Best Practices, Operations, V10I3

Convenience is King

(Image courtesy of OpenClipart-Vectors from Pixabay)

Since my introduction to the shed industry nearly 20 years ago, I have always heard that shed rent-to-own was designed to compete with self-storage. Seeing NO CREDIT CHECK signs displayed on nearly every sales lot across the country might cause one to believe that shed RTO was designed for consumers with poor credit or who might be in a poor financial position overall. 

I believe there is much more value to shed RTO than that.  

The attention given to the NO CREDIT CHECK mentality might even deter some financially better-off consumers from even stopping to shop, which is no different than some consumers not shopping for used cars at “buy here, pay here” sales lots. It is like stating that our sheds in general are designed for poor credit consumers. 

Now, I have never met the individual who created the concept of a rental purchase agreement, so I don’t know the true intended purpose from inception, but I would argue that its sole purpose wasn’t to attract consumers with poor credit history, and there was likely a portion of that concept based on the convenience of renting with the option to purchase.  

What if all those signs on display said something like RENT TO OWN IS CONVENIENT AND FLEXIBLE (royalties expected for the use of this phrase)? What if we changed our mindsets to match the consumers? What if we trained the salespeople about the positive aspects of RTO and how millions of consumers see value in convenience and flexibility? 

Rent-to-own is not expensive, but it is convenient and flexible. With that one sentence some readers are rolling their eyes or throwing out rebuttals we have been taught for decades: RTO is too expensive. RTO is not a good financial move. Or, do not rent-to-own, save your money, and pay cash. 

Surely others reading this, who were not born in this millennium, have heard those very words stated above. I will agree that paying cash is the cheapest option and that an RTO contract carried full term to acquire ownership is more expensive than a traditional principal and interest loan. There is no argument there. 

However, I would also agree that listening to the radio is cheaper than your Apple or Amazon music streaming subscription and that buying groceries at the local Piggly Wiggly is still cheaper than eating at Applebee’s. 

How about your cell phone? This seems a bit extreme to say, but isn’t a home phone bill drastically cheaper than a cell phone bill? A home phone just is not convenient! 

I can only hope you are smiling right now. Yes, there was once a mentality that a cell phone was not needed because a home phone was already nearby. It was not that long ago that consumers did not see the value of convenience, but now almost every American does, and it seems convenience is being accepted more with its additional expense every day.

Let us put this into perspective. I am a middle-aged man and likely I will appear older than I am with this statement, but I do not pay for a music streaming app, but my nephews do and my kids, ages 9 and 12, will soon enough. 

I personally despise paying for apps in general, albeit the ones I heavily utilize I will pay for, but not without exaggerated contemplation and extensive financial planning of what effect the $2.99/month subscription will have on my descendants. 

TV streaming subscriptions, nope. I am still the guy who will watch commercials or see ads so that I can get the free or cheaper version. My nephews and kids cannot stand to watch commercials or ads. They choose to pay for convenience.  

So, I am slow to change, slow to adopt the “convenience” mentality, but I, too, am learning to embrace this convenient subscription-based lifestyle while millions of consumers already have. It is a fact that American consumers will pay for convenience, and if that convenience option is sold separately, they will add it on.

Maybe the American consumers’ love for convenience is not apparent to you, yet. 

Have you ever eaten fast food? Everyone should be nodding their heads yes.  We all have because it is more convenient than buying groceries for every meal regardless of the additional cost. That is not enough, though fast food still is not convenient enough. 

Consumers pay and embrace the convenience of companies such as Uber Eats and DoorDash to make their food choices even more convenient and certainly more expensive. Interestingly, I have never used a fast-food delivery service (imagine that phrase “fast food delivery service” being said 20 years ago), yet Uber Eats has a valuation of $20 billion. DoorDash, over $40 billion.

If you share my views on not paying for convenience in many of these scenarios, just know that a new way of thinking, or more importantly, recognizing consumers’ needs and habits, has created billionaires who are likely sitting on their yachts in the Caribbean, all the while, thousands of their contractors are picking up an individual’s food in a drive-through across America as you are reading this.

What does fast food being delivered by billion-dollar companies and subscription-based lifestyles have to do with sheds and rent-to-own?

Times have changed (I am showing my age again). Mindsets, habits, and priorities have changed. The financial lessons from our parents and grandparents are becoming less engrained in our everyday decisions. 

Just like having fast food delivered is not a lifelong commitment to poor financial decisions, acquiring storage on a rent-to-own contract is not going to be the sole reason for financial success or lack thereof.  

For decades, RTO has been seen in a negative light by the masses, our own industry included. Storage acquired through an RTO contract was not appealing because there were cheaper alternatives. Let us replace the word “cheaper” with “more convenient” and see if that statement is still true. Go back and read that again. 

I could only imagine the parents of the founders of Uber Eats telling their kids their idea was foolish and destined for failure. Are we as an industry not capitalizing on a huge mindset change? Shouldn’t we see a rental purchase agreement as a flexible, convenient, yet more expensive option for a consumer to acquire storage or more space? I believe salespeople and consumers will adopt this positive mentality if we teach the value of a rental purchase agreement.

It is clear that the mindset of consumers has changed. No longer are we primarily about saving money, but about saving time, having options, and having the convenience and flexibility to adapt to our fast-paced lives. 

Of course, this carries a financial factor of some sort, no different than using DoorDash, but we should be matching the mindset of the consumer. Sure, some consumers are attracted to the NO CREDIT CHECK signs, but I would argue, when presented correctly more are attracted to the convenience factor of shed rent-to-own. This very concept should be recognizable by just looking at the overall success of your RTO portfolio. 

During your next dealer day banquet, focus on the value of a rental purchase agreement. Educate your salespeople about the convenience of RTO and the flexibility it offers. Also, ask them to pay attention to their own purchase habits. 

Regardless of our age or financial status, I believe we will all see how convenience and its price tag already have a place in our everyday lives. It is worth noting that the founders of Uber Eats and DoorDash are in their 30s and 40s, worth billions, and did all of this in a short period by recognizing that convenience is worth a lot of money. 

Let us think differently, let us think positively, and be proud of what we do every day.

Just for fun, ask your grandparents if they would pay a stranger to go pick up their food at a restaurant and bring it back to them. Then, ask a 25-year-old. 

In today’s world, convenience is king!

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