CarMax 2011 Annual Report Download - page 20

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In addition to inventory management, our Electronic Repair Order system (“ERO”) is used to sequence
reconditioning procedures. ERO provides information that helps increase quality and reduce costs, which further
enhances our customer service and profitability.
Through our centralized systems, we are able to quickly integrate new stores into our store network, allowing the
new stores to rapidly achieve operating efficiency. We continue to enhance and refine our information systems,
which we believe to be a core competitive advantage. The design of our information systems incorporates off-site
backups, redundant processing and other measures to reduce the risk of significant data loss in the event of an
emergency or disaster.
Associates
On February 28, 2011, we had a total of 15,565 full- and part-time associates, including 11,659 hourly and salaried
associates and 3,906 sales associates, who worked on a commission basis. We employ additional associates during
peak selling seasons. As of February 28, 2011, our location general managers averaged more than nine years of
CarMax experience, in addition to prior retail management experience. We strive to staff each newly opened store
with an experienced management team.
We believe we have created a unique corporate culture and maintain good employee relations. No associate is
subject to a collective bargaining agreement. We focus on providing our associates with the information and
resources they need to offer exceptional customer service. We reward associates whose behavior exemplifies our
culture, and we believe that our favorable working conditions and compensation programs allow us to attract and
retain highly qualified individuals. We have been recognized for the success of our efforts by a number of external
organizations.
Training. To further support our emphasis on attracting, developing and retaining qualified associates, we have
made a commitment to providing exceptional training programs. Store associates receive many hours of structured,
self-paced training that introduces them to company policies and their specific job responsibilities through KMX
University – our intranet-based, on-premises Learning Management System. KMX University is comprised of
customized applications hosted within a learning management system that allow us to author, deliver and track
training events and to measure associate competency after training. KMXU also provides a variety of learning
activities and collaborative discussions delivered through an integrated virtual classroom system. Most new store
associates are also assigned mentors who provide on-the-job guidance and support.
We also provide comprehensive, facilitator-led classroom training courses at the associate and manager levels. All
sales consultants go through a four-phase on-boarding process in which they are partnered with a mentor, combining
self-paced online training with shadowing and role-playing. Our Professional Selling Skills training provides sales
associates the opportunity to learn and practice customer-oriented selling techniques. This online training program
contains modules on a variety of skill sets, including building confidence, connecting with the customer, and
listening and persuasion techniques. We have also implemented a call recording and review program to provide
constructive feedback to associates on how to improve their interactions with customers. Buyers-in-training
undergo a 6- to 18-month apprenticeship under the supervision of experienced buyers, and they generally will assist
with the appraisal of more than 1,000 cars before making their first independent purchase. Business office
associates undergo a 3- to 6-month, four-phase on-the-job certification process in order to be fully cross-trained in
all functional areas of the business office. All business office associates and managers also receive regular training
through facilitated competency-based training courses. We utilize a mix of internal and external technical training
programs in an effort to provide a stable future supply of qualified technicians. The technicians attend in-house and
vendor-sponsored training programs designed to develop their skills in performing repairs on the diverse makes and
models of vehicles we sell. Technicians at our new car franchises also attend manufacturer-sponsored training
programs to stay abreast of current diagnostic, repair and maintenance techniques for those manufacturers’ vehicles.
New managers attend an intensive week-long workshop at the home office where they meet with senior leaders and
learn fundamental CarMax management skills.
Laws and Regulations
Vehicle Dealer and Other Laws and Regulations. We operate in a highly regulated industry. In every state in
which we operate, we must obtain various licenses and permits in order to conduct business, including dealer,
service, sales and finance licenses issued by state and certain local regulatory authorities. A wide range of federal,
state and local laws and regulations govern the manner in which we conduct business, including advertising, sales,
financing and employment practices. These laws include consumer protection laws, privacy laws and state franchise
laws, as well as other laws and regulations applicable to new and used motor vehicle dealers. These laws also
include federal and state wage-hour, anti-discrimination and other employment practices laws. Our financing