Do You think Customers are an Asset or a price Center?

zanes cycles2

We’re going to explore one example closely by watching how Zane’s Cycles grows – because they know and respect the lifetime value in their customers.

With just one retail location, Zane’s Cycles of Connecticut is among the three largest bike shops within the U.s.a.. They sell $15 million every year in bicycles, and bike supplies, with a relationship grounded in customer trust.

For example, on any given day you may see a $6,000 bike exit the door for a test drive with none considered one of Zane’s folks asking to gather the customer’s identification or any kind of collateral. “Do you will have my license?” is normally asked by the client. The response is usually, “Nope, just have an outstanding ride.”

Zane’s makes this decision because they need potential customers to understand that during this world there’s a shop that trusts them, and it’s Zane’s. Made as a choice to embrace customers, this decision also sends a robust message to Zane’s staff. Owner Chris Zane says:

“This is not really about protecting ourselves. We’re within the people business, not the item business. This decision helps our staff understand and act on that key difference.”

It gives customers confidence and a long-lasting impression that they have got found a spot where they’ll like to do business.

Each Customer’s Lifetime Value is $12,500

Zane’s won’t risk that. Zane’s Cycles decided to behave on its belief that most of shoppers do what’s right. Chris Zane says:

“We calculate the lifetime value of each customer at $12,500. Why start that customer relationship by questioning their integrity? We elect to believe our customers.”

New Zane’s employees often suggest that they protect the business by taking customers’ keys or wallets once they test drive a bicycle. Chris Zane firmly says “no” to this suggestion. It truly is when employees and customers realize Zane’s is a service business, not a product business. And it sets the tone for a way they have interaction with people. It frees them to do the correct thing.

Trust Is Reciprocated: Zane’s Loses Only Five Bikes a Year

Customers feel trusted by Zane’s and that trust is returned to Zane’s. Of the 4,000 bikes they sell yearly, only about 5 are stolen during test drives. For Zane’s it’s just not worth having the entire attitude of the corporate change due to the attitudes of 5 dishonest people.

Zane’s believes customers are good. That attitude frees Zane’s to grow. They’ve achieved an ordinary annual growth rate of 23 percent since opening in 1981. Why not take a page from Zane’s, and take a tough study your policies?

Change or eliminate any that exist to “protect” you out of your customers and wonder:

  • Do the cost of your customers? Does everyone on your company?
  • Does the way you value customers guide decision making?
  • Are you investing in customers or managing costs?
  • How would you rate your intent and skill to appreciate the price of consumers and put money into them?
  • Do your decisions on the way you value customers earn you “beloved” status today?

Take a difficult study your policies. What something are you able to change or eliminate that “nickels and dimes” your customers, especially your best customers?

Image: Zane’s Cycles

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