Zane's Cycles and the lifetime value of a customer

At the 1-800-GOT-JUNK? conference, I had the privilege of hearing Chris Zane, owner of Zane's Cycles, a Branford, Connecticut-based chain of bike stores, give a great keynote.

Zane talked about the cornerstone of his business: customer service built on understanding the lifetime value of a customer. Zane's Cycles did the hard work to understand what one person meant to the business. And the company has reaped the benefits ever since.

That knowledge fundamentally changes customer service. Suddenly, all the nickle-and-dime charges and small disputes aren't skirmishes to be won any longer. Instead, Zane's wants to lose most of those battles to win the war: keeping that customer forever. "Losing" the nickle-dimer issues means a business can win the grand prize.

It's the right approach but hard to implement when small loses seem to add up. A company has to take the long view, swallow ego and give away free services that maybe a customer doesn't "deserve." When someone walks away forever, you can't always see the lost revenue. But when a customer gets a free inner tube when the offending wound was obviously self-inflicted, well, that expense is on the books as a tangible loss.

It's a forest-for-the-trees approach and Zane does a great job explaining it. Here's a bit more on his business and his philosophy: