Progressive Rentals October-November 2005

Katrina and the Wave of Support from the RTO Industry by Shellie Faught
Why People Don't Rent, Part II: Perceptions and Fears by Ed Winn III
Tough Talk: How to Handle the Most Stressful Workplace Problems by Phillip M. Perry
Keeping Up with Jones: An APROfile of Lyle Jones by Kristen Card

Katrina and the Wave of Support from the RTO Industry
by Shellie Faught

On Monday, August 29, Larry Goad watched as news bulletins reported that a Category 4 hurricane named Katrina had made landfall along the central Gulf Coast. Two days later, the president of Tennessee’s Zion’s Rental-Purchase was on the road to Baton Rouge, Louisiana. Goad, an APRO board member, drove more than 750 miles through gas shortages, traffic jams and hurricane ravaged territory to serve in the Tennessee unit of the Southern Baptist Disaster Relief (SBDR) team. He spent eight days in Louisiana, helping the Red Cross’ mass feeding mission run smoothly. An all-volunteer organization, the SBDR sends help into disaster areas to perform behind-the-scenes tasks such as cleaning up, rebuilding, child care and mass feeding. Goad was called up by Tennessee’s statewide unit of the SBDR and spent much of his time in Louisiana unloading, organizing and inventorying up to seven tractor trailers full of food per day.

The food that Goad organized was used by the mass feeding crew to prepare meals for evacuees. In the aftermath of Katrina, the mass feeding crew in Baton Rouge prepared and distributed as many as 30,000 meals a day. In his two years of volunteer service, Goad has served on crews that assisted with disaster relief in Florida. However, he says, witnessing the aftermath of Hurricanes Ivan and Francis did little to prepare him for the devastation caused by Hurricane Katrina. “I’ve been on several relief crews before,” says Goad. “I know what the experience is like, but the damage done by Katrina was so big and so widespread, it was unbelievable.” “UNBELIEVABLE” was the most common expression used by newscasters and reporters to describe the destruction in the Gulf Coast. Hurricane Katrina originally made headlines as a small, Category 1 hurricane, when it made landfall just north of Miami, Florida, on August 25.

Four days later, it landed near New Orleans, Louisiana, as a Category 4 storm.Within hours, Katrina’s storm surge had breached the levee system that protected the city from Lake Pontchartrain and New Orleans flooded. In the days following, Federal Disaster Area declarations blanketed approximately 90,000 square miles of Alabama, Louisiana and Mississippi. Damages were estimated to be higher than $200 billion. An estimated five million people were believed to be without electricity in the sweltering Gulf Coast heat. More than one million people were displaced, causing a humanitarian crisis on a scale unseen in the United States since the Great Depression.

On September 3, U.S. Homeland Security Secretary Michael Chertoff described the aftermath as “probably the worst catastrophe, or set of catastrophes” in the country’s history. As the rest of the nation watched the news stories roll in, another member of the rent-to-own industry was also on the front lines, performing clean-up operations for the recovery of the Gulf Coast. Terry Beville, APRO treasurer and vice president and CFO of Florida’s Buddy’s Home Furnishings, traveled to Mississippi to serve on a clean-up crew with the SBDR. He and his crew donated their time and their labor to help residents haul off downed trees and other hurricane debris. “We supplied basic labor to get stuff cleaned up and get life back into some semblance of order for them,” says Beville. Across the nation, RTO professionals took up the call to help those affected by Hurricane Katrina with any means possible. In Tulsa, Oklahoma, Stanley’s Rent To Own partnered with a local church to collect and deliver supplies to evacuees in Baton Rouge.

Together, Stanley’s Rent To Own and the Church at Claremore collected diapers, personal items, clothing, canned goods and bottled water that would be delivered to the World Faith Christian Center where more than 600 evacuees were housed and cared for, according to Craig Stanley, owner of Stanley’s Rent To Own. Stanley’s took at least one of its 14-foot box trucks to Baton Rouge on September 25. “The outpouring of support has been tremendous,” says Stanley. “Everyone has come together for a common goal, to help the individuals and the families that have lost so much.” RENT-TO-OWN FAMILIES HELPING FAMILIES OF RENT-TO-OWN Buzz’s Rental-Purchase was just two weeks away from opening their sixth store in Mississippi when Hurricane Katrina blew in and damaged four of the company’s six stores beyond repair. Of the Buzz’s stores across Louisiana,Mississippi and Texas, three were in New Orleans proper. Not having been affected by a hurricane of Katrina’s caliber before, William “Buzz” McRae, president of Buzz’s Rental-Purchase, turned to APRO for help. “I figured I could get the best information from people who were experiencing or had experienced an event like that,” says McRae. “I thought about who connected us all and then I called APRO.”

