MOHAWK BENCHMARKING INITIATIVE BENEFITS MEMBERSHIP
 

Floorscapes Dealers Can Compare Profitability Metrics With Their Peers To Improve Their Business.

Participation in Mohawk’s Benchmarking Program among Mohawk Floorscapes dealers is growing and has begun to  reach “critical mass,” according to Manny Llerena, Vice President of Retail Marketing.

The benchmarking project gives Mohawk Floorscapes dealers a powerful reference tool to use so they can compare their store’s operations with those of other retailers across the nation—especially those similar in size and market area. 

Introduced at the dealer convention in 2006, the benchmarking initiative asks dealers to enter their store’s P&L information into a protected database along with the financial information from other aligned dealers. 

“WFCA created a similar benchmarking tool several years ago,” said Llerena.  “But it was limited in the number of stores participating.  With our benchmarking program, we have information from a much larger sample.  And even though the process is still ongoing, we’re finding out critical things that have already helped many stores improve their operations..”

For example, benchmarking has uncovered that the top 20% of dealers in the Floorscapes network have gross margins 10 points higher than other dealers.  “It’s the same store system, so why are these dealers doing better?”  Llerena said.  “At the convention, we’re going to show other stores the simple things they can do to make a dramatic impact on the bottom line.”

Retailers Report Experiences with Process

Mark Furr of Highland Floor Covering in Flagstaff, AZ is relatively new to the floorcovering industry.  He sees the benchmarking process as a way to understand what he’s doing right—and maybe more importantly—what he needs to do to improve.

“It gave us the opportunity to dissect our business and look at our P&L, and start comparing it to other stores to find out what can make you better,” Furr said.   “It has helped us see exactly where we’re putting our dollars. Our margins weren’t as high as some stores, and we started to see why one store has a 44% gross and 15% net compared to us at 39% and 5%.  We found our sales compensation was higher.  We found out we needed to spend our ad dollars in a different way.  Benchmarking lets me work on where I don’t compare very well and understand the business side better.”

Jon Moullet is the owner of The Flooring Place in Bozeman, MT and a past Mohawk Floorscapes Dealer of the Year.  He said the ability to compare with other stores is critical.

“It gives me a chance to compare my store to similar dealers,” he said.  “I’ve seen numbers that say 15% of dealers are going out of business because they’re not watching their P&Ls.  Now’s the time when we all have to be extremely careful with money and really understand our gross margins and our bottom line.  There are dealers out there not doing this, and they could have big problems. 

“I think Mohawk has really grasped the idea that to be successful, their dealers have to be successful.  And this program can help a lot,” he said.

Moulett noted that the process of entering information was simple.

“It took about 10 minutes to put everything into the website, but I study my P&L a lot and I’m familiar with it.  It might take a dealer who’s not 15 or 20 minutes to enter his information,” Moullet said. “That’s a pretty small amount of time compared to what you can get back.   Most people should have their P&Ls from April when they did their taxes.  Their accountants could enter the information for them.  Or even they could get their Mohawk rep to help if they’re having trouble.”

Moullet also noted that stores shouldn’t be concerned with how “good” their numbers might look.

 “Don’t hesitate if you don’t think your numbers are as good as another store’s.  Use this as a way to compare and see where the differences are,” he said. 

“Ask yourself if you’re happy with your bottom line, and if not, how are you going to improve it?  Mohawk Benchmarking can give you answers.”

Mark Furr also said it’s all about the bottom line.

“Now, with economy shooting down,  I need this more than ever.  It’s helping me put smart dollars in the right place to make it through the slump.  I’m a 100% supporter, but I can understand what others dealers might fear about this. 

“It’s not turning loose of your confidential information, and it’s not a report on how good or bad you’re running your business.  It’s a way to help you see where you can improve,” he said.

Two Classes Scheduled for Convention

Llerena said that benchmarking is a key focus of the Floorscapes convention, and that two Mohawk University classes are being offered.  One is mandatory for all dealers. 

“Benchmarking Uncovered” will detail the findings of the program thus far, and help dealers focus of gross profit and how to find the extra profit in their businesses. 

Stores which have submitted their numbers to the Benchmarking project will be invited to a special session entitled “Focus+Action=Results.”  This session, led by Dick Ruhe of The Ken Blanchard

Company, will provide stores with addition ways to use the information they’ve learned about their businesses by participating in the process, and will give them a head start into 2009’s key goals, including profitability training and business planning. 

“I cannot overemphasize the value of this program to our dealers,”  Llerena said.  “The stores who have participated are reaping great rewards, and they’re using the information they’ve learned about their stores to find even more ways to save money, build margins, and improve efficiencies.  Many of them report that they’ve never been able to truly understand their financials until we implemented this program.

“That’s flattering for our Benchmarking effort,” he said.  “But what’s really great is when a dealer shows you, on his own P&L, the dollar difference that this program has made.”

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Mohawk is a leading supplier of flooring for both residential and commercial applications. Mohawk offers a complete selection of broadloom carpet, ceramic tile, laminate, wood, stone, vinyl, rugs and other home products. These products are marketed under the premier brands in the industry, which include Mohawk, Karastan, Ralph Lauren, Lees, Bigelow, Dal-Tile, American Olean and Quick-Step. Mohawk's unique merchandising and marketing assist our customers in creating the consumers' dream. Mohawk provides a premium level of service with its own trucking fleet and over 250 local distribution locations.

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