Rental companies make their money renting, not retailing. But there’s an announced shift at Plano, Texas-based Rent-A-Center to turn more customers from renters into owners.
Or in CEO speak: “to enable higher rates of ownership.”
That’s one of the strategies taking shape at the nation’s largest rent-to-own operator, as the company unveils a new strategic plan and the return of Chairman and founder Mark Speese to the CEO role.
The moves come following a disappointing 2016, in which the company’s total revenues declined to $2.96 billion, down from $3.28 billion in 2015. Before income taxes, the company lost $113 million in the last fiscal year.
Speese’s appointment took effect April 10, and he wasted little time before hammering on the company’s value proposition and core values.
"We recognize that significant improvement is needed," said Speese. "We are renewing our focus on what made Rent-A-Center an industry leader — starting with enhancing the value proposition of our offerings to increase customer satisfaction and enable higher rates of ownership."
The high-minded focus of the company, according to its boilerplate, is to improve the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality, durable products such as consumer electronics, appliances, computers, furniture and accessories, under flexible rental purchase agreements with no long-term obligation.
Speese says the new plan renews the focus on what made Rent-A-Center a leader — “starting with enhancing the value proposition of our offerings to increase customer satisfaction and enable higher rates of ownership.”
One way it intends to boost the ownership rate is through improved early payout options and shorter terms that promote ownership. The company expects the moves to boost ownership from about 25% to 40%.
Other improvements include:
- Optimizing the product mix to better meet customer demand;
- Stabilizing and upgrading the workforce to improve customer relationships;
- Improving account management practices to lower delinquency rates; and
- Optimizing the exiting physical footprint — a step that includes “rightsizing the number of employees across locations.”