An Interview with John Braganini

When John Braganini, principal, Great Lakes Companies, founded the organization in 1987 with Ed Overbeck, the mission was to provide income development services to dealers – a mission that has not changed in the years since.

Braganini got into the agent business when he was 33 years old. In his 20s, he had spent a great deal of time in retail, financial services and management positions, and his goal, before he founded Great Lakes Companies, was to find a business that would allow him to leverage everything he had learned in all those positions. He did not want to go back to retail, and he knew that he wanted to find a different way to distribute insurance products and generate financial service fee income. At the same time, F&I was starting to take off in automotive dealerships. “I had the right skill set for some of the trends taking place in the way cars were being sold and financial services were being offered,” he noted. “The rest of it was timing; I got into the F&I industry right as it was starting to take off.”

He also knew that he wanted to be in business for himself. “I started in business for myself in my 20s, and had never worked for anyone else. I had no interest in working for anyone else – I always felt the company I worked for would be more successful if I was running it,” he joked.

And the timing worked out well for his business partner, too. He had met Overbeck, a former marine dealer, right around the same time. His family was selling that business, and Overbeck was looking for his next opportunity as well. “I wanted to leverage skills he had as a dealer, because I didn’t have dealership experience,” said Braganini. “I wanted to take advantage of his skill set, and I always enjoyed having partners – I am not a lone wolf. I like to share responsibilities, have other people helping me out, and I also enjoy helping other people.”

He noted that they have changed products and product configurations over time, to adapt to the changing needs of both consumers and the dealers, but income development has remained their core focus. “We find solutions for dealers to generate additional income in sales of incremental products,” he noted. “We have never moved from that, and we have been successful because of that – we’ve stayed on point.”

The Product Mix

The core products, Braganini noted, have always included things like vehicle protection services, mechanical service contracts, tire and wheel, windshield, dent and ding, etc. He doesn’t believe there are any major new product categories on the horizon, but that dealers are beginning to demand more than just products. “I believe the current product options are adequate, but dealers are seeking more effective management and training systems,” he said.

Great Lakes Companies, he noted, does administer some of its products via its own separate company. It also manufactures some of its own products, allowing Braganini to tightly control the quality of the offerings all the way through the product lifecycle. He admits, because of that, they have chosen to focus their efforts in a more limited geographical area – most of his business is centered in Michigan. “Rather than having limited number of offerings in large geographic area, we chose to have a high saturation in a smaller area. And because of that, it is very difficult to compete with us in our area.”

He went on to note that, “We are active in every arena we want to be – every theatre we want to be playing in, we are playing in, so we’re not really watching new products at the moment. We are right where we need to be from a product standpoint. Things like sales, management, training and coordinating F&I processes we will be more involved with in time however.”

He does see a great deal of value in the partnerships he has with his providers – but he noted that they have to bring something more than just a product to the table to do business with him. “We have lots of business partners, but they have to have a value proposition that is unique,” said Braganini. “Something that provider does or has that makes them unique and gives them a sustainable advantage is what we’re interested in. Today that advantage typically lives in the form of some kind of customer service advantage, although technology is becoming more of a tool that can be used as a competitive advantage. For example, eContract solutions are attractive to us right now.”

Looking Ahead

For the future, Braganini sees the Consumer Financial Protection Bureau (CFPB) as the wild card. “What they do in the next 2-3 years will determine where the industry goes,” he noted. He believes that if the CFPB regulates the profit out of F&I products, there will be a declining value to both the dealer and the consumer, and it will force the industry to shift gears. However, if they leave the profits alone, he noted, F&I will only continue to get better.

His opinion is optimistic on that front. “Products will perform more effectively, the handling of financial components will become more efficient, and training and performance at the dealership level will get better,” he predicted. “I think we will end up in a better place with the regulatory environment. Some of the objections they have will make our industry better and will limit the scope of players in the industry. As regulations become tighter and more comprehensive, it will be harder to be a provider in our industry and I believe compliance requirements will make us more effective. ”

And agents in that environment he sees as being just as important to the industry as they are today. He does see them as breaking into several categories, however. “You will have product agents, service agents and income development agents, and the income opportunity will be greatest with income development agents. Service providers will be number two in the pecking order, depending on service they provide, and product vendors will probably go away over time.”

Overall, however, Braganini is excited about the way the industry is moving forward, and he is excited about where it will go next. “Our industry is outstanding today,” he said, “and I don’t think we’re falling down anywhere.”