Chris Zane has owned a bike shop since he was 16 and now has one of the five largest bike shops in sales in the United States. We will discuss in this article the things Chris has done to make his store stand out from the rest.

Chris Zane has 4 main competitors but he has 65% of the market share. The average bike shop sells about 650 bikes yearly and makes the owner about $40,000. Chris store sells 3,000 bikes yearly and generates a 6 figured income from this. His approach is different than almost any other retailer and has led to his success. There are 5 main tips that a retail store owner can take from the way Chris operates his business.

1. Service is the Difference- In order to get a customer for life a business must exceed the customer’s expectation. There are few retail stores that do this on a consistent basis. Many meet the customer’s expectations, but will not take the extra steps needed to make their business stand out.

Chris estimates that a loyal customer will spend $8,500 in his lifetime with him. Every store should have a ballpark figure of the lifetime value of your customers. You will look at customer service in a different light in that regard.

Here is a perfect example of how Chris Zane handled a situation and gains a lifetime customer. The customer wanted to get their expensive tire pump fixed. Even though it was not purchased at Chris’s store, he gave the customer a free one.  The next time the customer came back he spent more than $200 in bike accessories.

Most owners would have told this guy to take the pump back where he bought it. In this case, Chris Zane was able to get a new customer at a low cost that is very loyal. How many of his friends and associates did this guy tell about this exceptional service? I would bet plenty. Most retail owners focused on the few who would take advantage of store policies instead of focusing how these policies can greatly increase the profitability of the store.

2. Raising the Standard- Having a Wal-Mart near you will force you to take your business to the next level otherwise your sales and profits will decline. One way to compete against the big retailers is to raise the guarantee. For example, Chris first raised the warranty for his bikes from 1 year to 2 years. After his competitors matched him, Chris went to a lifetime free service on all parts and warranties.

 The numbers that honor that warranty is small. In the 2^nd year, only 20-30% of previous purchasers would come in for their free service. Most of those would buy other accessories at that time. This program is not as expensive as it sounds.

3. Turning Problems into Opportunities- Unfortunately, no matter how well managed your retail operation, mistakes will happen. It is how you handle these mistakes that will make a huge difference to your bottom line. One of Chris’s employees made a huge mistake for a Valentine’s Day Gift.

           The wife had wanted the bike to be in the display window with helium balloons “Happy Valentine’s Day”. When, it was not displayed in the window it ruined the day.

           Chris took care of this problem quickly. He cancelled the $200 balance. He took the bike to the customer’s home and sent catered lunch to the customer and Co-Workers. Finally, he sent a gift certificate to an upscale Restaurant. Overall, this mistake cost the store $750.

Was this too much, perhaps? However, Chris is not just selling a bike. He is selling an experience. Also, he got a lot of free advertising by sending lunch to the co-workers. Where do you think most of them will buy their next bike?  Many business owners focused on the short term vs. long term. Chris looks at the lifetime value of the customer.

       4. Employees Customer Focus not Product Focus-   Chris and his employees are not cycling enthusiasts. They have ample product knowledge, but they are driven by their passion for sales and customer service.

Enthusiasts tend to confuse the customers because they try to impress with their knowledge of cycling. This causes many customers to walk away.

Chris wants to make sure his customers have everything they need while cycling. He gives every employee $3 for every 3 accessories they sell with a new bike purchase. This compels the sales person to think about the needs of the individual cyclist. This program was extremely successful as the average sale went from $350 to $500.

5. Raising Guarantees & Removing Customer’s Risk- I saved the best for last. This is the one that will cause the biggest problems for most owners. By offering outstanding store policies, it removes the objections of most customers and sales will go through the roof. Here are a few policies that Chris Zane uses in his store.

He went to a 30 day return policy. In 2004, 10 customers took advantage of this opportunity. 8 of these customers upgraded to a more expensive model.

If you buy a 12” or 16” bike, you are able to trade it in for full credit in a year or two\. 10% of the bikes come back. Every return bike is given away to needy children at Christmas. Chris is able to get community goodwill, free press and a tax donation out of this. This is just another brilliant move by Chris.

You can find out more about Chris Zane and 8 other unique entrepreneurs in “Alpha Dogs” by Donna Fenn. This is an excellent book and a fabulous read. It will give you insight in how small business owners have taken their business to the next level in a variety of fields.