That phone call sparked a whirlwind of disaster relief efforts around the rent-to-own industry. A hotline was established and daily conference calls were arranged for those who had the ability to call in. These calls helped answer questions for business owners whose stores and employees had been affected by the storm. APRO members who have experienced hurricanes or disaster relief before also contributed to information concerning banking, road closures, small business recovery and other disaster-related tips. These resources were posted on the APROVision Web site and are available for review. “Through the phone calls I gathered enough information to determine what I needed to be working on,” says McRae. “I found them helpful from the informational and emotional standpoint. I wasn’t alone in dealing with this. I had shoulders to lean on.”

Moved by seeing the devastation fellow dealers were faced with, the APRO board of directors established the RTO Employee Disaster Relief Fund to provide temporary assistance to the employees of APRO members who suffered the loss of their income due to the hurricane and its aftermath. Shortly after the fund was announced, pledges and contributions began streaming in from RTO employees that were determined to help other RTO employees. The employees of Florida-based Buddy’s Home Furnishings decided to donate funds earmarked for their annual Christmas party to employees who might be jobless. The vote was almost unanimous among employees. Some of Buddy’s employees also volunteered to take an additional payroll deduction. Illinois’ Rent One and Imagery Marketing Consultants implemented a program of matching employees’ contributions with two dollars for every one dollar its employees earned for the next six pay periods.

Larry Carrico, president of Rent One and an APRO board member, reported that 20 percent of the company’s employees pledged more than $9,400. In the wake of the tragedy, rental dealers found innovative ways to encourage participation among customers and employees alike. Countryside Rentals in Ohio donated two dollars for every delivery made through September. Mike Tissot, vice president of Countryside Rentals, personally matched all contributions made by his employees. In addition to implementing an optional payroll deduction, National TV Sales and Rental, based in Missouri, added the donation effort to its ongoing football advertising promotion. The stores sold paper footballs for one dollar.

The footballs were then signed and displayed in the store. The stores placed water jugs at the counter to collect loose change for hurricane victims. Many dealers opted to donate a certain amount per store. Rent-n-Roll’s president, Larry Sutton, made a $2,000-per-store contribution for each of his four Florida-based stores, plus $2,000 for a new store. Dick Eichlin of Virginia- based STAR Rentals and Geron Vail of Arkansas’ Pearson Vail also contributed $100 per store. Indiana’s Full-O-Pep Appliances donated $100 per store and the company pledged one dollar for every delivery it makes from September through November. The company also solicited contributions from customers in each of its stores. State rental dealer associations across the nation rallied to the cause and sent contributions on behalf of their membership. The Florida Rental Dealers Association and the Ohio Rental Dealers Association each made $10,000 donations to the RTO Employee Disaster Relief Fund.

The Missouri Rental Dealers Association and the Texas Association of Rental Agencies contributed $5,000 each. At press time, the APRO RTO Employee Disaster Relief Fund had received $106,204 in donations with another $61,070 pledged by members of the RTO industry. Ten percent of the fund was donated to the American Red Cross. The first wave of support was sent out to 89 affected employees on September 8—within only 33 hours of the initial call for support. Some of those recipients included employees of Buzz’s Rental- Purchase. Twenty of the store’s employees were affected and 17 of those employees received assistance from the APRO fund.“Most of our hourly employees had very limited resources in the aftermath,” says McRae. “[The APRO RTO fund] provided them the seed money they needed to get their basic necessities taken care of and get back on their feet.” KATRINA HELP SPANS THE RTO INDUSTRY Moved by the devastation wrought by Hurricane Katrina, the rent-to-own industry joined the effort to provide relief to the thousands of people left homeless. Below are just a few of the contributions made by those in the rent-to-own industry.

Aaron Rents donated $200,000 from the Aaron’s Community Outreach Program to aid employees and their families in affected areas. Aaron’s franchises across the nation pledged to put displaced RTO employees to work. Employees of the RTO industry were able to find work at any Aaron’s in the United States, regardless of whether they were employees of the company prior to the storm. Other Aarons franchises established a payroll deduction program for employees to donate to the relief effort. General Electric provided cash, equipment and services to help address immediate needs and begin the recovery from Hurricane Katrina. GE employees gave more than $1.5 million to the American Red Cross, which the GE Foundation matched. GE provided another $6 million in cash to the Red Cross and at least $10 million in equipment for recovery efforts. Sealy made a commitment of $1 million and product donations to the American Red Cross to support the disaster relief efforts.

