He’s the son of a successful car dealer, but Andrew Walser, CEO of Walser Automotive Group, hadn’t always planned on joining the family business. Instead, Walser first looked to make his career on Wall Street. Before he could get there, he started selling cars during summers home from school at Arizona State University. Car sales turned into stints in service, finance, and eventually management. Walser committed to a career path in the automotive industry by his mid-20s. In 2017, Andrew Walser succeeded his brother, Paul Walser, as CEO of Walser Automotive Group.
Today, the group has 25 rooftops featuring major and luxury brands across Minnesota and Kansas. Walser Automotive Group was named in the top 150 dealer groups in the U.S. by Automotive News in 2017.
In the interview below, Walser talks about the benefits of, what he calls, “collapsing time,” and the importance of selling and servicing cars from the customer’s perspective.
Thanks for agreeing to talk with us, Andrew. Tell us about your rise to CEO.
My dad started Walser Automotive in 1955, but I never grew up as a dealer’s kid because I lived with my mom. I knew my dad was a car dealer who worked hard and was very entrepreneurial, but that was it. After graduating from college, my dad said, “What are you going to do now?”. I wanted to be in the financial markets, but he suggested I try out some different parts of the business while I was thinking about it. I had already sold cars when I was home from college. He thought it might be a good idea to spend some time in the service department. After a year in the service department, I moved into F&I. That’s when I fell in love with the business. From there, I worked my way up to new car manager, used car manager, and general sales manager. In 1997, I became general manager of our Mazda store in Bloomington, MN. After three years there, I took on a larger responsibility with oversight of four dealerships.
Walser became a “one-price” dealer in 2001. Why did the group move to this model?
We started looking at everything through the customer’s eyes. It sounds cliché, but it’s really true. We wanted to simplify the purchase process and eliminate the back and forth that slows the process down. This means customers start their shopping experience with us knowing they’ll never have to negotiate the price of a vehicle. Being a one-price dealer is about making the process faster and easier for the customer. Most customers don’t want to haggle over price, but they expect it to be fair.
You’re highly focused on a concept you call “collapsing time.” Explain what this is and how it serves customers.
Most customers will tell you that it takes way too long to buy a car. That’s because the sales process in most dealerships is built for the dealer and not the customer. We moved to a one-price model and removed the finance office so that the sale can be completed by a sales executive from beginning to end. Once a customer has decided on a vehicle, our sales staff can complete the paperwork immediately without waiting to talk to a finance manager. By eliminating this step, we cut about 90 minutes out of the overall deal time and improved our CSI. Our sales associates went from selling 10 vehicles a month to 14.
When I talk with other dealers about removing the F&I department, they naturally have concerns. Dealerships today depend on F&I income to support the bottom line more than ever. Our goal was to collapse the time it took to complete a deal even if that meant our PVR would go down.
Today, our F&I PVR is 35% higher than it was when we had traditional F&I managers. It’s a great example of how profit always trails when you do the right thing for the customer.
Let’s talk about finance for a moment. Tell us about your FUSE product and how it’s working.
Every single vehicle sale at Walser goes through our proprietary software called FUSE, which stands for Finance Under Secure Environment. What we learned rather quickly is how many different software applications salespeople had to work with in order to complete a car deal. We created FUSE so salespeople could live in one software system. By creating the software, we eliminated duplication of entry and automated many things that used to be done manually.
That one-price model has also played into your recruiting strategy. How has this helped attract new talent?
In 2011, we went to a one-price, one-person model. We saw this model as a way to attract a different kind of candidate. We replaced commission pay with hourly compensation and a 40-hour work week. Moving away from a commission-based pay structure allowed us to recruit enterprising college graduates and millennials. Our focus was to attract candidates who are career-path oriented and loved working in a team environment.
What is your marketing strategy, especially regarding digital?
Eighty percent of our ad dollars are spent on digital and social media. We are also focused on relationship marketing, leveraging our CRM, and engaging the customer throughout the entire lifecycle. We all know that sales sells the first car and service sells the next five.
Please talk about the in-house tools you’re using, such as CRM and DMS.
Our sales staff only has to be trained in two software applications – FUSE and CRM. Software for CRM requires constant training in a dealership, and that’s why we have four full-time trainers who continuously train new and existing sales staff.
What is your management philosophy?
We promote and live by these four core values: display a positive attitude, lead by example, be open-minded, and do the right thing. All of our employees need to embody these values to be successful at Walser.
What do you see as the major technology issues facing dealers today?
Software is very fragmented in the automotive industry. Every software provider is solving just one piece of a larger, complex problem. Because we have 25 rooftops between two states, we are working with our CRM to create one customer record that details each transaction from any of our stores and lets us identify who are best customers are. The challenge is making those systems work as one within your sales process and your DMS environment. In our business, there is too much duplication of data entry and not enough automation. We are partnering with the right software vendors to make sure information seamlessly pass back and forth through FUSE and our DMS. That’s a challenge. If you talk to most dealers and ask how many software companies they use outside of their DMS, the number is staggering. I don’t know of any other industry that has this problem.
What’s ahead for dealers over the next decade?
Dealers who are thinking about the customer first and improving the buying experience will be the ones that succeed. That means focusing on collapsing the time it takes to transact and building more transparency into the sales and service process.
If you had to choose one word or one phrase that best describes your experience as a car dealer, what would you choose?
Speed of change. I’ve been in the business 32 years, and every year the pace of change seems to increase. They’re saying the next five years will have as much change as the last 50. We need to continue to innovate to meet the needs of the consumer tomorrow.