Turning Obstacles into Opportunities

(00:04:01.09)

Jennifer:
So Letitia, I'd love to start with you. As we mentioned, you are super busy, there's always a fire to put out. There's always a new opportunity at your door being presented to you. This can be super distracting. How do you find the time to focus on solving the right problems with the right solutions? And how do you evaluate and prioritize?

Letitia:
It has been interesting, obviously COVID has kind of changed how we all work and what's going on around the world, and when you think about solving problems and prioritizing, I think for us at Tractor Supply, our focus is always on our customer. So we were deemed an essential retailer. We were remaining open and fortunate to be able to do so, to take care of our customers. But that led us down the path of obviously needing to solve problems both for our team members and our customers very quickly. So we were fortunate enough to be able to pull the right group of people together. Early on in the year, we noticed this happening across the globe and to say, okay, things are probably gonna change very quickly as far as how our customers need to engage with us, things we're gonna need to do for our team members. We got a cross functional group of people together, which we typically do to take a look at what was changing in other countries, and how would that impact our customers as they were coming to shop with us over the course of time, and balancing things that potentially we would not need to do as immediately because it would not be as impactful. So for example, if people are gonna need to stay at home, or potentially not be able to get out to go shopping, what things would we need to focus on in order to enable that? So we were taking a look at all of the capabilities that we had that were planned for the future and say, okay, what do we need to accelerate? What we need to bring forward? And when you bring the right group of people together, meaning your logistics organization, your operations in the stores, and your E-commerce customer service in your marketing groups, and you say, what do we need to focus on? For us it's always been simple. From the standpoint of who it is we're focused on: the customer, the shopper every day, and that's at the core of who and what we are. But that gives us a very, I shouldn't say easy, but a very simplified focus on, “Okay, what things are we gonna do first?” And it's not necessarily for us about the revenue or sales aspect, but it was really taking care of being there to service and help customers because we knew things were gonna get tough. But we were fortunate enough to be able to help out with that. So I think you'd have a singular focus and everybody is pointed in the same direction, trying to determine which priority you address first becomes a little bit easier to do. So that's how we focus on it.

Jennifer:
And it's great. And it's pretty obvious that you have focused on the customer with all of the new initiatives like buy online pick up in store that you've offered, so that's fantastic.

(00:06:46.00)

Jennifer:
Chad, when you're presented with an obstacle, and you have a hypothesis, or a solution to solve your obstacle, do you test it first, Or do you just dive right in just to solve that problem?

Chad:
Yeah I will tell you, again, thank you for the time today and Security Benefit has been in business for nearly 128 years, and we've really built this business around a menu as a manufacturer, but we would say financial products as a whole, but we do retirement plans, annuities, other retirement programs for individuals all across the country. But what we really saw during really the past 90 to 120 days is this dramatic shift, and not only what is happening from a financial market perspective, we also saw the dramatic shift and how we could and we had to engage our financial advisors, as well as clients. And I think one of the major obstacles we took and looked at is, as the world went to this virtual communication platform, and everybody was embracing it now, how could we look at finding a very, very proactive approach and way to be able to facilitate that and make it easy for our folks to tackle that. So our initial hypothesis, expressiveness net last 90 days was, we needed to come back and work with advisors. To teach them how to do a lot of online seminars, online communication with clients, how do you do business electronically when you can't be in front of a client? And when that client doesn't wanna be in front of you?

And so that was a time of a really dramatic change for us. And so what we did is start to think that process through, when we come up with an idea, or we start to formulate an approach, our team has a very, very tight connection to our sales and distribution organization. And we are in constant communication with them. We take those ideas, we vet them through our sales teams first, and then from that we typically try to get together with another small group of advisors that we often do business with, and get their input right off the bat. And we can really do that within 24 or 48 hours and get immediate feedback because we have this very, very quite close connection with them. We're very different from a lot of other financial institutions in which, while our sales teams, they wholesale our products, our financial advisors are not our employees, they're independent. So we have to earn that business and earn that respect and earn and provide value to them each and every day, and over time, we've been able to do that. And that helps us facilitate the idea of getting this, constant feedback loop and very tight feedback loops to allow us to test new ideas, bring them to the market, try them, iterate and keep it moving forward. And I think without that, we would never have been nearly as successful as we were, that first quarter of this year.

Jennifer:
Yeah, and I really can appreciate the need for speed in your business, because while people may not want to be in front of your advisors, they need to be there. They're worried about their money, and it's probably the first concern that comes to their mind and so you had to act quickly. I'm really glad to see that you did it.

(00:10:24.08)

Jennifer:
Where is the source of your ideas for overcoming these obstacles? So where do you get your inspiration from? Is it the employees? Is it the advisors who are coming up with the solutions? Is it your customers who are asking for the solutions?