Therapedic International partnered with RentWay to ship three truckloads of bedding into RentWay storage facilities for distribution at a severely discounted price. In addition, Softex donated 1,000 pillows. According to Tony Craig, RentWay communications supervisor, RentWay has had a fund to assist employees in times of need for several years. In the wake of the hurricane, contributions to bolster the fund came in from all areas of the company. RentWay also established a 24-hour hotline to assist dislocated employees. “Our first priority was to locate every employee, and then make sure each has money and a place to stay,” says Craig. Michelle Sutton, wife of APRO board member and Louisiana RTO dealer Wayne Sutton, testified before the Senate Small Business and Entrepreneurship Committee on September 22, urging Congress to cut the red tape and supply assistance to businesses affected by Hurricane Katrina more efficiently.

Sutton is a longtime community activist in Louisiana where she has served as president of the state’s Economic Development Board. The Suttons have also been involved in lobbying Congress for RTO legislation for many years. Signs of recovery from Hurricane Katrina have slowly spread through the Gulf Coast. Some rent-to-own stores have reopened or are in the process of reopening while others are still waiting to see what will happen next. In the midst of the uncertainty and the devastation, the rent-to-own industry has proven its willingness to help in times of a crisis. “It’s great to be a part of an industry that has the foresight and the compassion to assist its neighbors in times like these,” says Shannon Strunk, APRO’s president.Whether by cooking a meal or clearing off a yard, organizing a supply drive or sending a few extra dollars, rental dealers were quick to act when they heard the call for help.

Why People Don't Rent, Part II: Perceptions and Fears
by Ed Winn III

The information for these articles was culled from a seminar conducted by APRO board member and Michigan rental dealer Sydney Burton.

He, in turn, got much of his information from reviewing tapes of focus groups that were a part of the Trenholm Research’s 2004 Image Research for the Rent-to-Own Industry: Telephone Survey and Focus Groups. The unedited DVDs of the focus groups are available to APRO members upon request. Last issue’s article dealt primarily with pricing policies in rental stores as a reason for people choosing not to rent. This article will look at the other factors mentioned by participants in the focus groups. Rental dealers may want to kill the messenger because the things that non-RTO customers say about the business are not flattering. Their perceptions of the rent-to-own industry will cut to the heart of the life’s work of some rental dealers.

The information in this article will hurt some feelings. Therefore, before pondering these disparaging perceptions, it may be useful to remember that politicians endure a fair amount of criticism, and they suffer it very publicly, on the front pages of newspapers and on the six o’clock news—some of them nearly every day. Politicians are winning when only 49 percent of the people hate them and what they stand for, because that means that a majority of the people agrees with them. If RTO dealers could reach those levels of percentages, the business would be eight times bigger than it is. If that kind of progress is unlikely, rental dealers can take some solace from the fact that the negative impressions that many people have about RTO are, for the most part, only rarely shared on the six o’clock news. The damage done by the misperceptions of non-RTO customers rarely affects more than rental dealers’ profits, which ought to be reason enough to read on, however painful the process.

The primary reason that people don’t rent is that they are afraid to. They are afraid of RTO at every turn. RTO advertising frightens them. It is too aggressive. It tries too hard. Anyone who pushes that hard must be hiding something. RTO advertising shouts weekly rates. No other business in the world advertises weekly rates (maybe a few flea bag hotels/motels advertise weekly rates on their marquees). RTO customers may be used to weekly-rate advertising, but to non-RTO customers, the practice seems sneaky. Advertising and word of mouth are the only two ways that non-RTO customers learn about RTO. RTO advertising is scaring people away from RTO stores. That’s a bad start. Non-RTO customers are afraid of the product. To most non-customers, RTO means “used.” That makes people wonder, “Who has had it before?”“How used is it?” The industry could address this fear by disclosing more information about used product. Dealers could disclose the history and condition of used product better. The industry could do a better job of explaining the difference between new and used. RTO store displays could ensure that the used items are clearly, boldly and honestly marked so that it does not look like the dealer is trying to pass off the used product as new.

Rental dealers know that there are some tremendous bargains in used merchandise. The used furniture market is thriving and consumers regularly shop consignment stores and other retailers of used merchandise looking for bargains. The RTO industry has what a lot of these people are looking for and the industry could broaden its customer base by focusing more on those bargain-conscious retail shoppers. The RTO industry probably has more used merchandise than any other retail segment, but all RTO seems to know how to do is to trumpet its low weekly rates from the rooftops. That kind of advertising is not going to attract these bargain shoppers, who, if they knew, could come into RTO stores, pick off the used bargains and allow RTO dealers to rent more new product to their rental customers. Non-RTO customers have another furniture fear. They think that RTO stores only carry low-end merchandise, even the new stuff. They think that RTO stores have nothing but promotional items and that they cannot get the same merchandise in an RTO store as in a Best Buy or Circuit City, or even Wal-Mart or Target. Rent-to-own stores are carrying better merchandise than they once did, but non-RTO customers don’t know this, and they are staying away from RTO stores because of a mistaken, persistent and widespread impression about the quality of RTO merchandise.

