Joel DeNooyer of DeNooyer Chevrolet is a third-generation dealer. His father, wanting his own store, struck out on his own in the early 70s leaving his father’s dealership in western Michigan.
He settled in Albany, NY and turned the business over to Joel in 2000. Today, DeNooyer Chevrolet sells over 400 vehicles a month and is Chevrolet’s top selling certified used vehicle dealer in the Northeast.
DeNooyer is a multi-year winner of General Motors’ Dealer of the Year award, and also has a thriving commercial fleet business.
It’s the classic family-owned dealership that plays a critical role in the local community.
Joel recently talked with Dealer magazine about the business and some of the unique ways the store has been able to grow and retain business. Recalls, commercial trucks and selling out of the service department have helped DeNooyer Chevrolet become one of the brand’s top stores in the Northeast region.
Your grandfather began selling cars in Michigan in the early 1950s. When did the family make the move east to New York?
Well my father was the youngest son. He had two older brothers and they were considerably apart – about 10 or 15 years – so there’s a big span. And he was the used car manager there; kind of the young gun. He wanted his own deal. He believed he could crank it up so he went after it. He ended up getting the Chevrolet point in Albany at age 30, in 1971.
The other stores in Kalamazoo and Grand Rapids are still in the family, and are run by the cousins and uncles.
As have so many other dealers, you grew up around the business. Is it something you always embraced and wanted to do?
I did. I worked here during high school in the summers and did all of the typical jobs you do in high school.
After school, I attended Northwood University for its four-year program and then did the NADA dealer candidate school. After that, I came back and worked at our Dodge dealership as a sales manager.
In the early 90’s, I started working at the Chevrolet store and took over in 2000 when my Dad retired. He moved to Kenya and opened a resort that he has since sold. He now has an aircraft leasing company there.
So in your first 15 years, you’ve seen a lot of turmoil and changes inthe industry. How is the business doing?
It’s fabulous. We are consistently running year over year and month to month with 20% to 25% increases. The overall industry, of course is up. But I have a good young team and they just rock and roll. We have 142 employees here.
We’ve focused on our digital spend and do a strong job on social media and Facebook – not just with our own page, but also with Facebook ads and knowing which demographics to target. We’re strong also with tracking what the third-party vendors provide.
Projections for this year are all over the board with some people saying sales will begin to plateau, or even contract, this year. What are you seeing?
I believe we’ll just continue to grow as a dealership and Chevrolet will continue to grow as a brand. Chevrolet was the number one franchise in increased market share last year. And seeing some of the new products that are coming out the next couple of years, along with initiatives that we’re doing that are starting to show promise, I expect we’ll maintain that 20% to 30% increase month over month and year over year for several years. We’ll probably hit 400 sales this month (March).
So everything we’re doing is based on that growth, such as moving into a service BDC, purchasing land for additional parking – including offsite locations. And we’re making the reconditioning shop larger.
We’ve had to lease space at a mall to park 60% of our inventory because we’re out of space here.
“When I see a family that’s excited because we did the right thing and were able to get them into a vehicle – and often getting them more car than they thought they could afford – that still makes me wake-up every day.”
You mentioned the service BDC. How close are you to implementing it?
We’re about 60 days away. It will be internal, sort of modeled on our sales BDC that we already have in place.
Let’s talk about your commercial truck business.
It’s been a great business for us. Much of our business comes from the small business — plumbers, electricians, contractors, local builders. It’s more profitable than other areas – and that’s mainly because of the service business that comes with it. The vehicles need to be highly maintained because it is critical for our customers’ business. It’s their livelihood. And what happens usually is that our commercial customers often end up buying their private vehicles from us.
Because they have that relationship with us, our business is continuing to grow. So we are aggressively going after it. We are going to have 25 diesels in stock this month, and then we are going to have close to 50. We used to stock 10 or 15. And we have approximately 30 box-vans in stock when we used to have four. So we think there is a lot of growth in that.
And it looks like Chevrolet is going to get back into the medium truck business, which is an area we’re getting into also. It will be interesting to see how it works out with Chevy.
What’s the secret to having a sustainable commercial business? It’s an area not many dealers play in.
Well, commercial is really about the inventory.
To help us advertise our inventory, we use a company called Work Truck Solutions – it’s on our website. It gives us a dedicated place for our commercial inventory and helps us price it. We’re able to better target our customers more frequently.
We also are able to increase our inventory – at least online – because we’ve been able to combine our inventory online with other local dealers that have commercial business.
Again, it’s about the inventory. We have to have it. It’s not like the customer is going to order it and then wait. If that vehicle isn’t sitting here with the box on it with whatever utility they want, then you are out of the game.
Businesses need it yesterday. We even keep Silverados and other work trucks in our rental fleet just to cater to those customers.
Are you able to evaluate or predict what inventory you need from month-to-month so that you have the right inventory on the ground?
We have an internal program that shows exactly the vehicles that we have, even down to the packages. So we constantly see what we need. It is a little bit easier on the commercial side because it is pretty specific.
What are some of the challenges?
Well, the challenge for us is where to park the trucks. The other challenge is the facility. You need the lifts and the doors. We’re actually addressing that now with our facility.
And, you have to have highly trained sales people. They need to know exactly what the customer is talking about. The sales person can’t say, let me go check that out. The commercial folks better know what they are talking about because if you build it with the wrong box or the wrong specifications, you will have a problem.
And I think Chevrolet is getting back in the medium-duty business which we are going to be involved in. It will be interesting to see how Chevrolet does with that, but we think it will be a good opportunity.