Chad;
Yeah, that's a great question. I think no solution comes to mind without a problem being presented first. And again, I think a lot of times, we have a very tight feedback loop with our sales organization. So they're constantly telling us, here's the challenges we're seeing in the market, here's some of the things that we're running up against, here are some of the things that were being asked about, can you help us? And a lot of times, those are the problems that come to mind and we will collaborate. And I will say that, I would guess that at least 80% of the solutions that we often put into the marketplace, come from our sales teams. They have a general idea of how they think something could work, they come to us in our marketing's teaming and come back for that solution, the story, the message, and we find a way to get into the marketplace.

And I think it's less about the tools, it's more about the collaboration, the process that we can come together and get that into the marketplace. So and we'll iterate on that over time, and we've often taken and built new solutions, whether it's something for the web or something that we need to put together for a presentation or to communication system that we need to get articulated into the marketplace, but we'll get that out there, We'll vet it to our sales organization and they'll start using it and we'll get a immediate feedback from them as to how well it went, obstacles they might have needed to overcome, additional information they're going to need, in a lot of times, what we start with out on Monday in the market can be dramatically what we end up with on Friday.

Jennifer:
I love that rapid iteration. Letitia, how about you? Where do your ideas come from when you look to solve some of the obstacles in front of you?

Letitia:
I think it's very similar to what Chad was speaking about. It really comes from customer needs, and team members. So give you a couple of examples. We're always a test and learn organization, we always have things in the market that we're testing. When we were started in the beginning of this year, the things that we were testing were curbside pickup, self checkout, mobility; we had rolled these out into some of our stores so that team members help customers. We were also testing lockers for pickup and store orders and then this happened and it changed how customers were doing things, right. They're like, I don't wanna go to this store, and some eventually grew to you could not go to a store except for those that were essential, which we were, but then people had fears about I don't really want to be in front of someone. I don't necessarily want to go into a facility. I don't want to get out of my car, but I still need my pet food or my animal feed or whatever it is that we happen to supply.

So we raced to stand up, we expanded the mobility devices in our store so they could take care of customers in a manner in which they could distance but still take care of customer transactions. We set up curbside nationwide in a matter of days. So all 1,900 stores had curbside in 72 hours. And so they didn't have to get out of their car. And they could just tell us, come and put it in my trunk, we'd rolled out payment so they didn't have to worry about even rolling their window down to hand it out. So it really truly comes from customer needs, and then what's happening around them and what their desires are.

And then when you're not in a situation like this, it also comes from feedback that we get. Test and learn on a regular basis. We do surveys with our customers on a regular basis to hear the things that they do like, and the things that we have opportunities to change. So we're in just a fast iteration that Chad referenced in his story, that's really where it comes from, it's any customer challenges. But we've been able to react very quickly by having that focus on where those pain points are. And team members too, it's not just about our customers, but how do we make our team members' lives easier too. So, in this case, they also have concerns they're going to work every day. They're in an environment where they could potentially be exposed. So we were doing things to help them out along the way, protecting them in the experience for the customer, giving them mobile devices and things like that to help them out. So it's really driven by what's going on around you.

Jennifer:
Yeah, I think what's interesting for both you and Chad, you've touched on this, it's not just about the customer, it's the full journey for everyone involved. And as we were talking about just at the beginning, everyone's lives and situation has changed. And so we all have to adapt on so many levels. So it's really impressive to see how you both have been able to just pivot so quickly and do that.

(00:15:09.02)

Jennifer:
Letetia, to date, what has been the biggest change do you think, or initiative that has had the best outcome?

Letitia:
It definitely has been curbside pickup, I would say. Now, there's been several other things that we've done. Like I said, contactless payment, other things like that. But it led to customers who were typically our in-store shoppers, who continue that but not feel like they had to come into a physical location. It's been by far our most successful initiative. We've attracted new customers to our organization, because of that, because they needed customers who had not previously known about it, knew that we were still open and were able to take advantage of that. It also helped our team members from a level of comfort and security for them and helped us continue to provide that. I'd say that's probably been our biggest win. Right behind that too has been, I think, how quickly we were able to react to remote work. So our entire store Support Center headquarters was relocated to work from home remotely in early March, and we were able to take care of that. I think quite frankly, our productivity has not only remained the same, but actually is probably improved in some cases. So we've been very pleased about that, too. And so it gave us the ability to just continue to iterate on things that we know we're gonna need.

Jennifer:
Do you think that with the successes, I mean, if they were to serve a purpose for now, do you think that they're going to continue on as things transition back to normal?

Letitia:
I think they will. If you look at what's going on in other countries where they've gotten past COVID, things like contactless payment are gonna continue. People doing self checkout, it's gonna continue because I think that our new norm will be different. It won't be the same. Sol some of these things will probably slow as far as an adoption perspective versus the last two months, but they'll remain. Curbside will remain to a certain degree. People becoming much more digitally savvy, Chad was referencing, how do I now do things online? People that did not necessarily use digital technology the way others did, and it's been accelerated, by months and maybe years, some people, so that I think we'll continue too.