The responsibility for correcting the impression falls on rental dealers. Better advertising that focuses on the quality of the merchandise rather than the low weekly rates might help. Non-RTO customers are afraid of the rent-to-own transaction. Incredibly, too many people, maybe even most people, still do not understand how RTO works. The non-customers in the focus groups did not understand “no obligation.” They thought it meant that a customer could return a product within the first couple of weeks, but after that, they were obligated to keep and pay it off. That is because an RTO deal is not an intuitive transaction to those who have never made one. It is unique in the marketplace and the industry still has a ways to go before achieving a level of understanding by the American public that will overcome the mistaken preconceptions that exist.

Dealers cannot stand on street corners explaining RTO to passers-by. Rent-to-own dealers can, first of all, make sure that every employee understands the business that he or she is in, and then dealers can make sure that every shopper in the store who will listen has the RTO transaction explained as slowly and as patiently and for as many times as it takes so that every single person who enters an RTO doorstep understands the fundamental features of RTO. The non-RTO customers in the focus groups simply did not believe the moderator when she told them that in an RTO store a customer could return the merchandise at any time without any penalty. They were persuaded that it would cost money to return a rented item—that there were hidden charges that the store was not telling them about.

If non-RTO customers do not understand the no-obligation feature of RTO, it is no surprise that they do not understand the value of an RTO transaction and therefore think that RTO prices are way too high. Non-RTO customers are afraid of RTO employees. They think that they are paid on commission and will act accordingly. They think that the RTO staff will push used merchandise on them at high prices and then will not stand behind the merchandise when it breaks down. And it will break down, they are sure, because it was used and shoddy to begin with. Then the RTO staff will lie in wait and repossess the merchandise at the first chance they get, ruin customers’ credit, then rent the product out again and repeat the villainous cycle. Finally, because of the fears, because of the advertising, because of the lack of understanding of the transaction, because of the perception of RTO merchandise, there remains a social stigma attached to RTO.

The RTO demographic makes up somewhere between 33 percent and 40 percent of the United States population—people whose financial circumstances make them candidates for RTO. These millions of people will find themselves “credit constrained” at some point in their lives—not for all of their lives and maybe not for long, but for some period of months or years. During this time, they may avail themselves of any number of sub-prime financial services: a small loan, a payday advance, a pawn transaction, a used car from a tote-the-note lot. But customers can keep all of these transactions confidential if they want to. In every case, the business is conducted at the merchant’s store. RTO is the only industry in the sub-prime sector that will drive a big truck to the customer’s house proclaiming to the neighborhood that the customer is making an RTO transaction. Some of the non-RTO customers in the focus groups said that they would not do business with RTO because they did not want an RTO truck parked in front of their house.

That made some dealers in the seminar wonder about having one unmarked truck in the fleet. But the stigma goes beyond RTO trucks parked out front. Non-RTO customers said that they would not want to give out personal references on a rental application and have those family members, friends and neighbors know that they were having to purchase products through RTO. For many non- RTO customers, their necessitous financial circumstances were an embarrassment to them and they did not want the information publicized. For them, RTO is something that is done only by people who are down on their luck. The truth is that RTO could be a useful service for a lot of people who are temporarily in that situation. That message can be delivered persuasively only by RTO stores that establish deep roots in their communities and make it known and believed that the store wants to help people, not just take advantage by renting shoddy televisions to poor people at high prices. It is not a pretty picture, the image non-RTO customers have of RTO.

Some dealers will conclude that the problem is systemic and that RTO cannot be other than what it is, that it must shout weekly rates and it must offer inexpensive merchandise to keep those weekly rates low enough to shout about. And that the industry finally must content itself with the customers it has and that non-customers are just that—non-customers, now and forever. Others will resist such complacency. They will listen creatively to what non-customers are saying, even though the words wound. They will tweak this business practice or that one and innovate to see if they can cast a broader RTO net. Some companies are already doing this with some success. Overall improvement will not require the efforts of every rental dealer. Some dealers can stay where they are. The bold, inventive dealers will grab a bigger market share and move forward. Even a few dealers moving forward will increase the business and make RTO look better to everyone.

