Posted: November 12, 2012
Chux Trucks Is On The Move
Passion, Teamwork And Vision Create A Business Success Story…By Ellen McKoy
Nineteen-ninety-one was filled with notable highlights. “Dances with Wolves” was named best picture, the New York Giants won the Super Bowl, defeating the Buffalo Bills, the Minnesota Twins trounced the Atlanta Braves in the World Series and U.S. light-truck sales topped the four-million-vehicle mark for the seventh consecutive year. And in Independence, Missouri, an enterprising young enthusiast pursued his passion, opening the first of what would become one of the most successful truck accessory centers in the Midwest.
In the 19 years since Seth Gortenburg opened his first store in a shopping center fronting onto a busy thoroughfare, Chux Trux has expanded into a multi-store operation that now employs 29 staffers -- from installers and drivers to store managers, salespeople and administrative support -- who help him run three high-traffic locations that serve the Kansas City market with a vast array of accessories.
Though known for years as the place to go to personalize any pickup, Chux Trux has evolved with the times. While still very much entrenched in the truck accessory market, the company now has a more diverse focus that not only includes accessorizing SUVs and passenger cars, but that also generates substantial business from car dealer and fleet accounts.
Pursuing a Passion
According to Gortenburg there was never any doubt he would spend his life in the automotive industry. A self-described enthusiast and “old-car fanatic,” Gortenburg attributes his enthusiasm for all things automotive to early experiences tinkering in his uncle’s salvage yard and, later on, working in the auto parts store jointly owned by his parents and uncle. Following a brief college career, he opted to strike out on his own, relying on his innate talents and focusing his sights on what was then a burgeoning market for pickup truck personalization.
“I’ve always loved working with my hands, building things, taking things apart and putting them back together,” said Gortenburg. “I have a passion for cars and trucks, and I’ve always wanted to be involved in the industry in some way.
“Having worked in an auto parts store as a teenager, I knew the processes. Auto parts stores are really very similar to accessory stores. The only real difference is the installation. In the early ’90s when we started, trucks were really coming on strong, so I just decided to open my own store.”
His initial game plan centered on mini trucks, then in their heyday of popularity. “At the time, mini trucks were really hot, so that was my vision at first,” noted Gortenburg. But although his youthful target audience shared his enthusiasm, they often were pressed for cash.
“One of the common denominators that I didn’t think through very well was that mini truck owners were young, mostly 18 to 25,” he said. “They would come into my store, but not spend any money. So as anybody who’s started a business will tell you, you do whatever you have to do to pay the bills.”
Fortunately for Gortenburg, the solution came about in an unexpected way. The young men’s fathers began coming to the store, asking for accessories for their full-size pickups. And from there, he said, “The business just evolved.”
The company’s core products quickly expanded to include virtually every type of truck gear. From running boards, side steps, truck caps, bedliners and soft tonneau covers to custom wheel and tire upgrades and performance enhancements to tool boxes, ladder racks and all manner of chrome add-ons, the list reads like an accessory catalog. Said Gortenburg: “I’ve always thought that part of being successful was being lucky, and we just hit at the right time. The demand was there, but there were very few people doing what we were doing at the time. “Back then, people tended to specialize in certain things,” he continued. “You could find a cap dealer or someone who just sold wheels and tires. We took a broader approach, selling everything that involved a pickup truck.”
On the Move
The approach paid off. Within four years, the small shop with its two bays and one garage door had grown too small to handle the ever-increasing volume of business. Gortenburg was faced with making a major decision -- either invest in a larger building and hire additional personnel or be content with the status quo. Not one to rest on his laurels, he made a quantum leap. In 1995, he moved the company into a substantially larger facility that had been built specifically to house an automotive center.
“Going from 5,700 square feet to 15,000 square feet was quite a shock for us,” said Gortenburg. “But back in ’95, the truck accessory wave was really strong. From a timing perspective, it was a good move for us.”
