Factoids

Chappy's operates two locations and employs 9 people

Ken Chapman has been in the industry for 20 years

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Besides his wife Terri and his Children Courtney 20, and Ryan 14, Ken Chapman, owner of Indiana based Chappy's Rent to Own, has two loves; Racing and Rent to Own.

Ken began his Rent to Own career in Muncie Indiana with Rent a Center in 1984. With 15 years experience to guide him, Ken went independent on August 1st 1999 by opening the first 'Chappy's Rent to Own' in Muncie. Two years later he opened a second location in Anderson Indiana.

RTO Online: What do you see as the Rent to Own industry's biggest challenge in the coming year?

Ken Chapman: The soft economy is a concern, but the real challenge will be finding the next hot category of rental merchandise. A few years ago it was computers, now HDTV is the hot item. Even though HDTV broadcasts are limited, customers want the latest and greatest technology. Our best renting TV is the Toshiba 50" HDTV. 

RTO Online: Do you still rent analog?

Ken: I stopped buying analog six months ago. It may be another 5 years before all programming is HDTV, but the risk is too great. Most of all, I don't want to be stuck with a TV that needs a box or some other modification.

RTO Online: There is considerable competition in the Muncie/Anderson market. How do you compete with the major players?

Ken: One our biggest challenges is competing with the advertising dollars of Rent a Center and Rent Way. There are 8 majors in our market. They are 'everywhere all the time'. We can't hope to compete with their marketing budgets, so our customer service must be superior. We do more volume than half the majors in our market, so I think we're doing well.

RTO Online: What percentage of your BOR is computers?

Ken: 18% of our agreements are computers. The biggest challenge for any Rent to Own, when dealing with computers, is service. We have a unique approach that makes our computer rentals more profitable...we build our own. We have never rented a 'name brand'. The Manager of my Muncie location builds every machine we rent. Our cost is lower, so our rental rates are lower. We completely refurb every returned machine. The fact that we build our own computers makes upgrading technology on returns a snap. With name brands, you're limited to expensive service and unique parts. We're able to offer our customers cutting edge technology, even on pre-rented computers. Our customers get better value, and we extend the useful life of every machine. Some major players report that computers make up 25% of BOR. But with outside service driving up idle and repair costs, I'm not sure how much money they're making.

Note: In case you need proof of the success of his approach, Ken reports that, even with 18% of combined BOR made up of computer rentals, Chappy's has ZERO computers idle for service.

RTO Online: You recently began sponsoring races at Anderson Speedway. Was this because you love racing, or because it's a good demographic match?

Ken: Both! I've sponsored cars for some time. (Chappy's Rent to Own employee Larry Shrock drives the Chappy car, #62. He is currently 13th in points out of 28 cars in the division) Every time I went to the track, I saw one big conglomeration of my customers. The track announcer, a friend for many years, put me in touch with the marketing director and it grew from there.

RTO Online: How would you rate the effectiveness of this form of advertising?

Chappy's "Rent to Own"  Front Wheel Drivers

Ken: We actually sponsor an entire division. The Front Wheel Drive division (FWD) is the largest at Anderson Speedway and they have more races. The FWD races 27 weeks out of the year so the frequency is great. It's also the most popular race with the fans. FWD is an 'entry level' race. The only modifications allowed are for safety, so virtually anyone can participate. By sponsoring the division, we get promo mentions in all Anderson Speedway advertising, including weekly print. The "Chappys Rent to Own Front Wheel Drivers" race draws 5,000 every Friday and 7,000 on Saturday. It's too early to rate the campaign versus print or TV, but when customers immediately start mentioning they 'saw you at the track', you know you've got a winner.

RTO Online: Do you ever race your own car?

Ken: I've thought about driving myself, If I can ever get out of the store early enough!

RTO Online: Can you picture yourself in another line of work?

Ken: I love this business. I've been renting in the Muncie/Anderson area for 20 years. I'm on my 3rd generation of customers. Maintaining that relationship is what I was meant to do.

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