Tough Talk: How to Handle the Most Stressful Workplace Problems
by Phillip M. Perry

Successful managers are great handlers of stress. Even the best of breed, though, run into the occasional workplace challenge that creates more than the usual level of heartburn. How good are you at handling things when the going gets tough? To find out, imagine how you would respond to the three workplace challenges described in this article. Then see what workplace psychologists say about each. CHALLENGE: JOE, ONE OF YOUR SALES PEOPLE, IS DRIVING AWAY CUSTOMERS BECAUSE OF HIS BAD BREATH. SOLUTION: Talk about awkward situations! Few are as difficult as the need to discuss personal hygiene. For the moment, picture yourself in Joe’s shoes.Wouldn’t you take offense if your supervisor brought up this topic? Awkward or not, this situation is one you’ll need to deal with at some point in your career. Letting things slide won’t do. An employee’s bad breath can impact sales and cost your business real money.

So how can you approach Joe without creating undue anger? For an answer, we turned to Leil Lowndes, a New York-based communications expert and speaker. “It’s always difficult to bring up a topic that can cause embarrassment to your employee,” says Lowndes. “But you absolutely have to take action quickly.After all, anyone who deals with the public must have immaculate personal hygiene.” For starters, Lowndes suggests selecting your venue carefully. The office setting typically employed for personnel discussions provides the requisite privacy, but may be too formal. “You may want to discuss this matter in a more casual setting such as a business lunch,” suggests Lowndes. “Discussing other matters over good food can help break the ice.” A lunch-time conversation that revolves around how the employee can further improve his or her performance can naturally be extended to a matter that affects how the employee interacts with customers. Approach the luncheon with the right attitude. “Stifle your own embarrassment by reminding yourself that you need to have this conversation for the good of your employee and your organization,” offers Lowndes. Stay in control of yourself and think of the conversation as a tool for increasing communication skills. Now, just how to bring up the topic?

Lowndes suggests waiting until lunch is over, then casually breaking out a roll of mints you’ve secured for the occasion. Take one for yourself, then show the roll to your companion and offer to share: “I always take one of these to keep my breath fresh. Would you like one?” The opening line avoids a direct confrontation while allowing your companion to pick up your subtle hint. In the best of situations, Joe will respond in the affirmative and ask if you had noticed his breath. This would provide your opening for a more direct discussion of how such a condition can affect his interaction with customers, and thus his career. Come prepared, however, for an unpleasant alternative. Joe may refuse your offer and even take offense, responding with words such as these: “Really! Are you suggesting that I have a problem with my breath or something?”

Lowndes cautions against making any sign of embarrassment or regret. Rather, immediately make your communication a little more direct. “We all need to watch out for ourselves,” says Lowndes. “Even more so in our situation where we work in such close quarters and meet so many customers.We really need to make a good impression on them all.” By this time, Joe will have gotten the point, although he may be so embarrassed and angry that he expressed himself in a confrontational way. Allow him to let off steam. For your part, avoid responding in kind to any harsh words. Continue to emphasize that you are discussion the topic for Joe’s own good, because a continued personal hygiene problem will affect his career.

CHALLENGE: SHARON, A CUSTOMER, IS ON THE PHONE COMPLAINING ABOUT RUDE BEHAVIOR ON THE PART OF ANDY, ONE OF YOUR EMPLOYEES. SOLUTION: Rudeness in an employee is inexcusable and we can all understand why Sharon is upset. Empathizing with Sharon, though, is not the same thing as dealing with her anger in a productive manner. In fact, expressing sympathy with a bromide such as, “I understand how you feel,” may increase her anger level. The reason for this is that Sharon really wants evidence that you value her as a customer in the form of constructive action on her behalf. Judith C. Tingley, a psychologist and president of Performance Improvement Pros in Phoenix, suggests moving right away to resolve any transaction that has been left hanging. “Go immediately to the subject of whether Sharon’s initial problem was taken care of,” she suggests. “You might say this: ‘I will be happy to talk with you about Andy, but my main concern to you right now is the problem that you had asked Andy’s help with.Was it solved?’ “If the problem has been left hanging, try to solve it right there on the phone,” suggests Tingley. Can’t do that? Then say something like this, “Let me get this problem taken care of first and then I will call you back and let you know what happened. T

hen we can talk further.” At this point Sharon is already starting to feel better because you are taking physical steps in her behalf.When you call back to report what you have, chances are, Sharon will be far less angry and may well be flattered that you are going out of your way to serve her. At this point, Tingley suggests following up with a statement such as this: “Is there something else that you would like me to do relative to Andy’s conversation with you?” Sharon may say, “No, as long as the problem is taken care of, I am okay, but it still seems to me that such conduct by your employee is bad for your reputation.” You want to respond in a way that avoids accentuating the conflict with Andy while assuring Sharon you will take action to improve your staff ’s performance. So avoid saying that you will “talk with Andy about this.” Instead, agree that your customer’s interpretation is valid: “Such conduct is not the image we want to present to our customers. I cannot assure you something similar will never happen again, but we will try to work harder at our training.” Finally, conclude by making sure there are no issues left hanging that might cause Sharon to harbor bad feelings about your business. Express this concern in words such as these: “Is there anything more that you’d like me to do?”

