P&A hits the road with Bill Kelly of Automotive Development Group, a division of Brown & Brown Insurance.  - Photo Courtesy of Automotive Development Goup (div. Brown & Brown Insurance)

P&A hits the road with Bill Kelly of Automotive Development Group, a division of Brown & Brown Insurance. 

Photo Courtesy of Automotive Development Goup (div. Brown & Brown Insurance)

Last year, Brown & Brown Inc., the sixth-largest independent insurance brokerage firm in the nation, acquired Automotive Development Group, the Minneapolis-based agency founded by Joel Kansanback in 2002. Bill Kelly joined ADG as a partner in 2004. P&A met with Kelly to ask how the deal went down, discuss the values that underpin ADG’s success, and learn why knocking on doors will never go out of style. 

P&A: Bill, were you looking to sell your agency or did the opportunity come out of left field? 

Kelly: We really weren’t looking to sell but the opportunity wasn’t totally out of left field. I had met Mike Neal from Brown & Brown at an industry event. He contacted me a few months later to see if he could come sit down with Joel and myself to talk about how we could grow our agency and they could grow their distribution business. 

P&A: What did they like about your agency? 

Kelly: I think they liked the way Joel and I operated the business. We take a much different approach to F&I than a lot of agents out there. We put an emphasis on income development and training and doing a true needs analysis for every dealership. We represent a number of administrators and we’re able to look at which administrator will work best for each dealer. 

P&A: Does that complicate things? 

Kelly: At the beginning, some administrators would have preferred we only use them or work with a smaller number. But our partners were all doing well. They saw Joel and I had great income development in the dealerships. We were leading year-over-year growth among all agencies for a number of different companies and they started to realize maybe they shouldn’t be too upset. 

And that’s where Brown & Brown saw us, moving up the rankings with our carriers at the same time, including carriers they were representing. It was a natural fit for us. Joel and I were operating in 16 states and wondering how to get our training recognized on a national level. Doing a strategic partnership with Brown & Brown made the most sense for us, our employees, and our dealers. 

We now have more resources in all aspects, everything from employee benefits to garagekeepers insurance. We can introduce ourselves as having the ability to give the dealership total coverage. That’s the best part about it, really. Brown & Brown has gone out and made other acquisitions, but they’re being very selective. It’s not about trying to get the biggest dollar but trying to find the best fit. 

As the F&I world and the automotive world evolve, we need to look at where it’s going to go. How are we going to get ready for the changes coming up? We felt the best way to be ready for whatever comes at us is being part of a bigger organization. With Brown & Brown, we can handle larger dealer groups and megadealers all the way down to single-point stores. We already had some groups that operate in four or five different states. But the strategic purchases Brown & Brown has made in Texas, Boston, Minneapolis, and Ohio are really giving us a larger footprint. 

P&A: Does having to answer to new partners change the way you run the business? 

Kelly:  As you transition into working essentially as an employee of a big company — they now have about 10,000 employees across the country and I think they were at just under 9,000 when they started talking to us — you realize it’s fun to be part of a growing organization. And we really don’t feel we gave up our independence. We still have the freedom to run our business the way we want to run it. The people we answer to at Brown & Brown are not interested in running our day-to-day business. 

It’s a very competitive marketplace out there. Anything we can do to set ourselves apart and do more for our dealers will be a real advantage. In our training initiatives, we work with the BDC, sales, sales management, F&I, and service. We really complete the whole circle. 

P&A: What’s your secret to effective training? 

Kelly: One thing we are doing differently is all the trainers we use are employees of ADG/Brown & Brown and they all have real-world experience. Our fixed operations trainers are people who worked as mechanics and became advisors and service directors. They can really get in and roll up their sleeves and identify areas that can be fixed and trained on. 

A lot of our employees have been general managers, finance directors, and even partners in dealerships. We go out and find the best of the best. We’re not just going in on ideas and thoughts. We live in a practical world, so we’ll keep plucking people out of retail. They’re used to long hours. And I don’t think they work less when they move into consulting, but the hours are certainly different. 

P&A: You mentioned your training touches every department. Where do you stand on selling F&I in the service lanes? 

Kelly: There’s a lot of chatter about selling F&I products in the lanes. Right now, we don’t do a whole lot of product sales in the lane. We do have more product awareness in the service lane, very similar to the sales side of it. It’s the meet-and-greet and the process it takes to identify the needs of potential F&I customers when they come into the service drive. It’s more about creating an experience where service is aware of the products being sold. Will we see more products sold in the drive? Eventually. Right now, it’s such a small amount, it’s not even trackable. A lot of people have tried service-drive service contract plans. Some have had success with it. Most have not. Will we have to get there? I think so. 

