CarMax 2013 Annual Report Download - page 15

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. 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, 2013, we had a total of 18,111 full- and part-time associates, including 13,705 hourly and salaried
associates and 4,406 sales associates, who worked on a commission basis. We employ additional associates during
peak selling seasons. As of February 28, 2013, our location general managers averaged 10 years of CarMax
experience, in addition to prior retail management experience. We staff each newly opened store with associates
who have extensive CarMax training.
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 (“KMXU”) – our intranet-based, on-premises learning management system. KMXU 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
new sales consultants go through an on-boarding process in which they are partnered with a mentor; combining self-
paced online training with shadowing and role-playing. Our professional selling principles (“PSPs”) provide all
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. KMXU also provides access to hundreds of short video-based learning
modules that provide focused behavioral examples supporting the PSPs. We also have 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, 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. Reconditioning and service 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 and service. 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 complete intensive training where they meet with senior leaders,
participate in hands-on activities and learn fundamental CarMax leadership 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 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 activities with
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