Unlimited Earning Potential: Building Business People From Scratch At Aaron's

"Give us a year and we'll give you a career."

That's the pitch people get when applying for a job at Aaron's Rents. But it won't be an easy year, says Todd Evans, vice president of franchising for Aaron's Sales and Lease Ownership division.

"It's going to be a tough year. There's no doubt about it," he says--a year filled with late nights, hot and cold weather, carrying big refrigerators and television sets up and down stairs, and calling customers and knocking on doors when they don't pay on time. But for someone who can pay attention, follow the playbook, and work hard, the results can be amazing.

"Our top-paid store general manager made over $250,000 last year," says Evans. "Actually it was approaching $300,000--which is huge. Not many people who run a retail store get the opportunity to earn that kind of money." Actually, not many people anywhere do.

What Aaron's also offers from the start is something not often seen by job applicants--in any field: clarity and predictability. This continues throughout their time on the job, and includes:

• a carefully defined career path;
• training and support at every step;
• continual measurement and evaluation; and
• unlimited earning potential.

"We have a great compensation program for our general managers," says Evans. "They can run a store up as big as they want, and their compensation is going to grow accordingly." Aaron's pays its GMs a base salary plus a percentage of the monthly revenues of the store they manage. The greater the revenue, the greater the take-home. Climbing the ladder to the GM level demands a lot of any associate. A typical journey includes the following positions: product technician (assembling rental items); delivery person (sets up items in a customer's home); customer service rep (responsible for merchandise, the showroom floor, and greeting customers); sales manager (responsible for sales on the showroom floor); manager trainee (sales, as well as some of the nonrenewals, i.e., collections practices); and ultimately, a customer accounts manager whose job is basically to get past due customers to pay their bill.

"It's a complicated business to learn. It will take you about a year to learn--if you do every job in the store," says Evans. And it's a tough business, he says. Just try carrying a 52-inch screen TV to the fourth floor of no-elevator apartment complex. "That's kind of the pitch we give at these recruiting fairs and shows that we go to: 'Give us a year and we'll give you a career,'" says Evans. "You will have to work your hump off for a year. But once you get it, and get the opportunity to get a store, you can really do well."

And once someone has learned all the aspects of running a store by holding various positions, "You develop a kind of intuitive sense of the whole--with an eye on the details," says Evans. "Then you become a pretty valuable person to us. If a person can properly execute the Aaron's program with passion, he says, their only direction is up.

Each position comes with a complete set of tools and techniques to train a person to be successful at their job. Take, for example, non-renewal practices (collections). Aaron's would rather see a customer pay than have to cart back their rental items. "It's easier to carry $100 instead of a big screen TV," says Evans. Or a sofa or a bed.

"If customers aren't paying in a timely fashion, you call and encourage them to renew; or get in a delivery vehicle, drive out, and knock on their door," he says. When they make contact, associates are encouraged to work with the customer, in a respectful manner. For instance, if the payment is due on the first of the month, they should ask if that's a problem. Perhaps the rent or mortgage payment is also due that day, and the 15th would be easier.

Building a business person from scratch

"Once you become a general manager, we make you a business person," says Evans. "What I mean by that is we have a P&L culture in our stores, and we work with new, fledgling general managers on how their business activity and the things they do in the stores affect the P&L. They get paid a percentage of the net revenue and the pretax profit. So a person is motivated to drive that revenue in the store as much as he possibly can--and he's also incentivized to control his expenses as much as possible."

Evans was hired in mid-1991 to build the company's franchise program. Aaron's had 19 stores open when he started and about 26 by year-end, all company-owned. As of summer '07, Aaron's had nearly 1,200 stores open, with slightly more than a third (404) owned by franchisees. And while he's seen his share of general managers through the years, excitement and enthusiasm still rang in his voice as he described the personal growth of a new hire from a raw recruit to a business-savvy, mature professional, managing a successful store.

He's seen many a product technician, who started by assembling tables in a back room, earn his way up to sales manager, handling greater responsibility and bringing home more money. "His chest starts to stick out a little further, his chin goes up a little more, and his shoulders go back as he's closing deals in the store," says Evans.

Once an associate rises to a general manager, everything changes. It's time for the major leagues--and major league training. "Here's a person who's never worked with a P&L, who doesn't understand a cash flow statement, a balance sheet, or an income statement. But he's a general manager in a store who gets paid off of profitability," says Evans.

The general manager is also managing personnel, coaching, guiding, setting goals, counseling, and redirecting a team of 7 to 10 people in a store. Aaron's works with new general managers on such items as personnel costs, inventory levels, and how taking care of products all translate into profitability.

