughabsolutely well, guys.

Speaker 1 (02:06:07):
We appreciate you sticking out this long.
I've had nothing but a greatconversation with ken.
I'm so glad that he's here.
The number one legends thatwe're going to have on the
podcast, but not the only one.
If you guys want more, pleasefeel free to subscribe.
We are on Facebook, instagram,linkedin and YouTube.
You're going to see us there.
Don't forget to subscribe toYouTube If you want to call the

(02:06:27):
show.
If you want to reach out to us,don't forget it's Pete Pete at
TheRTOShowPodcastcom.
If you have anything for me orKen, please feel free to reach
out.
That's the best way to get adirect line.
I will reach out.
You guys have enough.
We might even do a part twojust to make sure that we get
everything answered.
We do appreciate you taking outyour time.
We love being with you, ken.
It's been an absolute pleasure.

Speaker 2 (02:06:47):
Wish I could see who all is on the list.

Speaker 1 (02:06:51):
Well, I tell you what .
We'll revisit that soon so thatyou know Again.
If you guys need anything,please reach out.
But I will tell you, as always,keep your reflections low to
get your sales high.
Have a great one.

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