As a member of the board of the association, I occasionally receive inquiries through our website from people who have a shed on a rent-to-own agreement and are frustrated with some part of the transaction.
They reach out hoping that we as an association have some leverage over RTO companies or the retailers who issue their contracts. Since we currently have no formal membership programs within the industry, I have to let them know we have no such clout.
However, I do care about their experience, as it can and often does shape their perception of the industry, and it could have long-term consequences.
There is a common thread that appears in these inquiries. Almost all of them surround some chasm between their expectations and their experience.
Here are a few examples of such discrepancies. One was struggling to get warranty issues resolved with the product they had under contract. Another made a large deposit on a unit they were now returning (due to how the product was aging) but was unable to get the deposit back.
Some are startled by the early purchase option costs, thinking that the buy-out should be much lower. Occasionally someone has fallen on hard times and is distraught to learn his shed will be picked up and he has no recourse.
In many of these situations, the contract is clear. The challenge typically lies in a lack of customer understanding, often stemming back to the time of purchase, of how the agreement works.
Herein lies the problem—a unique challenge and a great opportunity.
In my years as a company leader both on the retail side and rent-to-own side, I’ve encountered a broad range of perspectives on the viability of the rent-to-own model.
There are business owners who don’t like it but do offer it. There are sales representatives who are deeply uneasy about what they perceive to be a very expensive way to buy a shed.
What often happens in these situations is that there is a reluctance to fully explain the contract during the sales process. This is a setup for large chasms between the customer’s expectations and what they will actually experience.
There are several ways for us to go about addressing this concern; however, all of them are based on increased clarity.
We must work to create expectations that will accurately explain what the customer will experience. The contract must be carefully explained, as simply giving it to them to read is really not adequate. But in order for this to happen, sales representatives need to be trained in this process.
Where do we begin, and who is responsible for this training?
There are several options. When companies are vertically integrated, this is much easier. There is only one chain of command and one relationship of authority, and the training needs to be done as sales representatives are onboarded. But they must also be managed to ensure clear communication with the clients.
The advantage of these companies is that each contract manager will likely know each sales representative and the feedback loop can be tight and efficient to ensure high levels of proficiency. Unfortunately, this is not always the case—not all companies have strong, dynamic cultures.
Leaders must go to work on ensuring a high level of proficiency to give their customers a great experience. Trying to win a sale by not clearly communicating the details of the contract will only generate pain during the entire relationship.
Where the primary business model is based on a manufacturer selling through dealers, there must be clarity about who holds the responsibility to ensure sales representatives are trained.
Is it the responsibility of the manufacturer? The dealer manager? Or is it the responsibility of the company that holds the rental contract?
My experience (though somewhat limited in this business model) would suggest that the company that holds the rent-to-own contract has the most deeply vested interest in assuring the customer understands the contract.
As such, it seems that they should consider offering and even requiring initial training and ongoing compliance checks to ensure they achieve high levels of customer satisfaction.
I’m consistently encountering dealers who have no such training from their rent-to-own partners. I would urge rent-to-own companies to give this some serious consideration.
As an association serving the rent-to-own industry, one of our primary concerns should be how we might serve the industry going forward.
Do we prepare and offer training materials for members? What sort of content would be most valuable? Would companies use it if provided? Or are there more important ways in which we can serve the industry?
As we look to the future, we welcome your input as to how we might most effectively serve the companies, both small and large, in the industry. Feel free to drop me your thoughts and perspectives.
