Canadian Retailer - Spring 2012 - (Page 52)

RCC MEMBER PROFILE EASYHOME: A FORWARD REGRESSION David Ingram turned around a struggling rent-to-own company by keeping the customer foremost in his mind BY CAMILLA CORNELL W hen David Ingram took over as COO of RTO Enterprises in late-2000, it was bleeding red ink. The 100-store rent-to-own company had grown rapidly through acquisitions, but it was relying on extremely expensive debt for funding and it simply wasn’t able to generate enough sales to keep it afloat. “It was essentially bankrupt,” says Ingram. Most managers would have walked away and never looked back. But Ingram was intrigued. At the time he was a well-regarded self-schooled manager with a solid 20-year history in retail in the UK, the U.S. and Canada. He admits part of the draw was the chance to get a good shareholding in the struggling retailer “so I could benefit from the upside growth.” But it certainly wasn’t the only factor. “Most of the jobs I’ve done have been to take on situations that are difficult and stressful and in need of a turnaround,” he says. “I enjoy the challenge. I like the urgency, enthusiasm and excitement that it creates.” IDENTIFYING THE CHALLENGES The first big issue Ingram faced was that the business was reliant on extremely expensive debt and that meant vendors were leery of supplying the right inventory. So in February 2001, just two months after Ingram started at RTO, he initiated a rights issue that allowed existing shareholders to reinvest at a very low share price. The proceeds – some $10 million – went to pay down high-interest debt, positioning the business for growth. Having saved the company from imminent bankruptcy, Ingram then turned his attention to fixing “a model that was obviously broken.” By May of the same year, he had become President and CEO, and he began to assemble a team that could carry out his vision. One of those people was Dave Maries, now Senior VP of Marketing and Merchandise for the company. “I had just built a house in Colorado and settled my wife and kids there,” recalls Maries, who has worked with Ingram on and off for 25 years now. “But I followed David all around the world because I knew when he said this was a great opportunity for all of us, I didn’t have to second-guess him. For him, failure was not an option.” Ingram and his team set about isolating some of the factors that had led to RTO’s shaky financial situation. One of the primary issues, they determined, was that the company had no cohesive identity, making it difficult to build and market a successful brand. Because RTO had grown through acquisition it had six different brands across 100 stores. “The belief of the team prior to me was if you just maintained those brands, that would create competition between them and the group would benefit overall,” says Ingram. “But there was nothing unique about them – the product was the same, the pricing was the same and the service was the same. We couldn’t get any leverage and we couldn’t market a single brand because we were spending all our money on six different brands.” It was, Ingram recalls, “extremely inefficient.” “It’s (customer service) not about teaching robotic responses. It’s about having a natural ability and desire to go above and beyond to meet the needs of our customers.” — DAVE MARIES, Senior VP of Marketing and Merchandise, EasyHome UNDERSTANDING THE CUSTOMER - BUILDING THE BRAND So the team set about building a single, unified brand for the RTO stores. They looked at everything from the products sold, to the name, organization and locations of the stores, using focus groups and sophisticated regression analysis (aimed at helping them understand their customers) to come up with key insights. “We separated our focus groups into three distinct segments,” says Ingram, “existing customers, prior customers, and those that matched the demographic but weren’t shopping with us. We wanted to know why they had never tried us.” They determined that RTO’s customers tended to be 52 | canadian retailer | spring 2012 | www.retailcouncil.org/cdnretailer http://www.retailcouncil.org/cdnretailer

Table of Contents for the Digital Edition of Canadian Retailer - Spring 2012

Publisher's Desk
Shop Talk
Store 2012 - The Power of Engagement
Director's Message
Shared Leadership at Fountain Tire: It's How They Roll
Technology Enabling an Enhanced Customer Experience Across Multiple Channels
Retailer's Guide
Continuing to Grow and Succeed....Independently
Canadian Retailers: Evolving with the Times...and their customers
EasyHome: A Forward Regression
Advertiser's Index
Retail by the Numbers

Canadian Retailer - Spring 2012

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