The guidelines given to the software development department 10 years ago was “If it ain’t broken, don’t fix it”. The problem was, it was broken and start-ups were fixing it. The sentiment was for our existing software but this attitude was pervasive in the company. The attitude was “we know what works and we will keep doing it.” This worked for 50 years but times have changed, our customers have changed.

The Dilemma

Aaron’s Inc. is a lease-to-own business. Companies like Aaron’s lease to under-served customers because they can’t get the product in retail locations that require established, good credit. These customers have limited options from companies willing to take the risk that they will continue to pay for the merchandise before ownership. Aaron’s has been one of the most successful companies in this space for nearly 50 years, however times were changing. Start-up companies realized the potential in this market and through innovative ideas created a product to better serve these customers. The idea seems obvious, meet the customers where they are already shopping. If the big box retailer would traditionally decline the customer based on their credit store, this provided an opportunity for a lease-to-own establishment to take the sale. Start-ups like Progressive Leasing figured out a way to serve these customers in the retail establishment the customer was already trying to purchase from. Progressive’s model was simple, determine if the customer would pay their lease through intelligent decision-making. Aaron’s, amongst others in this space, was blind-sided by this innovation. Something needed to happen.

If you can’t beat them, join them

In this case Aaron’s couldn’t compete. So we bought them. Even though we acquired this new business model we still wanted to better serve our core customer base and attract new customers. Aaron’s core customer base is aging and we need to meet new customers where they shop. Younger generation consumers tend to start their shopping experience online so Aaron’s made a leap of faith assumption.

Leap of Faith

Will customers sign a rental purchase agreement online? We could have spent a couple years preparing for this transaction to make sure it was perfect. But what if our leap of faith assumption was flawed and customers would not provide the information or didn’t feel comfortable signing a lease agreement online? That time spent would be a tremendous waste. What did we do? We spent a couple months creating a minimum viable product. For a selected market, we sent emails to existing customers advertising our new lease online product. The customer could browse and choose from a limited selection of merchandise for a discounted first monthly payment. Did we leverage our existing infrastructure to delivery and process these customers? Nope. That would have taken too much time, effort, and planning in the face of this uncertain business model training our stores how to handle these new transactions. We leveraged a third-party supplier and traditional delivery services. Our hypothesis was proven, customers would lease from Aaron’s online. We decided to “double down” our efforts and grow this new business model.

Validated Learning

Most of our hypotheses for the e-commerce platform were validated through A/B testing. Would we get a better conversation rate if…? We designed a platform that suited our needs for these tests given our architecture. We adopted Continuous Delivery principles which allowed us to deliver often and encouraged a constant feedback loop. Through this venture we gained invaluable experience on how to build a product in the face of uncertainty. We continue to expand this “lean thinking” mentality throughout all of our delivery teams. The message to all of our delivery teams is: build, measure, learn.

To learn more about these modern business practices check out The Lean Startup and The Innovator’s Method.