October is Employee Ownership Month, so it’s the perfect time to highlight some of the wide-ranging, business-building impacts an employee stock ownership plan can have. One big difference we’ve seen and experienced again and again in ESOP companies is their delivery of a distinctively positive customer experience.
In fact, one of our own employees, Kelly Jansen, is such a firm believer in the customer benefits of working with ESOP companies that she intentionally sought out ESOP-owned businesses for her home renovation project.
As Kelly explains, “I’ve been trying, rather specifically over the last couple years, to as much as possible support ESOP companies.” In more than two decades providing ESOP administrative services, Kelly has seen for herself the transformation in employees’ feelings about their work — and how that attitude extends to customer experience and satisfaction.
Kelly had purchased a house in need of some updates, with original carpeting from 1976 and a dated kitchen. She decided this would be a perfect opportunity to transform her feelings about employee ownership into action by seeking out ESOP-owned companies for her home project.
What is an ESOP? A Qualified Plan and More
An ESOP is a type of retirement plan in which employees earn ownership stakes in the company they work for — at no cost to employees. Employees may receive an annual allocation of shares as a form of compensation in addition to their wages. Company shares are held in a trust on behalf of employees. As employees vest into the plan, they earn a right to the shares, including any appreciation in share value from the time the shares were allocated to them.
By virtue of becoming shareholders, employees are often motivated to care about the success of the company as a whole — since they now have ownership stakes. With the right communication, transparency, and promotion of cultural values, employees grow to understand how their work can contribute to a strong valuation and rising stock prices, which translate directly to a retirement benefit distribution that’s higher in value, too.
ESOP Benefits to Customers
Kelly lists several reasons why she believes working with an ESOP-owned business can lead to better customer experiences:
Less employee turnover — With ownership stakes and often better overall compensation, employees tend to stick with ESOP companies longer. This consistency is a boon for customers looking to develop ongoing relationships, whether they’re at the consumer level or business-to-business.
Greater experience and expertise — Longer-tenured employees accumulate more company and industry-specific knowledge. They develop a deeper understanding of the company’s products and services, as well as a better sense of their customers’ needs.
Increased engagement and care — Employees are invested in the success of a company they partially own. Satisfied customers and repeat business directly benefit them.
Local ownership — ESOP companies are less likely to pull up stakes and shift operations elsewhere, since the employee-owners often live in the same community. Customers get the satisfaction of knowing they’re supporting local companies and doing business with their neighbors.
Kelly’s ESOP Renovation Project
As mentioned above, Kelly’s home needed renovation work involving electrical, cabinetry, and carpets. Notably, she’d previously seen “the ESOP difference” in the car-buying experience. After shopping around, Kelly found that employees at Van Horn Automotive Group took the time to listen to her needs and ensure she found exactly what she was looking for, rather than focus on upselling or pushing her towards a sale. She found this to be a stark contrast to her experience at a much larger, privately owned auto dealership.
So Kelly made a little extra effort to seek out ESOP companies when it came to the home renovation, and she had great experiences as a customer.
Carpetland USA Flooring Center in Southeast Wisconsin went above and beyond to earn her business for the flooring installation, even taking the time to shop locally with Kelly and her husband, Josh, to choose the flooring that would best meet their needs. The installation team was on time and polite, cleaned up thoroughly, and made sure Kelly was happy with the end product. She even received a handwritten thank you card after project completion.
Oostburg Lumber, now part of the ESOP company Bliffert Lumber & Hardware, is supplying Kelly’s new kitchen cabinets and countertops. According to Kelly, they’ve been very responsive throughout the process and interested in making sure they get her “the kitchen of her dreams.”
Kelly also reached out to a local, employee-owned electrical contractor. While the company didn’t have capacity to take on her project, their responsiveness and communication stood out among electricians, many of whom didn’t take the same care to follow up promptly with her inquiry.
“I really believe that ESOP companies are more likely to treat customers well, in part because employees are also owners who stand to benefit when the business thrives. Satisfied customers and repeat business directly impact their retirement accounts,” said Kelly.
ESOPs Help Keep Communities Strong, Too
ESOP companies help build wealth locally—translating to greater consumer buying power when those workers retire and claim their distributions—and tend to remain in their communities for the long-term rather than relocating.
Kelly believes supporting ESOPs is especially important for smaller towns that rely on these employers for jobs, tax revenue, and the many other ways they keep communities strong. As customers, community members have significant power to influence ESOP success through their spending decisions.
Though ESOPs have existed since the 1950s, many people today remain unaware of this unique means of employee ownership. Kelly makes it a point to educate others, believing ESOP education should start at the high school level—and certainly, it should be part of post-secondary learning in business, human resources, finance, and related fields.
Until then, resources like the National Center for Employee Ownership’s business directory are there to help consumers identify ESOP options within their communities, and help support the employee ownership movement. It’s a choice that aligns well with buy-local initiatives, too.
Employee-owned businesses often go the extra mile to earn their customers’ business — and their trust. So whether you’re buying a car, remodeling your home, or looking for high-quality vendor-partners for business services, you can find knowledgeable and dedicated professionals who genuinely care about your satisfaction. Next time you need a product or service, look up the ESOP companies in your area. Kelly’s confident you’ll be pleasantly surprised by the outstanding experience employee-owners provide.
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