Emphasis on leasing helped Paddock boost his Chevy business
 | Duane Paddock |
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Duane Paddock landed a sales gig at an Oldsmobile store at age 20, and sold 10 cars in his first 10 days. By his mid-20s, he had assumed day-to-day operations of Paddock Chevrolet in Kenmore, N.Y., because of his father's health problems.
Over the past 25 years, Paddock has quadrupled the store's sales. Consolidation in the Buffalo market and a heavy emphasis on leasing have helped his store's sales growth. He now is the No. 2 Chevy dealer in the country.
Paddock, 49, spoke with Staff Reporter Mike Colias.
Q. When did you take over the store?
A. In 1987, my father is 44 and has a massive heart attack. He said, "You've got to run the store." I'm 22, 23 years old and feeling this huge sense of responsibility. I wasn't prepared for it. I already had been a service adviser and worked in parts and in detail. I wrote service for a long time. Then my father wanted me to get sales manager training, so I started to work the desk. In 1989, he sold me 15 percent of the store. From then on, I was running the store day-to-day.
How many new vehicles were you selling at that time?
Maybe 800 to 1,000 units a year in '87. That was from a total of 487 units in 1984.
What did you learn from your dad?
Everything, pretty much. Hard work. Loyalty. Appreciation. The best relationship I ever had with my father was during those four years when we were partners.
So what was your first step after taking over?
The day after my dad died, I was here first thing in the morning. I walked right into the shop. I didn't stay long, but I felt it was important for my employees to know that I was there.
So how do you go from 800-some units to -- how many new vehicles did you sell last year?
Around 4,360. All retail, no fleet. One at a time.
You have to build a team and find people who are hungry and want the same thing as you want. My goal was to become the biggest dealer in Buffalo. We were sixth out of 12. After that, "Now what do I have to do to be the biggest Chevrolet dealer in the whole state?"
Did you buy some competitors?
There's no question there was a change in the marketplace. In 1983, there were three Chevrolet dealers on Delaware Avenue, the street we're on. We've gone from having around 17 metro Chevy stores in western New York down to 10. And Buffalo is a unique town. The people here always have supported the domestic brands. Chevrolet didn't put out the best of product for a period of time, but we still had our loyal customers.
What else?
I think one of the biggest things was the development of leasing. My father used to say, "Back when I started selling cars it was 24 or 36 months financing." Those bells were ringing in my head. "How can we build a lease portfolio? Wouldn't it be great to have these people coming back in every 30 months?"
What's your lease penetration now?
On average, we're leasing in the high 40s percentage-wise. That's been a big part of our growth. My salespeople didn't understand leasing at first. You've got to sell them on why this is good for the consumer. From a business standpoint, I'm thinking, "Do I want to sell them two cars every six years or one?"
You said you took more risks than your dad. How?
We took a lot of product risks. Where some guys would pull back, I was investing in product, taking gambles. Instead of only taking 10 of something, I'd take 50. We also advertised more, and we changed the whole process in how we interacted with consumers. Before there were no processes. It was fly-by-night. I wanted to hold people accountable.
How? Through sales quotas?
I am market-share driven. Quotas can only be driven by what the market is and what our potential market share can be. I brought in a whole system of reporting on market share. We never used to track how many Chevys were sold in Buffalo or what our market share was.
How much has your share grown?
When I first got here, we were about 6 or 7 percent of the total. Now we stretch to around 30 percent. There have been months where 38 percent of all the Chevrolets sold in western New York have come out of this store. My competition has gotten a lot stronger, too. Every day we talk about whether we're above or below our benchmark. We are driven by that report card.
Chevy is doing a lot on customer service. Is there anything you're doing on your own to meet those expectations?
We implemented a call center. We get around 1,000 phone calls a month. The way we were handling them was just not acceptable. So I went old school, to live voices on live phones. We made a commitment to deliver a better experience when you make that first touch with the store. We opened it April 15th.
You've got a lot of scale. Why not add another franchise?
I wouldn't add another franchise in this location. I'll only sell domestic. I believe that the future wealth and well-being of our country is through domestic brands. The Paddock brand is domestic. But I would tell you that I'm very open to another domestic brand close to this location if things would ever come available. It's time.
What brands intrigue you?
I can give you five: Cadillac, Cadillac, Cadillac, Cadillac, Cadillac. I think it has a lot of upside. And that's not to take anything away from Buick-GMC.
Would another franchise be your primary growth mode? Or are there other parts of the business you're interested in?
There are other businesses and other industries. I own an independent collision shop with a partner. We're looking at opening a second store. There are some used-vehicle opportunities on the premium side that we're looking at. The thing I like about the collision business is that it's completely different from what I do here.
Company: Paddock Chevrolet
Dealer since: 1989
Dealerships: 1 store in Kenmore, N.Y.
Annual total sales: 4,360 new and 1,460 used
Quote: "I didn't want to take my father's business and just maintain it. I knew that the only way to be successful was to grow."
You can reach Mike Colias at mcolias@crain.com.