The store now serves as the company headquarters. It fronts onto a busy roadway, offering both easy access and high-profile exposure. The nearly 7,000 sq. ft. showroom is airy and awash with accessories, including an entire wall of shiny custom wheels along with artfully arranged point-of-purchase displays highlighting caps, bedliners and other add-ons. The remaining footage is allocated to warehousing and a six-bay installation area as well as administrative offices.
Over the years, the company has continued to hone its installation skills and focus on core products, building a reputation not just for bolt-on items but also for its expertise as suspension specialists. In the early ’90s, in keeping with the mini-truck trend, Chux Trux lowered quite a few domestics and imports. But after repeated customer requests for lift kits, the staff installed its first kit some years ago on a Jeep Comanche.
“One of the things we’re best known for is suspension work,” said Gortenburg. “But we were a bit timid with our first lift kit. We didn’t know what to expect. But we got through it okay and it just snowballed from there. Lifting is much more popular in the Midwest, and over the years, we’ve been dominant in that area.”
Throughout 1995 and beyond, as the truck market continued its upward swing, Chux Trux continued to thrive. Flash forward to 1999. Once again Gortenburg was preparing to expand his operation. He decided to open a second, 3,000 sq. ft. store in Overland Park, Kansas, and promoted one of his installers to serve as manager.
“These stores are not very easy to run. So my thought was to try a smaller footprint store that just focused on bolt-on installations—no custom stuff, no fabrication,” recalled Gortenburg. “I thought it would be easier to staff, because it wouldn’t require the same high degree of technical skills.” For the first six years, the operation was successful, but eventually it simply outgrew the location. In 2007, he closed the store and relocated to a 4,300 sq. ft. facility in nearby Olathe, Kansas. Prior to that, in 2005, Gortenburg had opened yet another store in the northern part of Kansas City.
In their early years, the satellite stores frequently funneled custom work to the main store in Independence. Over time, however, the installers became more proficient and were able to tackle more complex installations. “As time went by, they learned to do more difficult things,” said Gortenburg. “So both those stores today do 80 percent of what we can do at the main store, and the rest they send to us.”
While acknowledging that his expansion efforts have paid off, Gortenburg said the success is based largely on having the right ingredients. “I’d tell anybody who has a single store today, and is thinking of adding a location, that it’s a lot more difficult than it appears. It relies totally on your processes and systems. You’ve got to have good processes and you’ve got to have great people on your team. We’re fortunate that we have both.”
On the Cutting Edge
Having three facilities strategically located around Kansas City has worked to the company’s advantage. It has enabled Chux Trux to reach out to a broad base of retail customers who continue to generate the bulk of the company’s revenue. But the market has changed, and so has the accessory business.
While still heavily focused on traditional truck accessories, both the customer base and the product mix have evolved. For example, commercial fleet business now generates strong interest in and healthy sales of everything from toolboxes, ladders and racks to bed mats, mud flaps and fire extinguishers.
“There are fewer opportunities now, so we have to maximize the opportunities that we have. For us, that means putting greater emphasis on commercial fleet sales,” said Gortenburg. “We look for companies that have multiple vehicles, such as landscapers and contractors as well as fleets that have hundreds of vehicles.
“Growing the fleet business is a slow process and the margins are slimmer. It’s relationship-based and it takes a long time to nurture the business. But we’re in it for long haul.”
In keeping with the market’s evolution, there’s greater product diversity as well. Add-ons, such as leather interiors, sunroofs, window tinting and 12-volt accessories -- including DVDs, remote starters and security systems -- are now an integral part of the product line-up. While currently in the process of setting up a separate tint shop adjacent to the main store, Gortenburg subcontracts the restyling and 12-volt installations to another company, which works exclusively for Chux Trux.
At a time when cars are becoming the transportation choice for many vehicle owners, Gortenburg recognized the need to reach out into the car market and make customers aware that many of the products his company offers can be installed on cars.
He started by taking a two-pronged approach. To help re-educate consumers, the company logo was modified slightly on the newly redesigned website to highlight the name Chux and position Trux in smaller text below the name. The website description also talks about car accessories, as does the phone message when customers are put on hold.
