An Interview with Patrick Donahue

A year and a half ago, Patrick Donahue, owner, Agents Management Group (AMG), had a very different job — he was president of several companies within The Warranty Group, a company he had been with since its beginning as Pat Ryan and Associates in the 1970s. He was there as that company grew and spun off in several different directions, but his passion was and remains the profit center that Pat Ryan helped to create – the Finance and Insurance department.

Today, he has gone on a slightly different path. He was looking to remain in F&I, but he wanted to approach it in a new way, with a new challenge. So he formed Agents Management Group, a holding company with the express purpose and finding and acquiring top agencies, and helping them grow. His first acquisition was David Gavin & Associates (DG&A), a 25-year-old firm with, Donahue noted, sustainable volume and long-term relationships he felt he could leverage and build on. He believes he can take his years of experience and translate that into the agency model.

“The process of growing from a modest regional player to a vast multinational company provided endless opportunity,” Donahue said. “The industry exposure, skill requirements and constant challenges provided invaluable preparation for the velocity of today’s F&I landscape. As president of several Warranty Group companies, managing through change and accountability for results became core disciplines. These techniques apply equally to any size organization in every phase of growth.”

Through DG&A — which is just the first of what Donahue hopes will be many agencies operating under the AMG banner — he sells a comprehensive line of products. These include service contracts, GAP, pre-paid maintenance and reinsurance services.

“Products are evaluated and selected based on how well they complement our core business,” said Donahue, “how they can enhance the performance of our clients profit center and how they provide a defensive barrier to prevent competitive influences from invading ‘shelf space.’”

When it comes to adding products, he noted that there are always new things hitting the market, on a daily basis at times. He, and his agents, review every product, looking for the pros and cons, and do their research to know not only how it would impact their dealer clients, but what kind of value it would bring to the end consumer as well. “A competitive marketplace and savvy consumer reactions quickly sort the winners from the losers,” he noted. “Product offerings that are attractive only for the revenue they generate are rarely viable or credible long enough to become an industry standard.”

But his strategy goes beyond simply choosing what he believes are the best products. While that is a big part of the equation to success, he notes it’s not the only factor. The difference between a great agency and a poor one, he pointed out, is rarely just a product or service issue. “Strategically, we remain focused on anchor accounts that have the size and reputation we can leverage,” he said. “We focus on elements of our value proposition that are unique, and methodically expand deeper product relationships in accounts while mining referrals and testimonials to capture new market share. We remain disciplined on both sides of our balance sheet, and do not attempt to make our year from a single product, client or market windfall. We manage our resources conservatively; invest in technology, training and opportunities that sustain margins and fiscal health.”

Training is Key

As for training, he has found that technology plays a very real part in how that segment of the agency business has evolved. It makes training more accessible, with a winder range of skills and topics available to agents and dealers to draw from. “Agents are fortunate to have many training options through product and service providers,” Donahue noted. “Course schedules are published and topics cover the range of general industry and agent-specific material. There are industry-sponsored events with a variety of seminars to select from throughout the year. The use of Web-based training, remote site and classroom choices allow the selection of topics and timing for training convenient and efficient.”

He looks for a specific list of topics when it comes to the training opportunities:

1. Compliance updates and changes;

2. Product knowledge;

3. Sales and marketing strategies;

4. Best practice benchmarks; and

5. Agency specific “value propositions” (training done in-house)

At the end of the day, Donahue believes it is that combination of experience, talent, product and training that can grow an agency. Knowing what you do well and then continuing to improve on it; making certain the value proposition is both unique and clear; and then delivering measurable results are the secret to success in this and any other business. “Having a ‘vision’ is a great start,” he said. “Having a solid business plan, forecast and budget including the resources to execute are essential.”