If Sharon still feels angry she may say, “Yeah, I would like you to talk with Andy about what happened.” Then, by all means, respond in the affirmative: “I certainly will do so. I want to make sure all of our customers are treated well.” Here you have communicated the fact that you will reinforce your business policies with Andy without making any statement that escalates the argument. CHALLENGE: SANDRA, ONE OF YOUR SALES PEOPLE, HAS HAD THREE POOR PERFORMANCE REVIEWS AND YOU MUST TERMINATE HER. SOLUTION: Letting someone go is stressful for both parties involved. For advice on how to conduct a termination we turned to Jeffery P. Kahn, M.D., a Manhattan psychiatrist and chief executive officer of WorkPsych Associates, a consulting firm specializing in organizational behavior and employee productivity. “The key to handling this situation is to be aware of what Sandra might be feeling and also what you might be feeling,” says Kahn. Get a grip on emotions that will help you be more sympathetic and professional.

That, in turn, can help to obviate any hard feelings in Sandra that may cause her to get back at your company through sabotage, lawsuit or just plain badmouthing. Easier said than done? Maybe. Here’s some help. Kahn suggests starting out by spending some time answering this question: “If I were Sandra and I were let go, how would I feel?” The idea here is not to read Sandra’s mind—indeed, Sandra’s emotions may be far different from what you expect. Rather, the goal is to better understand your own feelings, for they may reflect what you anticipate from Sandra. In turn, getting a firm handle on your own emotions will help you avoid saying the wrong thing in the forthcoming meeting. Here’s an example: if you’d feel angry about termination, then you may go into the meeting expecting to meet an angry Sandra as well.You may therefore conduct yourself in a confrontational way that benefits neither your employees nor your company. “You don’t want to end up saying in some words or other that Sandra is a bad person,” says Kahn. “She almost certainly is not; she is just someone who did not perform to policy standards.” On the other hand, suppose you’d be afraid in such a meeting. You may well expect the same fear from Sandra and therefore express yourself in a hesitant manner.

That’s not good either. Once you’ve understood your emotions, you will be better able to control your reactions to them and stay on point during the meeting. What’s a good way to break the ice once the meeting starts? “Odds are Sandra knows something might be up even before she reaches your office,” says Kahn. “ So in many cases the easiest way to conduct the meeting is to ask a question rather than make an announcement.” You might start by asking her if she has thought about why you are meeting. Sandra is likely to respond in this way: “Well, I am afraid you are going to let me go.” Then you can sympathetically agree with her: “Yes, unfortunately that is what this meeting is about.” Of course, Sandra either may not suspect a termination is planned or may not acknowledge it. In that case move on: “We are here to talk about your future with the company.” That eases into the subject while avoiding a sudden announcement that may be too much of a shock.

At this point, you can cite the results of Sandra’s last three performance reviews as evidence for the unavoidable conclusion that it is time for her to leave the company. Don’t forget to remind her of any severance benefits, and to offer whatever help or support you can. Getting in touch with your feelings, as we have seen, will help you conduct your meeting in a professional manner. “Some people have said that emotional abilities are better predictors of business success than intellectual abilities,” says Kahn. “A termination meeting is an especially good example of when that can be true.

Keeping Up with Jones: An APROfile of Lyle Jones
by Kristen Card

Lyle Jones has been thinking a lot about his professional legacy lately. With retirement beckoning from just around the corner, 62-year-old Jones— president of rent-to-own software leader High Touch (www.hightouchinc.com) for the past 15 years—is quite realistic about the transition he’s about to undertake, from over-scheduled executive to too-much-time-on-his-hands retiree. But this Kansas native is all about dealing with what’s real. His down-to-earth upbringing shows through with every observation, even as he muses about something as tenuous as his enduring influence on his industry, his company and his colleagues. Google “Dighton, Kansas,” and the most interesting information the search engine will produce are early 20th-century photographs of threshing and harvesting crews and equipment, prominently displayed grain elevators and a cookshack wagon next to a wheat field. Dighton, a western Kansas town of only about 1,300 and the Lane County seat, is also Lyle Jones’ hometown. Jones’ father was Dighton’s city manager, not a farmer or a shop owner with a family business to hand down. Early on, Lyle realized in order to make a living for himself, he had to get out of Dighton.