Other outreach efforts include exhibiting at numerous car shows and local cruise nights. In recent years, many of the display vehicles have been accessorized cars. During this year’s World of Wheels, Gortenburg’s installers customized a Ford Mustang, adding a shaker hood, cat-back exhaust, lowering kit, pinstripes and custom wheels and tires in a series of on-site product demos.
To ramp up awareness among car dealers, there’s a dedicated outside salesman. His sole responsibility is to drum up wholesale business. The efforts have been so successful that car dealers now account for 25 percent of the company’s sales.
“We’ve really put an emphasis on our business-to-business side and focused on our car dealer sales,” said Gortenburg. “We have actually grown our car dealer business over the past couple of years, which means we probably weren’t doing a great job to begin with. Car dealers want accessories for what’s selling and trucks aren’t selling. Cars are. Dealers understand that and call us. Long term, this is definitely a growth area for us.”
Recipe for Success
The past few years have presented more than their share of challenges for accessory retailers. And there’s no question that the economic downturn has significantly impacted many of the industry’s players. How then has Chux Trux managed to maintain an even keel and stay focused? While acknowledging the economy is one of the biggest challenges, Gortenburg said many factors contribute to his company’s ongoing growth and success -- and his optimism for the future.
A great believer in people power and teamwork, he considers his employees to be the company’s greatest asset. At the core is a Golden Rule approach that embraces the company’s philosophy: do things right, do the right thing, under-promise, over-deliver and treat customers well so they feel important.
“Having great people is the key,” said Gortenburg. “We’re able to work as a team, which translates into great customer service, which means we sell more. Our success is directly tied to the quality of people we have.” To help ensure that new hires will be a good fit, Gortenburg relies not just on a “gut feel” for an applicant’s compatibility and his references, but also on the person’s enthusiasm for the job -- whether or not he’s a “car guy.” But the deciding factor is a standardized test that measures personality traits deemed desirable by most employers, such as honesty, integrity, dependability, teamwork and work ethic.
“The test helps us gain insights into a person’s character,” said Gortenburg. “The testing isn’t cheap, but it’s so expensive to hire the wrong guy. It’s an investment, but it’s probably some of the best money we’ve spent. “When I started, I talked to every customer, whether on the phone or in person, so it was easy to control the quality. But it gets to a point where you can’t do that anymore. So it’s important to staff your company with people who will treat customers well. Because the margins in this industry aren’t the greatest compared to other industries, we can’t afford to overpay our people. So in lieu of that, you have to cultivate a terrific culture. If you do that well, it’s a recipe for success.”
Beyond cultivating a cohesive team, Gortenburg has invested in his company’s future in other ways. At a time when many companies have hunkered down and drastically reduced their marketing efforts, Chux Trux actually increased its marketing presence.
For instance, there are more frequent direct-mail promotions to existing customers. To assess their impact, the results are tracked to determine which store sold the most products and which products were the best sellers. Gortenburg also partnered last year with some of his suppliers to run targeted promotions on local sports-talk radio stations.
To improve inventory control, purchasing and accounts receivable processes, and improve efficiencies long term, he also invested heavily in a new software system. “We needed to get up to date,” said Gortenburg. “It was a major investment and, of course, there’s a learning curve. But in the long run, the new system will make it easier for us to sell things and to manage the business a lot more effectively.”
Tough times also call for tough measures. Recognizing the need to adjust expenses wherever possible, Chux Trux also implemented several cost-saving measures. Bottled water has been replaced with water coolers in each store. There’s a new phone service and uniform provider, both less costly. To cut down on paper costs and usage, employees are asked to print rough drafts and other throw-away documents on both sides. In short, every effort was made to reduce or purge expenses. The resulting efficiencies helped provide the resources to maintain staffing levels and increase expenditures where they were needed most.
At the end of the day, it’s all about positioning the company for the future. “Nowadays,” said Gortenburg, “people are less likely to part with their money, so we constantly have to reinforce the fact that we’re here for the long haul. We got to where we are because we take care of our customers, have terrific people and made some good decisions. We went into this knowing we were going to invest the money and that things would be tight for a while. But, ultimately, we will come out of this stronger and be in a great position once the economy turns around.”