(00:17:14.02)
Adapting to New Digital Processes

Jennifer:
Chad, what are some of the changes that you've made, processes or products or people?

Chad:
Yeah, I think there's a couple, major things, we've done over the past really 90 days, but some lessons we've learned over the past six months as well, I'm gonna rewind back to at the end of 2019, I learned a very important lesson. It was right before Christmas. And I remember the secure act got passed by Congress. Now you guys may not be familiar with that specifically, but it really had a lot to do with how retirement was going to be viewed in America. And what were some of the rules and processes and it literally got signed the Friday before the holiday and most of my staff were out enjoying the holidays as well as was I, but our advisors needed that information really, really quickly. And, we learned at that point in time that, even though it was during the holidays, we needed to make sure we were still in that constant communication. And we didn't get that information out as fast as we would have had hoped in terms of how we're gonna approach and deal with that law.

So, as we went through COVID- 19, Congress passed the CARES Act literally again on a Friday, and this time, our team was much more prepared. We had been researching following that law from its creation. And even though that law was literally signed by the President on that Friday, we had communications reviewed by legal and compliance and we were sending that information out to our advisors by Monday morning, and we were probably about four days ahead of most of our competitors. Getting information out to our advisors is the value that we needed to bring. It was less about a system or a technology, and more about just making sure that we were being timely and the types of communication, the value we were able to provide to our advisors. So from that it evolved, allowed us to keep moving forward and provide more information, and then we provided more presentations and online seminars. So that was an important process. I think we really tried to turn and make sure we were more prepared for those kinds of things. And we were able to take advantage of it really quickly.

During March, I think the second thing is, we go back and look and one of the things that we as a company had been set up for a long time now, is to be able to do more and have the ability to accept this electronically, meaning that we can take documents that are digitally signed by DocuSign and sign x and those types of programs, so what we found is that as an industry, and our advisor community had really accepted that technology, right? And they are traditionally a very, very paper based organization, and a paper based industry, and this really pushed that technology into the forefront for advisors. They had to go back and figure that out. And we were prepared, and we were there with that, and we just needed to get everybody up to speed and get them comfortable with those processes. And I think that was the other thing that really, we're able to take advantage of, during this time, is that again, we had a lot of those things set up, but the adoption rate had been a little low. But now advisors did not have a choice, they needed to be able to do business, cause that was the only way they could do business. And I think that was one of the advantages we were able to take advantage of during that time.

I think the last thing is that some of the process that we're able to do differently, is teach advisors to be able to get comfortable with communication online, and be able to do those seminars and those approaches and be able to deliver information, whether it's one on one, or whether it's going to be a seminar for hundreds of their clients. But I still believe first and foremost while technology is important, we had to get them comfortable, content is king, they needed something to present. And that was one of the things that we really focused on, we continue to focus on, and we had a series of presentations that advisors could literally download and use within minutes and host a seminar for their clients to help ease some of the questions and some of the comments that their clients had about the market. So, those are some of the things I think we felt like we were able to take advantage of in this last quarter. And it showed for us and we're really proud of the effort, the sales teams and advisors were able to take advantage of it and be able to adapt and move forward. So those are some of the basic things that we feel like really changed our company, and will probably change for the better going forward.

(00:21:51.01)

Jennifer:
Yeah, I love that your solutions have longevity. So they're not just to solve a really discrete problem. They seem to last a really long time, you're able to draw from this knowledge base that you've collected and just reuse over and over again. I think that's brilliant. So what now Chad? As things transition back, what sticks, what doesn't? How have these opportunities you just pushed on how they've changed organization, but how do you think things are going to be going forward?

Chad:
Yeah, I think for us as a firm, this company has been firmly rooted and dedicated to working with teachers and educators all over the country, and they're some of the most resilient and consistent savers in terms of saving for retirement, planning for retirement. We're really proud of their effort and things that they had to endure over the past 90 days. But most importantly, if you look at that market as a whole, one thing I really saw, especially being a spouse of a teacher, is that they embraced a technology that they probably were never really familiar with or used very often. That was, whether it was Zoom, WebEx, GoToMeeting, whatever platform it was, I can give you first hand accounts of how I saw teachers who literally never even knew how to log in, who were masters of using that within three or four days. And I think part of that is now they're going to be much more open to communicating with their financial advisors and financial representatives, and be able to conduct business online that way. And I think that's gonna be one of the dramatic shifts that we're gonna see in our industry as a whole. So as we work with teachers and educators to help them save for retirement, plan for retirement, using that technology, and that tool set delivering content that way, I think that's going to be the wave of the future. And I think that's some of the things that we're going to see explicitly come this fall as we hope that teachers can get back into their classrooms. But if that's the case, we are able to get advice in front of clients, in a personal relationship, we think we can do that online. We need to make sure the content is there. They have the accessibility and the tools set up to date, the advisors are comfortable in delivering that content but we think that's the way of the future. And that's how we think and we believe that a lot of clients will start to engage with us going forward.