Shared Ownership Increases Customer Loyalty at Jackson's Hardware
Anyone who's shopped at Jackson's Hardware will tell you there's something special at work here. In an era where "Big Box" encroachment has nearly eradicated the local neighborhood hardware store, Jackson's, which was founded in 1964, has survived to see handfuls of competitors come and go while their loyal clientele keep growing in number.
Chalk it up to a comprehensive ownership culture and a dedication to employee development. These powerful people practices helped Jackson's earn a spot as one of Winning Workplaces' 15 Top Small Workplaces for 2008.
Employee ownership, through an ESOP, factors strongly into Jackson's success – a practice that even their customers understand and appreciate. Yet, Jackson's President and CEO Bill Loskutoff says this isn't the only ingredient in the company's "secret sauce."
"There's often a huge misinterpretation about ESOPs," he says. "I think it's a little like the duck floating on a pond, where up on top you just see it floating along, while down below those feet are paddling away like crazy."
Loskutoff has been with the company for 18 years, having joined soon after Jackson's went ESOP. He's seen what it takes to make it click and routinely gets requests for advice on implementing the practice from other small business leaders. He warns that the greatest challenge for strong companies with mature ESOPs is managing a huge repurchase obligation. This is, in fact, a sign that both the company and ESOP are doing well, he says.
"I think many people think they'll have a management team and go ESOP and that it'll just work out," Loskutoff observes. "But it just doesn't work that way, not in a successful ESOP."
He says Jackson's employee owners have learned over the years that equal parts preparedness and constant retooling of the program are necessary. A task force, currently consisting of five dedicated associates, has been essential to making the ESOP function.
Carolyn Emge has been with Jackson's for 19 years and sits on this task force in addition to handling Accounts Payable. Their objective is to learn as much as they can about ESOPs and educate fellow associates about the possibilities and potential of an ownership culture.
In addition, monthly all-staff meetings cover the company's financial situation and explore any procedural changes. "Associates of the month" (nominated by their peers) are awarded weekend getaways, shopping sprees and gas cards and are eligible to represent Jackson's at the national ESOP conference as their employee-owner of the year.
These awards are in place so that the store can succeed by its collective whole, explains Loskutoff.
"To run a successful ESOP, you have to have everybody involved, and incentifying people is one way to do it," he says.
Destinations for the aforementioned getaways have included Hawaii and Lake Tahoe. Still, "It's about the culture, not just about a trip being given away," Loskutoff says. "You can't put in words the camaraderie and culture that's achieved when you get a group of people together to share the thoughts, feelings and memories that come out of these events."
John Tevini, Warehouse Manager for 10 years at Jackson's, emphasizes how the culture works differently here than at other hardware stores – even ones that have a similar number of employees.
"The first thing I noticed that was 'different' about Jackson's was the way the associates are treated – always with extreme giving and care." Trust, respect and fairness, after all, make up one of the six building blocks of a Winning Workplace.
As with most of the small firms named Top Small Workplaces, this focus extends to employee benefits. Even as medical premiums more than doubled in the last five years, Jackson's continues to offer 100 percent employer-paid coverage for all associates and their families. Their medical, dental and vision plans have been adjusted through open discussion to maximize return for employees in the face of rising costs.
"The company has always been supportive through illnesses, deaths, births, marriages, and divorces," Tevini says.
The company gets an ROI from its generous benefits, which include such "softer" items as free meals and a ready supply of comfortable footwear for associates, in the form of excellent employee tenure, especially compared to others in the retail trades. Ed Gazzano, Sales Associate of five years in Plumbing and Finished Hardware, confirms that having so many associates with at least 10 years of continuous employment is unusual and "definitely brings a feeling of stability." Customers appreciate this, he adds, and very often ask for certain associates by name.
Going further, both Gazzano and Tevini connect associates' positive attitude and their innate willingness to help customers – which leads, of course, to customer evangelism that helps drive both repeat and new business – back to Jackson's employee ownership culture.
"As owners we are working for ourselves," Tevini says, "which means we need to make the customer's 'Jackson's experience' a good experience."
The store consistently receives comment cards and referrals highlighting exceptional service. Gazzano adds that when it gets to the point that associates know their customers by name, "It makes them feel like they are more than just another customer, but more importantly that they are being helped by a friend."
At Jackson's they go above and beyond, but Loskutoff stresses that competitive pricing remains as important as ever. They need to appeal to customers' pocket books, he says - "Otherwise it's just not going to work." But he's confident that the inherent friendliness that their clients pick up on, which stems from a cohesive culture of shared ownership and respect, will enable the business to not only survive, but to thrive.
"I do believe we have a culture here where we're willing to make a change at any given moment. And I think some of our larger competitors don't have that flexibility and can't make that kind of change right away," he says. "That gives us a competitive edge."
Company: Jackson's Hardware, Inc.
Web site: www.jacksonshardware.com
Industry: Retail trade
Location: San Rafael, CA
Number of Employees: 61
Sales: $17.1 million