So he went to college at Kansas State University. “I left Dighton thinking I was going to be an electrical engineer,” remembers Jones. But like most students at college, Jones began to rethink his major once he started classes. He didn’t really like electrical engineering, but genuinely enjoyed math. Knowing one of the ways into the then-fledgling computer industry was with a mathematics degree, Jones pursued such a degree and graduated with it in 1965. Jones’ first job was with Boeing, Wichita’s largest manufacturer. There, he worked on several projects, including a missile-testing program in New Mexico, about which Jones jokes that he’d have to kill you if he told you more. After five years, Jones left Boeing to serve as the dean of students and director of public affairs at Kansas Technical Institute (today’s Kansas State at Salina), a two-year engineering and science technology school in the north central part of the state.

But the lure of Boeing proved too strong, and just three years later, he returned to the company as a software development manager on an immense flight simulator project. At the same time, Jones began working toward his MBA, which he received in 1978, and with newly improved credentials, he decided to leave Boeing a second time and go into private business. “I began looking for a job, and I went to a small company developing software for motels, hotels and condominiums,” Jones recalls. “They did everything from reservations to check-in and check-out procedures. I spent almost 10 years there; I went in as a general manager, and came out as the chief operating officer. Business wasn’t good, sales were struggling and we needed one less VP on a day when I was sort of on the wrong side of the president. And I got fired; I was terminated.” No doubt suffering from pink-slip shock and seeking familiarity, Jones returned once again to Boeing. Around the same time, a mutual friend introduced Jones to Ted Cary, the founding president of High Touch Inc.

A year later, when Cary decided to move on from High Touch, he picked up the phone to tap his potential successor. “I got a call from Ted, saying he was leaving High Touch and if I was interested in his job, then I’d better get a résumé out there,” recounts Jones. “I did—and I got the job.” When Lyle Jones accepted leadership of High Touch in the spring of 1990, the company was six years old and had 10 employees. Just a few more than 350 rent-to-own stores used its software. High Touch hadn’t had a salesperson for about four years, so hiring the right one became Jones’ first order of business—and go-getter Sherry Workman filled the bill perfectly. “She went out, she sold the market and we grew quite rapidly,” Jones says. “By fall of ’92, we’d grown our customer base to 500 stores. Then when we got the Rent-A-Center account in 1998, it caused huge growth for us. Today, we’ve got 90 people in the Wichita offices, we bought our largest competitor about three years ago and about 4,200 rent-to-own stores are using our products, which is about 50 percent of the market.”

The former competitor, RSSS, is now a High Touch division based out of Corpus Christi, Texas, specializing in rent-to-rent and retail software. RSSS also offers Maestro Music Business Software for retail and rental music businesses, a growth market for the division. But having gobbled up the next biggest fish doesn’t mean High Touch lacks competition. Jones says Ideal Software Systems, Rental Information Systems and RTO Plus still hold about 1,700 stores not affiliated with Aaron’s or Rent- Way—and they are the company’s targets for growth. “We see the possibility of growing our services and products probably two percent to five percent over the next five years,” forecasts Jones. “We’ve got Rent- A-Center, and they’re a wonderful client; as they grow, they’ve stretched our product, stretched our business and made us better. But we’re also trying to diversify into the payday loans/check cashing industry, so we don’t have all our eggs in one basket.” Nevertheless, High Touch’s key seller remains PRO/Store, a comprehensive software system designed especially for the rental-purchase industry.

PRO/Store is a point-of-sale system that simplifies and tracks the receipt and rental of inventory, payment transactions, rental agreements, customer information and collections. The system compiles all data, produces relevant statistics and enables the store to write a daily report. PRO/Store also includes completely integrated home-office capabilities, connecting home offices and stores, so that information must be entered into the system just once. Compatible PRO/Accounting software helps store locations easily perform all of their accounting functions—paying payroll and bills, compiling and calculating financial and profit/loss statements, etc.—according to home-office mandates. The company also offers FUND$, software designed for payday loans/check cashing businesses, as well as Web site development services. Yet, while Jones thinks High Touch’s software offerings are exceptional, he feels the company’s competitive advantage isn’t all about the product. “I coined a phrase once I’d been here about a year, and I firmly believe it,” Jones states unequivocally. “We’re first and foremost a service company and we also have software products to sell.What it means is, if it comes down to it, we maintain our customers rather than spending time and energy on development [of new features or products].We feel our resources should be dedicated to our existing client base and our service and support are second to none. We have less than a three-minute hold time for our calls. If the client leaves a message, then 90 percent of the time we return his/her call in less than an hour and most of those problems are solved within 15 minutes. We don’t go home with people not fixed.”