Talking about Chevrolet, you have to be pretty happy as a dealer today with the brand.
I have never been more confident with Chevrolet and its management team and their product. Every time they seem to hit a home run on the product side.
And the brand has had the most growth. If you told me that five years ago, I would have thought you were crazy. It is always about the product. You can fix your problems if you have the best product, you know.
You’re strong in new cars and the commercial fleet business. What about used vehicles?
We are the number one GM-certified dealer in the Northeast. And usually we will rank in the top ten in the entire country. We will sell 200 pre-owned per month.
So you are almost two to one, new to used, then. That is a good ratio. I don’t want to use the word secret but what is your strategy? How do you sell so many?
One reason, just like the commercial fleet business, it is having the inventory.
We’ll stock unique stock inventory also such as high-end vehicles. Our used inventory is not filled with off-rental vehicles. At least seventy percent of the vehicles come from our customers that have either leased or bought from us – which means seventy percent of our inventory is one-owner vehicles.
Our lease penetration is over fifty percent – and especially, the programs offered for Silverado are unbelievable, so our penetration with those vehicles is high. Having that type of penetration means we have strong base of return customers. And that is a lot of our focus – customer retention.
I also believe strongly in reconditioning our vehicles and we price weekly using vAuto. We will turn our inventory every 45 to 60 days.
Do you still go the auction?
We do everything mainly online so we rarely go to a physical auction. But our local auction is starting to carry some previous lease and rentals so we might start going a little bit more.
But right now it is all pretty much online and then we’ll wholesale locally. But finding inventory is a big challenge. Our used car manager works it 24/7. If we could get the inventory, we’d sell a lot more.
Are you marketing or selling out of your service department?
Yes, we data-mine, and then we passively communicate to the customers. Our sales manager, Beau Mayhew, who also oversees our commercial business, developed a unique program for us using Dominion Dealer Solutions. It’s part of their service drive solution.
When they come into the service department, we can find out what position they are in in their current vehicle. We also take a look at soft credit to see where they stand in their current credit situation.
That lets us structure a deal on a similar vehicle while their vehicle is in service or while they are having an oil change done. We’ll passively offer the restructured deal to the customer, including an appraisal on the vehicle in service and a number on a new vehicle. If they are interested, great, but if not, we don’t push them. We have seen a nice return on that.
If they decline, we’ll attach information in a letter to each repair order. Our BDC follows up with them to make sure they’ve seen and understand the letter.
Was it tough getting buy in from the service department?
No, because we really do it passively after the vehicle has already been repaired. I know some people that aggressively pushed service customers into buying another vehicle. But what happens is that customer stops coming back for service because they don’t want to be confronted every time they come into the dealership.
If you’re pushing your service customers hard, your sales numbers might be great initially, but then, I think your retention goes down after a while.
How has the huge number of recalls affected the service department?
Recalls, which seemed like potentially the worst thing ever, turned out to be unbelievable. It increased our service business by probably thirty percent. And most of these people were not servicing with us anymore.
So if you handled it right – which I think we did increasing our staff and changing our systems – you were able to hold onto those customers. It was a huge win for us because we brought people back who hadn’t serviced with us, and were able to retain those customers.
It was tough for our guys because the phone was ringing off the hook. We hired appointment coordinators and we were tapped out, but it was really a huge spike for us. We’ve been able to continue at that level.
But going into it, my biggest concern was the retention would be hurt because customers would be run through that mill. But we pre-planned and it worked out.
You mentioned that you are looking at buying some more land. Is that for inventory?
Yes, for inventory and possibly an off-site, used car-reconditioning facility just so I can use the bays here for service because we are increasing business so much. I need more space here. So I could probably pick-up eight bays by moving our used vehicle reconditioning offsite. But it has to be close.
We are bursting at the seams right now. We have our employees park next door. The family next door owns a big, office building. Fortunately, they let our employees park there otherwise we would not even have room for the employees to park.
You’ve been in the industry your entire life. What is your favorite part of the business?
It’s still selling cars. When I see a family that’s excited because we did the right thing and were able to get them into a vehicle – and often getting them more car than they thought they could afford – that still makes me wake-up every day.
Obviously, dealers have a tough reputation across the board. How hard is it to fight that perception as a business?
I don’t know that we’ve seen that. Our family has always been in the community. I’ve never really bought into that practice of jamming the customer. We have up front pricing. It’s not like we pull out the sharpie and come up with a deal that hurts the customer.
The community part is important. I am doing a program right now that I initiated that will provide a million meals to local families. As part of our 45th anniversary of being in business I am putting in a minimum of $45,000 to get it started. With the help of our local credit union, Channel 10 and others, we are going to generate enough money through donations to feed people in our community.
I found out that one in ten people in our community are not really sure where their next meal is coming from, and it blew my mind. So we are going to do a whole campaign on that.
So you are 48, still young and you are looking to grow. Do you have family, children that will follow you in the business?
My daughter is 19 right now and in college, so we’ll see. She didn’t work at the dealership in the summers like I did. My brother Tom has a son about the same age as my daughter, and I believe he’ll get into the business.
I hear so many stories, and you are one yourself, of the kids who have gotten into the business and have done incredibly well.
Well, the percentages are not for us. Usually the second generation doesn’t do as well. When I took over, my father made it very clear to me that the third generation – which I am – usually fails. But this business is probably three times the size of what it was. We are a family-owned business. I’m the spokesperson, but the entire family is involved and always will be.
Author: Digital Dealer
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