By Matthew Spieler
KISSIMMEE, FLA.—When times get tough, business owners not only need to make tough decisions, they need to change their way of thinking so that when times do get better theirs will be the store where consumers come to shop.

“We can let tough times define us or be the catalyst for change,” said Jeff Lorberbaum, chairman of Mohawk Industries, at the mill’s annual ColorCenter dealer convention here. “The future rests in your hands, but Mohawk is here to help.”

With that the mill presented to the 800 members in attendance its formula for them to achieve their individual “Quest for Success.”

Manny Llerena, Mohawk’s vice president of retail marketing, said the focus is to make each member more profitable through use of the ColorCenter program. “The end result is for them to have increased sales, increased margins and higher profits.”

While the process for this began about 10 years ago, he said the group is entering the next phase of this strategy. “ColorCenter is more than just displays, products and marketing,” noting the membership is onboard with these concepts, and ready to take the next step toward increased profitability.

To get there, Mohawk, in partnership with ColorCenter’s Dealer Advisory Council, has developed a seven-point “Key Business Practices” strategy that not only allows retailers to benchmark and compare themselves to their peers, but gives them the tools to improve in all facets of the business to achieve greater success.

“We’re trying to get dealers to talk about profitability,” explained Tim Gray, Mohawk’s director of retail marketing. Initial research shows the average margin among the membership is 34.5%, while the top 20% of dealers work on margins averaging 41.6%. “So how do you get the average to the top? What are they doing that makes them successful?”

Noting how many dealers do not know how to properly track the various numbers from their operations, such as cash statements, or creating annual plans to follow, “we’re trying to help them better understand their business and then build upon this knowledge.”

Llerena added, “With business as challenging as it is, focusing on the fundamentals is more important than ever. That’s why we’re giving dealers a whole new understanding of how their businesses operate. We’re providing techniques that let them analyze their true profitability and how they can start immediately to enhance it. We’re also showing them how not just to gather knowledge, but to truly change their behavior so that knowledge is successfully applied.”

Mohawk’s seven key business practices are convention, training, technology, consumer credit cards, co-branded advertising, store signage and merchandising. Mike Faust of Carpeting by Mike in Somerset, Wis., said the support Mohawk is giving on how to do business is “outstanding. There is no way I could do it by myself. Mohawk is doing things to make me a profitable business and not treating this like a hobby.”

Llerena highlighted the rational and importance of each point in terms of why they are crucial to a dealer’s success. Research has shown that attending the annual convention “is the single greatest way to capitalize on the ColorCenter program investment because they not only see what’s new from Mohawk, they have access to free training and can network with some of the best minds in the business.”

One of the newer items introduced was the creation of a networking system between the group and the mill. All ColorCenter members were assigned their own “@mohawkcolorcenter” e-mail address, which will be their primary source of correspondence from Mohawk—and for peer-to-peer communications. Prior to this, Mohawk communicated to members through various accounts and addresses. Now, there is one, easy-to-access, secure place to go for information. And this is just the start, said Traci Powell, senior communications specialist of retail marketing, noting the plan is to expand the concept to Web sites and various other networking opportunities.

Gregg Karas of Floor Covering Warehouse in Stamford, Conn., agreed with how important convention is to his success. “I want to get as much knowledge as possible and see what direction Mohawk is moving in, and this is the place to do that. I’ve been doing this for 50 years, but Mohawk has a tremendous amount of knowledge and a wealth of resources I can tap into. But, it’s the dealer that has the experience, and here, I can talk with others like me and if they say something from Mohawk is working it gives me the confidence to do it.”

When it comes to training, Llerena, said no one in the industry does more for its employees and customers, noting how the company was ranked among the top 20 corporate training organizations in the nation (see story on page 11). ColorCenter dealers get one free class from Mohawk University each year, not to mention the free training at convention, as well as other opportunities for them to gain knowledge.

Taking advantage of the new e-mail system also falls into the third key business practice, technology. “Research—and more importantly, dealer experience— show that a retail computer system and high-speed Internet connectivity are critical for knowing and tracking all costs and profitability,” said Gray. These tools save time and money on administration and help eliminate costly errors and mistakes.

One of the most underutilized practices is the use of credit, especially the kind that is private labeled. Llerena said the average cash sale is $600; the average bank card sale is $750, and the average Mohawk Aligned Dealer Credit Card sale is $2,600. Mohawk also ties financing into special sales events. “This is a tool that increases average tickets and improves cash flow.” He added the mill even helps dealers further enhance their credit sales by using tools created by Mohawk University to teach salespeople how to use credit in their ales presentations.

Co-branding and store signage can work hand-in-hand as the concept is to take advantage of Mohawk’s national marketing efforts by combining them with the strong reputation a member has in the local community.

“This adds even more legitimacy to your business,” said Llerena. “It works both ways— Mohawk spends millions of dollars each year advertising to consumers, and they make a connection between Mohawk and your store, thus differentiating you from your competitors. The value of the Mohawk name is truly cherished outside the industry.”

Paul Allen of Mallery Carpet & Flooring in Glen Burnie, Md., agreed with Llerena’s assessment. “Consumers know the Mohawk name, and it adds credibility to my business. It allows me to go from a local store to one that has ties with a national name.”

The final element is merchandising. Considering a consumer decides whether to buy from a store within the first 20 seconds of entering, it is critical to have the entire place in order and consistent, especially when tying into a national presence such as Mohawk and ColorCenter.

“Clutter and disorganization create customer confusion and uncertainty—the ultimate sale killer,” Llerena noted. Taking advantage and utilizing these key practices, can mean the difference between failure and significant increases in profitability, he said.

Like many of the members at this year’s convention, Karas could not agree more. He runs a third generation family business that has been around since 1934, but it wasn’t until joining ColorCenter six years ago and then becoming an Elite member three years ago that he regained his passion. “I stuck to the program and listened to other dealers and asked what worked and then followed the advice. Basically, Mohawk gives us the pieces to the puzzle and we put it together. Mohawk is like our coach.”