The hitch in pledging that your company will provide extraordinary service is that you need people working for you who are as committed as you are to providing it. This is where Jones’ pragmatic approach proves particularly beneficial. Plain and simple, High Touch is too big for one man to oversee all operations, so Jones puts the responsibility and his faith squarely upon the shoulders of his management team— and they deliver. “I’m not an innovator; I’m more of a facilitator,” says Jones. “I’m an extremely team-oriented manager. I’m surrounded by a management team that learned a long time ago that I don’t want ‘yes men;’ I want open dialogue. And if I have to make decisions, I do, but I’d rather have all of us involved in the big decisions. I’m a fairly hands-off manager. I just believe in the value of our management team to get the job done.” High Touch managers aren’t the only ones toting the responsibility to succeed.

The company is employeeowned— through its Employee Stock Ownership Plan (ESOP), High Touch is 49.5 percent owned by employees; Jones owns about another 24 percent and one of the company’s founders owns the remaining 26 percent. “Everybody understands what they do affects the bottom line,” Jones says. “And the bottom line affects whether there’s a year-end bonus, a 401K match or money put into the ESOP.We believe in the value of the employee. “People are truly our best resource,” says Jones. “Hiring is the critical element. And you do need good systems, both software and management systems, ways to manage the company and the people and the products. You can’t be sloppy. Without good people, sound operating procedures and systems—and without belonging to the trade association— I don’t see how you can succeed.” The trade association Jones refers to—and his conversation is heavily peppered with such references—is the Association of Progressive Rental Organizations. Jones recently was honored by the organization with the Ernie Talley Lifetime Achievement Award—the first ever presented to a rent-to-own vendor. “It was my proudest professional moment,” Jones says. “When I see who else has received this award, and then to be the first vendor to receive it, I’m darn proud. I’m proud personally and proud our company has been able to do—and allow me to do and allow all of us together to do—what we’ve done. This is not a one-man company and even though my name happens to be on the trophy, it’s really recognition of our company as a whole.”

High Touch has also been recognized this year as among Wichita’s fastest growing companies and one of the city’s top 10 best places to work. But the APRO award holds special significance for Jones, chiefly because of his deeply held belief in the value of the association. “We, as a company, plug APRO,” says Jones. “We offer an APRO discount to clients who belong. I have a philosophy. I came into this industry believing a strong industry association means a strong industry.As of today,High Touch is extremely reliant on the rent-to-own industry, so if the industry suffers, then we’re going to suffer, too.” Jones involvement in APRO has included serving as a committee member, traveling to Washington, D.C., to talk with congressional delegations about industry issues and using his company’s resources to help put together supporting statistics for the industry in lawsuits and legislative tussles. His favorite part of being involved in APRO, however, is the association events. “From a vendor standpoint, [an APRO] trade show is about half usergroup meeting and half product presentation,” Jones says, “and we always come home smarter than when we went. Anytime APRO people get together, problems come up and problems get solved, because people quit being competitors and turn into partners.We learn what’s going to happen next in the industry and where some of the problems are, and we come home and examine ways we can help solve them, either with our software or with something else we can commit to the organization that might help.

To make the industry strong, I believe APRO and its events must be strong, so we’ll continue to commit whatever we can afford to do.” Of course, once Jones officially retires at the close of the year, the big decisions at High Touch will belong to someone else—sort of. Fellow Kansan and an APRO past-president Wayne Chambers (currently with Advance America Cash Advance Centers) has already been tapped to step into Jones’ presidential shoes in the new year, but Jones will continue to weigh in on company concerns for the next several years as a member of its board of directors. Jones also currently serves as board chairman for not only Wichita’s Westlink Christian Church, but also Manhattan Christian College. In between board meetings, Jones says he plans to see more of his son, daughter and six grandchildren, expand his already voracious appetite for books and spend more time in his capacity as a licensed ham radio operator (callsign N0HYL). But the key post-retirement activity Jones plans to undertake, he won’t be doing alone. “I decided to retire while [my and my wife’s] health is still good, and we can travel and have a little fun together,” says Jones. “We’ve been married 42 years and, as I often say, I’ve had 42 happy years of marriage, she’s had about 38.” He chuckles. “The business just dominates sometimes. I’ve been all over the country for 40 years on business and I’ve seen mostly hotels and airports.

We bought a new truck and a camper and we’re going to see what’s between here and all those hotels and airports.” Once again, Jones’ unsentimental, pull-no-punches perspective drives his point home, succinctly and effectively. “The time is right and I’m excited to transition,” he deadpans. “I’ve had a great run in business and with my career and I couldn’t be happier with where we are as a company. But I’m ready for the next phase.”