"It's just amazing to see someone become a young businessman or woman. And that skill set is transferable to any other business out there. Once somebody understands how to run a business, and how the activities and the things that you do in the store affect the P&L, all of a sudden you've got a good little business person there--and there's not a lot of them out there. We work very, very hard to nurture and cultivate and grow these people," he says--and to keep them (see sidebar).

Getting to business "102"

After someone becomes a general manager, they've reached what Evans calls the "102" level: they have become good business people. At this point, he says, "They literally have unlimited upward potential as it relates to income."

A successful general manager also has the opportunity to become a regional staffer: for example, a regional sales manager, who helps with sales at all of the dozen or more stores in a region. A good regional staffer can become a regional manager, responsible for anywhere from 6 to 16 stores. These folks, says Evans, "are guys who have a lot of horsepower. They're managing the managers."

The best regional managers become vice presidents, says Evans and typically sit on top of about 100 stores. And if they ever want, they can even assemble a table, or carry a 52-inch television set up three flights of stairs and explain to the family how to work the remote.

Finding and Keeping the Best Aaron's is proud of the fact that its retail stores give its employees--whether they have a GED or PhD--a chance to succeed beyond their wildest dreams. Here's a little inside insight into how they do it, from Todd Evans, vice president of franchising for Aaron's Sales and Lease Ownership division.

1. Have a recipe. "You must have a very defined job description, or task sequence, for somebody when they come on board," says Evans. "If somebody's not clear--down to the last detail--on what their responsibilities are, then you're already off to a bad start." To ensure that every person knows exactly what their job is at all times, Aaron's has broken down every part of every process into what Evans laughingly calls "nauseating detail." For example: If the phone rings in a store, there's a "first up" person who grabs it on the first ring, a "second up" person for the second ring, and a "third up" person if it rings three times. Or, if there's a sofa and a love seat with matching coffee tables and end tables, there's a second and third choice for those tables. And if the lamps for that group are unavailable, there's a second-up and third-up choice of lamps, too. Ad nauseam? Perhaps, but everyone at Aaron's knows exactly what their job is at all times. "I think that's hugely important," says Evans

1. Train, train, train. When it comes to new hires, everybody, including Aaron's, says Evans, is guilty of telling the new person: Hey, you're hired, you're the sales manager, your job is to sell products, here's a name tag, now get out on the showroom floor. "You really have to commit to your people; and you have to spend the time, energy, and effort on them to train them," he says. "I think the first five days are absolutely critical. That's when the employer has the opportunity to really set the tone, the tempo, the pace, and the level of expectations you have with that associate."
2. Keeping the good ones.

• Inclusion--"Make people feel they're part of something that's bigger than them," says Evans. One way Aaron's achieves this is through its "scoreboard": Everything is measured (see sidebar), and all the activity reports are published by everyone all the time.
• "Inevitably, our guys compete. They have a very competitive mindset, and that's the atmosphere we have," says Evans. And competition is a great motivator. For example, he says, when a new general manager opens a store, he'll pick five or six stores that opened at about the same time. "Those guys are going to establish a relationship with each other. They'll monitor each other's growth on a daily basis, and call and rib each other and laugh and joke. It's all about us competing with ourselves, and not competing with the other people out there that are perceived competitors in the market."
• Recognition--"It's all about recognition," says Evans. "When somebody does well, you say 'Hey you did a good job,' and let the whole world see they did a good job; if somebody did a bad job, you say, 'Hey, you did a bad job, but guess what? The whole world sees it, but here's what we need to do to set about correcting it. So let's see if we can fix it very quickly so we can move forward."
• Compensation-Have a compensation program that allows someone to really enjoy upward mobility (see main story).

A "See" of Information

When it comes to information on store performance Aaron's has an open culture: everyone knows what the other stores are doing. "Every day, every store sees how every other store did across the country yesterday."

Aaron's also gathers information on every possible stat and nuance it can. "We slice and dice statistics more than the National League," says Evans.

"We have a very good IT system," he says. Its systems poll all the stores each night, and the data is dumped into buckets for reporting and analysis. If he wants to know how many dryers sold in a given city the Monday following a rainy weekend, he can do that.

"What's the point of playing the game if you're not going to keep score?" says Evans. "We're over the top on keeping score. We measure everything--and we post the scoreboard for everybody to see on all of the critical matrixes that make or break our business on a daily basis."

In addition, Aaron's has P&L meetings where general managers have to stand up in front of a wall-sized screen with their store's P&L statement on it. They appear before their peer group (other general managers) and have to talk about their P&L.

"If it's a good P&L, you're excited to get up there and talk about what's going on. If it's a bad P&L, you kind of tuck your tail between your legs. But hey, it's your P&L, you own it," says Evans. "Those kinds of things are just tremendous tools to keep everybody conscious every day."