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- Humbled, sober, and scaling to $1B a year—the faith-driven rise of a 5th-gen auto dealer
Humbled, sober, and scaling to $1B a year—the faith-driven rise of a 5th-gen auto dealer
Featuring Andrew Dahl, President of Dahl Automotive
Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter.
Today’s guest is Andrew Dahl, President of Dahl Automotive, a 12-store new car franchise dealer group based in Wisconsin and Minnesota, who discusses why 'entitlement' almost ruined a 5th-generation family legacy, how he found a higher power to change his life, and what’s next for his group.
1. Family legacy can have its pros and cons.
Andrew entered the retail business riding high on a sense of entitlement (being a fifth-generation dealer), which he quickly was forced to reckon with after making some poor life choices.
“It was an embarrassment to my family. And I got completely broken. I was dealing with a lot at that time and just partying, living it up, which I think a lot of car dealers’ kids can probably relate to. I actually asked God to help me... And slowly, through that process, after getting completely broken and surrendering to something bigger than myself…I just had this…awakening about my family's business, that this business isn't about me.”
The experience gave Andrew an entirely new purpose in life and the way he approached the family business.
2. Life experiences can be hugely beneficial in the business.
One of Andrew’s first big steps after his personal reckoning was to expand the family business to better serve the dealership’s team, families, and the community.
“…It really…put us on…kind of…a rocket ship (like), hey, ‘We need to take this and grow it from what we had at the time.’ We were just a single-point store at that time, even though we had grown and compacted.”
The high expectations associated with being a generational dealer can present some unique challenges. However, that long-standing connection can also be a great source for driving business growth if channeled the right way.
3. The value of legacy goes well beyond the numbers.
The true power of legacy is the impact that it has, first and foremost, on a dealership’s team and their families and, secondly, in the communities in which they do business.
“If you look at the communities that are really thriving, typically you're going to find a car dealer in the middle of that community that gives back, that meets (a) real community need, that's involved in the community.”
That sense of community connection is what makes the franchise dealer model great and successful.
4. Embrace the ups and downs of the legacy journey.
One of the biggest benefits of a generational business is the ability to learn from past mistakes.
“We've had the typical car dealer issues that happen with generational family businesses. People have been taken to court; siblings don't talk to each other for…10 years. We've had all of that happen in past generations. And so the first thing is like, ‘Hey, how do we not have that happen again?’”
The lessons learned in the business throughout five generations have enabled Dahl Automotive to better manage a lot of challenges associated with the business.
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5. Start with your base when aiming to grow your operation.
Dahl Automotive’s early growth strategy focused on increasing the company’s footprint regionally in La Crosse, WI, which is where the company is based.
“We started with one point, and then we opened an open point for Hyundai…And then we started acquiring stores in our immediate region...every couple of years.”
The dealership group’s growth has also been centered on partnering with the right OEMs and having the right talent, helping to nurture the next generation of leaders.
6. Thinking outside the box never gets old.
In addition to expanding its footprint, Dahl Automotive has found other ways to grow its operations and profit share with some unique vertical integrations.
“We're our own parts supplier rather than partnering with an aftermarket parts business…for used cars. Our express and our quick lanes will use our own parts. We partnered with Mighty Auto Parts…for that.”
Dahl Automotive sells about one-and-a-half used vehicles for every new one sold, so used cars are a big part of the dealer group’s overall business operations.
7. There are some benefits to ‘breaking tradition.’
Dahl Automotive spends about $250 on retail marketing per vehicle, which is about half of what the current industry rate is on marketing at the retail level.
“We're 95% digital. We're mostly doing SEM, SEO, (and) Facebook. And we're also we do a lot of YouTube pre-roll. We're big (on) Google. Most of our spend goes to Google, as most dealers do. We don't do much traditional advertising anymore at all.”
The dealership group allocates some dollars to local news in some of its smaller markets and spends considerable dollars on video marketing.
8. There are some benefits to ‘sticking to tradition.’
Dahl Automotive still finds huge value in some branding traditions associated with the business.
“We do the traditional sales event. It's March, so we (have) a March markdown sales event going on... We do that at each of the stores, both for used and for new.”
The group’s most valued branding traditions are centered on its team, pricing philosophy, and taking care of the community.
9. Stand firmly on what has driven your success.
Trust is everything for Dahl Automotive.
“Our business is broken in so many areas. Everybody's got a story about getting ripped off at a car dealer. ‘They upcharged me in service and stuffed me into a used car that I didn't really want. The payment I couldn't afford.’”
The dealership group’s vision statement is centered on transforming the way people think about the auto industry at the retail level.
10. The vision needs to be team-centered.
The future of Dahl Automotive is rooted in its team, not just revenue.
“My job is to share (the) vision with our team on why we're doing what we're doing. And it's not to grow Dahl Automotive to have this many sales or this much revenue. Yes, we have a goal that we're trying to get to, but it's the why. So, I focus a lot on the why and trying to have our team understand what that is.”
Dahl Automotive thrives on being “radically” transparent with its frontline team about the numbers to help grow all facets of operations.
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