Fixed ops come first for Denver dealer
College dropout-turned-owner got her start on the service side
Mary Pacifico-Valley: "Customers like to know who they're dealing with in sales and service. I don't want to build a customer base by undercutting the prices of my fellow dealers of the same brands. I'd rather do it through customer loyalty."
The next time an auto dealer wonders about the potential of a college dropout who applies for a low-level job working the phone, the retailer would do well to consider Mary Pacifico-Valley.
Pacifico-Valley's first job after quitting college at age 19 was phoning customers of Rickenbaugh Cadillac in Denver -- a friendly voice to remind owners that it was time to come in for an oil change or other service.
Today she owns the dealership.
Her Rickenbaugh Automotive Group operates Cadillac, Volvo, Infiniti and Fisker franchises in and near Denver, selling about 600 new and 700 used vehicles last year.
But throughout her auto retailing career, that earliest experience -- as a teenager reaching out to build service business -- has defined her approach.
"I'm probably different than most dealers because most of my experience has been on the service side -- the fixed-op side," says Pacifico-Valley, 56. "And I think that was the right side to learn. A lot of dealers will agree that the real money to be made in this business is on the service side."
She is testing that approach with her newest store, Rickenbaugh Infiniti, which opened at the end of 2013 in Dacono, 25 miles north of Denver. It is Infiniti's third Denver area dealership, a greenfield point built where the luxury brand has little market penetration.
Building sales there is the ultimate task for Pacifico-Valley and the new store's general manager, nephew Nick Pacifico. But building a profitable service business is a more pressing issue for Pacifico-Valley. The service volume at Rickenbaugh's downtown Cadillac and Volvo operations covers more than 100 percent of the dealership overhead.
"The new store will have to operate a little differently than our store downtown," she says. "Because as a new store, on Day One, I didn't have any customers," she says. "And that's scary to me -- to not have a base of service customers. That's not how I run the business."
Emphasis on service
Rickenbaugh Infiniti is emphasizing service in its early marketing push. Rather than shotgun marketing across the region -- a strategy that would put her store in competition with the other two Infiniti dealerships -- Pacifico-Valley is focusing on potential customers who will find the new location more convenient. She is using lists from Infiniti to target through direct mail Infiniti owners in the largely untapped area north of Denver.
"It's a new part of the city, where customers haven't been used to having nearby service available," she says. "We're working to create our own customer base."
The store opened with an attention-getting offer: free oil changes for life with all new-car purchases.
Does all that lost oil-change revenue faze a dealer so focused on service volume?
"Not really," she says. "Not when you look at everything it will bring in.
"We don't know everything we need to know about Infiniti customers yet. But they tend to be younger and family oriented, and lease penetration for Infiniti is high. So if you pencil out how it will work, a lot of customers will be giving up the car at the end of the lease. And if they keep their car six or seven years, they're going to need more service as their car ages. There will be warranty work and other services we can sell."
Pumping tire sales
Pacifico-Valley has also equipped the Infiniti store as a tire center -- another service feature that remained close to her heart as she rose from service appointment employee to dealer principal. Rickenbaugh operates tire centers for all of its franchises. As she moved through the organization in the 1970s and 1980s, she spent time as assistant manager and then manager of the Cadillac tire store.
"We've always maintained a big tire department -- we still do," she says. "We don't run the tires through the parts department. We keep it separate. And when you focus on it that way, you can pick up a lot of revenue."
She declines to reveal dollar figures from Rickenbaugh's tire sales. But she says the group averages two to three times the volume of other stores in her 20 group.
Another facet of retailing tires at the Infiniti startup will be storing snow tires for consumers.
"Snow tires are big around Denver. It's the outdoorsy lifestyle of people who live here," she says. "A lot of people switch over to snow tires in the winter, and back out of them in the spring. So we store their tires at the dealership."
Pacifico-Valley calls the store's former owner, Kent Rickenbaugh, "my mentor." Kent Rickenbaugh's father and the company's founder, Ralph Rickenbaugh, hired Pacifico-Valley in 1976. She said rifling through the elder Rickenbaugh's homemade customer-retention system every day -- a paper file of customer birthdays and purchase dates written out on recipe cards -- looking for reasons to call customers, was the lowest job in the dealership.
Back to college
But while she learned every office job in the service department, and then mastered the tire business, the Rickenbaughs encouraged her to go back to college. She earned her bachelor's degree at nearby Regis University by attending night classes while working days. She then obtained an MBA in accounting and finance at Regis the same way, attending at night.
"I hoped someday to run the service department," she recalls. "But Kent had a different plan for me. When I got my MBA, he made me store controller, which totally surprised me. He said, 'Isn't that what you got your degree in?'"
She became executive manager in 1995, and Rickenbaugh laid out a plan for her to buy the store from him, which she began doing in 1999, becoming dealer principal in 2000.
Barely two years later, Rickenbaugh, his wife and son were killed in a small-plane crash in rural Colorado. It took Pacifico-Valley until 2006 to complete the planned acquisition.
"The culture here over the years has been about maintaining a stable work environment," she says of the auto group. "Salespeople retire from our stores. We have people who have been here more than 20 years. That's what we look for when we hire. We want people to stay and grow with us."
Employee stability helps the service business, she says. The new Infiniti store has 23 employees, while the Cadillac-Volvo operation has 145.
"Customers like to know who they're dealing with in sales and service," she says. "I don't want to build a customer base by undercutting the prices of my fellow dealers of the same brands. I'd rather do it through customer loyalty. We want a salesperson who will be here to sell you your second, third and fourth car.
"And that leads back to our service operations," she says. "If we treat customers well over the years, they will keep coming back to people they know to buy and to get service."
You can reach Lindsay Chappell at firstname.lastname@example.org.