P&A: Why so? 

Kelly: The more opportunities we have to tie our customers back to the dealerships where they’re servicing and purchasing cars, every touch we have with the customer at the dealership, there’s a need to find way to earn that customer’s business. That retention will help keep dealerships going. So, it will be natural to find the right products and services to offer in the service drive. We just need to create a service-drive plan. 

P&A: What about sales and F&I? Trainers are telling dealers to tear down their silos, for the sake of compliance if not production. 

Kelly:  I’m a firm believer that sales and F&I have to work hand in hand and that you do tear down the silos and you do start the F&I process the moment the customer walks into the showroom, onto the lot, and even onto the website. If that means introducing F&I products earlier, introduce them earlier. But it’s all about retention. 

P&A: How did you get into this business? 

Kelly: I grew up in the car business. I started working in dealerships as a porter. My father was an attorney. He represented dealers and he wrote the Illinois Motor Vehicle Franchise Act, which is still in place today. I worked for some of his clients and one of them suggested I talk to Western Diversified, who was purchased by Protective. At the start of my ninth year with Protective, I decided to leave them and join Joel at ADG. Together we spent 15 years building the agency one dealership at a time, always with an emphasis on income development. We wanted to give dealers the professionalism of “big box” established trainers but with all the flexibility you get with a smaller agency. 

P&A: How did you connect with Joel? 

Kelly: A family friend of mine had worked with Joel and said, “You should meet Joel Kansanback, he’s doing what you’re looking to do.” Joel and I met up and the rest was history. It took a lot of work, but it was good, hard work. It’s not easy to represent the number of administrators we represent and represent each extremely well. That’s just a testament to our core values and what we do. 

P&A: What advice would you give to agents who want to follow your lead? 

Kelly: You have to have good working relationships. You don’t beat up your product providers. You lean on them to be the best they can be. Be open and honest. Let them know what you’re thinking. When you bring a deal to them, don’t just shotgun it. Margin compression is a huge concern. We all have to be cognizant of the fees and costs. But ultimately the best working relationships are being honest with your provider about what you’re looking for. You also have to know the strengths of each provider and where they’re comfortable. 

We feel we put providers in a position where they can succeed with our clients. You get a good idea of what each provider is good at. We just have to continue to do what we do best. Cold-calling is still a big part of our business. Knock on enough doors and turn over enough stones, and you’ll find more dealers. Service the dealers and take care of the providers that take care of us. 

P&A: Any predictions for 2019? 

Kelly: I think we have to be equipped and ready for change. We have to be able to listen to and identify new trends. We have to rely on our expertise and knowledge, but not get so wrapped up in how we used to do things. We have to be nimble enough to help our dealers today. There’s going to be ridesharing, there’s going to be electric cars — all sorts of things that will slow car sales down to a point where we’re not going to see the big growth we saw from the depths of 2008 and 2009 to now, where we went from 12 million to 17 million SAAR. But we are going to see consistency in small, year-over-year growth. 

But there are a number of dealers out there who could be doing better. For them, we need to focus on the fundamentals. So we’re not totally abandoning everything that got them where they are or got us where we are. We’re keeping an eye out for the things that may change and we will be quick to change when we have to. We’re still in some exciting times in the industry. I’m looking forward to being here for the long haul. Through our partnership with Brown & Brown, we will add more dealers and take care of more people. 

P&A: How’s life outside the office? 

Kelly: Well, my wife and I have twin daughters, 14 years old, freshmen in high school. My wife owns a retail clothing store in a local mall here in Minneapolis. We’re kind of a retail family. We like to embrace the outdoors and travel. We like to ski in the winter and explore in the summer as a family. My wife runs a lot of marathons. I did two and stopped. She’s up to 12 now, just completed Berlin and training for her fourth Boston marathon. 

P&A: That’s impressive. Do you recommend marathoning? 

Kelly:  No! It was a great thing we started doing together. I had to stop, I just didn’t have the time with all my travel. It’s just like anything else. It’s preparation. You need to properly prepare in order to do anything. I still try to work out and maintain a little bit of fitness in my life.

P&A: At least you can say you ran a marathon. 

Kelly: Well, I had to run two before I stopped. My wife said anyone can do something once. If you persevere and do it again, you get to count it. We are a very competitive family, but we have fun with it. We work hard, play hard, and sometimes just hang out at the house. The four of us have a lot of quiet nights at home. I’m on the road two or three days a week. In retail, they’re open seven days a week. It’s important to take a step back and get some family time. 

P&A: I’m impressed you’re still doing all that traveling and still knocking on all those doors. 

Kelly: There’s no better way to stay relevant. There could be nothing worse than meeting a dealer and not knowing what’s going on in their world.