There is a tendency among RTO veterans to believe we have a
"sixth sense" when making the go, no-go decision on a rental
Most, if not ALL of the customers coming through your front door
have rented or are currently renting from a competitor
A customer that admits freely to renting elsewhere is "GOLD"
Every person knows 200 people well enough to invite to a
wedding or a funeral
When you ask the right questions on a rental application,
and you insist that it is filled out completely, most "high
risk" customers will simply move on
reading the rental application, eager to gain an agreement...and you
get this funny feeling. You try to convince yourself it's gas, but
you know in your gut that something
is just "not right". You can't quite put your finger on it...but something
is telling you to "just say no". The
application is filled out completely and the information appears to be
accurate. But there is that "tickle" on the back of your neck
that won't go away.
Let's face it, we have all
(horror of horrors) delivered
rental merchandise without checking references. There is a tendency
among RTO veterans to believe we have a "sixth sense" when
making the go, no-go decision on a rental app. A "shoulder
devil" that whispers in our ear..."Go ahead, It's
easy.... write-em-up and send-em-out... Gain Gain Gain!"
reviewing a Rental Application, you are interested in 2
- Is this customer a "Skip Risk"?
- Will they still be renting 4 or 5 months from now?
there is no substitute for diligently checking references, there are a
few responses that warrant increased caution.
you ever rented from any other Rent to Own?
While we may like to think we are the only Rent to Own in the universe, the reality is
"we all rent to the same customers".
typical RTO Customer rents about 4 months. Where do they go? They go
down the street to the next guy! If you doubt this, check out a few
customers that have had multiple agreements spread over several years.
If you have 3 competitors in your market, "your" customer will
return about every 12 months. (Math is a beautiful thing)
line, most, if not ALL of the customers coming through your front door
have rented or are currently renting from a competitor. If a potential
customer states otherwise (while there is a slight chance this may be
true) you should be on the phone to your competition before the ink is
dry on the application.
On the flip
side, a customer that admits freely to renting elsewhere, and is able to
list all references with addresses and phone numbers is
"GOLD". This is a way of telling you "Go ahead, call
them, I'm the best customer they ever had". Don't let this customer get
from the Latin Root "unemployed"
I have been self employed for 15 years. I can't get a sandwich
without 2 years of tax returns and a blood sample! A "legitimately
self employed" person will have no problem supplying proof of
income for a reasonable period.
"I only know 2 people"
In my years as a salesman, I came to believe in Zig Zigler's fundamental,
inescapable, law of the universe. It is known as "the law of
200". Every person knows 200 people well enough to invite to a
wedding or a funeral. Anyone with a pulse should have no trouble
listing 5 friends or neighbors they see on a regular basis.
RTO Applications require "personal references". The level of
difficulty a customer has listing 5 personal references is, in my humble
opinion, a better indicator of the customers reliability than actually
calling the references listed. If a potential customer struggles for 30
minutes to come up with references...be on guard. The customer is
actually struggling to come up with 5 people who won't laugh when you
call and ask if they are reliable.
you Own or Rent Your Home?
The percentage of Rent to Own customers who own a home, vs. rent a home
or apartment, is
essentially non existent. "I own my home" may mean 1-"I
own my home" or 2-"I'm behind on my rent and I don't
want you to call my landlord.
How to say NO
By now, some of you think I am a
hopeless cynic. Nothing could be further from the truth. I could count
on one hand the number of times in 6 years I refused to rent to a new
customer. When you ask the right questions on a rental application, and
you insist that it is filled out completely, most "high
risk" customers will simply move on. The level of detail required
should be directly proportional to that "funky" feeling you
have. Understand that you are in the "risk" business. Accept
that risk and manage it.
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