Hammond Group: Dealer sets sights on
growth

Brian Rogerson visits the Hammond Group to find how it is using
technology to help it through the current market downturn
 
 
 

As a family business with limited resources in staff and
capital, the medium-sized East Anglia-based Hammond Group has
achieved much with tight management control and adept use of
technology. Implementation of the Automaster dealer management
system (DMS), for example, has allowed management to maximise
accounting control, cost efficiencies and customer retention.

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Alan Reeve, Hammond Group’s financial controller explains that the
dealership had previously used KBA Computer Systems’ DMS. He says:
“When that company was acquired in 2006 by Automaster Oy, a major
European DMS vendor, we found the acquirer company provided an
excellent fit. The Automaster DMS has exceptional flexibility and
is strong in managing multi-franchise dealerships.”

Family foundation

Hammond Group was established in 1962 by Roy and
Daisy Hammond in the small village of Wenhaston, near Halesworth,
Suffolk. Initially, the company started with Singer and Triumph
franchises. The Hammond family’s local reputation for honesty and
integrity led to steady growth, and the Ford franchise was obtained
in 1976. The company remains a family business and is now run
jointly by Derek and Glen Hammond together with the founder
Roy.

Growth continued with acquisition of the Nissan franchise in 1984,
Land Rover in 1992 and Isuzu in 2004. With the businesses now
centred in Halesworth, a 45,000-sq ft accident repair centre was
opened in 1992, a Roadcare operation commenced operations in
Dereham, Norfolk in 2001, a new and used commercial vehicles sales
business in 2005 and CarSave, an other-makes used-car operation, in
2007.

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Turnover to grow

Derek Hammond, the group’s co-managing director tells Motor Finance
that the group is aiming for a turnover of £50m in 2007 – some 15
per cent over 2006, with a sales target of 2,500 new and used
units.

“The company has grown rapidly, especially in the last few years.
Much of this has been achieved by continuing to re-invest in the
company. Our recent modernisation programme has seen major
improvements in our premises and a constant expansion of our
activities. In this business you can’t stand still – if you do you
go backwards,” Hammond says.

Reeve, who won the Motor Trader Business Management Award in 2004,
joined the group in 1996, having previously been an audit manager
in a firm of chartered accountants of which Hammond Group was a
client. When he joined the company he set about re-organising the
accounting and administration functions in the company to improve
the reporting systems and the quality of management
information.

“The implementation of Automaster,” he explains, “ensured that all
disparate operations within the group were brought together under
one roof – and we were able to achieve accounting control of the
businesses together with uniformity and better management
reporting.”

Countering direct lenders

Reeve also helped introduce a staff appraisal programme and
personal incentives. Customer relationship management (CRM) rides
on the back of Automaster. Hammond says: “The system allows sales
staff to locate a prospect quickly and then create a task for the
prospect – such as arranging for a test drive, brochure or a
follow-up telephone call. Sales managers can thereby monitor the
effectiveness of each staff member.”

As elsewhere, finance and insurance (F&I) income has been hit
in recent months by various factors – not least of all by the
activities of the direct lenders. “We have been working hard at
improving our F&I income,” Hammond notes. “We have the training
skills of our first-string lender, Capital Bank Motor, to thank for
that. We now believe that we have both the tools and the toolbox at
our disposal to combat the direct lenders.”

Being based in a small town in a predominantly rural area presents
its own challenge for any business. Hammond explains that customer
retention is a paramount consideration for the company. “With a
limited population immediately available we have to make it easy
for customers to do business with us,” he stresses. “To persuade
customers to travel the 30 miles or so from Ipswich or Norwich
needs an added incentive. Reputation and good service standards are
crucial – but other marketing skills are also needed and CRM
techniques help here.”

Small fleets on the agenda

The group is also actively canvassing the small-fleet sector and
employs a business development manager whose task is to sell to
small- and medium-sized enterprises. “We also have a large rental
fleet and we maximise after sales and workshop business – which can
often lead to new car sales opportunities,” says Hammond.

Similarly, the group’s website effectively gives it national
coverage, especially for used car sales. Hammond confirms that so
important have website sales become that the company is
increasingly moving its marketing spend towards web development as
opposed to traditional media advertising.
Both Hammond and Reeve are united in their view of what constitutes
the group’s recipe for success. These include quality and low
turnover of staff, stability of management, making your location
work in your favour, and constantly re-investing – even when times
are hard.