The speaker was Dino Mancini, a trade show set designer who was working for Trek at the time. Dino started his presentation by telling us that he was going to describe the kinds of adjectives normally associated with the kinds of images that would be displayed on the screen behind him. Using the words he chose, rather than by looking at the pictures he said would be displayed, he wanted us to guess what iconic brands he was describing through his words. He began by talking about crisp-looking blue and white shirts with pockets, khaki shorts, and denim pants—obviously things that made you think of The Gap and its casual clothing. Then he talked about vivid reds, yellows, and oranges; organic ingredients like lemon and avocado that make up fresh-smelling lotions and creams—things associated with The Body Shop. What about a blue box with a white ribbon tied neatly around it? A precious gift from Tiffany’s, of course.

During all his descriptions, the screen behind Dino was blank. One guy even raised his hand halfway through and said, “Hey, your projector is broken.” Dino kind of chuckled and replied, “You just missed the entire point.” Dino’s objective was to show how some brands can be identified just by describing the look, colors, and smells associated with them.

Like most of the attendees, I left his presentation scratching my head and thinking, “That was interesting, but I still don’t get it!” During the next three weeks, the presentation continued to needle me. I just couldn’t get the presentation out of my head. What the heck was Dino really driving at? I finally had my “Ah-ha!” moment, after which I figured out how I, too, could create that kind of visceral bond with my customers, so that if they closed their eyes, a certain kind of smell or image would immediately make them think of Zane’s.

The answer I settled on was simple: a coffee bar. A few years earlier, I had taken a trip to Europe; one of my stops was a bike shop in Lucerne, Switzerland. The thing I’ll never forget about that bike shop was its very cool coffee bar, where people relaxed, sipping their caffeinated drinks and talking about riding. I had never seen anything similar to that in the United States, so I figured I could do the same thing as that Swiss shop and really stand out with my customers.

I hired a guy who used to work for me in the bike shop to put together this fabulous-looking coffee and espresso bar. Today, I have customers coming in and telling me they love the smell of our store, which is really a mix of ground coffee and rubber. I know that might sound strange, but when you have 350 bikes on display—700 tires in all—that smell of new black tread makes a connection with people.

We combined this smell with visual effects as well—a black inlaid floor that resembles a black-topped road, complete with a double yellow line leading from the front door all the way back into the repair shop, as well as the kid’s play area and our original sandbox (which I’ll discuss more later). And behind the bar, we have a museum of sorts where we have hung all of the different Zane’s signs and logos we have used over the years. Taking a seat at the bar, our customers can see the history of our branding development: our original stenciled sign, another one we call the Adam Ant, our first professionally designed logo, as well as a gold-leaf, hand-carved marquee that helped build our image in the minds of our customers. They can compare our second logo, a picture of a guy riding a bike that used a spiral-like drawing style, and our current logo, the world-famous Zane’s placard in bright orange. These additions have been so successful for us because they add to that image of our brand in our customers’ heads—creating pictures and smells of what Zane’s means, even when they have their eyes closed.

Of course, this is also the premise behind our newest Branford location: a distinctive building with the profile of a mountaintop, complete with a spinning bicycle-wheel (just like the one on the cover of this book) wind turbine on the roof. My goal is for all those folks traveling up and down I-95 to recognize our building—particularly because so many local media outlets have written so often about it. These changes are also intentionally designed to build a relaxed atmosphere where customers can turn off their defenses and enjoy themselves. After all, if we can find any other way to add to those twenty-five minutes that a customer might spend in our store, we’ll take it.

Most bike shops don’t have coffee bars, so that alone makes our shop stand out with customers. But, more important, the bar also serves as a connection point between our customers, something that allows them to slow down and enjoy being in the shop. I really do get a smile on my face every time I see a couple of customers strike up a conversation over coffee about an article one of them is reading about a particularly great ride. We also have customers who come in simply to grab a cup of joe so that they can tell us in detail about their latest ride. In other words, the bar helps us form a foundation for a lasting relationship with our customers, something that is far more valuable than most business owners realize. Having something that allows you to slow your customers’ pace down is key because it gives you additional opportunities to find connection points with them. And, obviously, the more time someone spends in your shop, the greater the chance you have of selling him or her something.

Think about your daily trips to get gas, buy groceries, or drop off or pick up your dry cleaning; you want to get in and out as quickly as possible. That’s why your grocer puts those free food samples at the end of the aisle—to get you to spend a few more minutes with them. Similarly, if you put cups of hot coffee in people’s hands, they tend to slow down just to avoid spilling anything on themselves. More than that, our coffee bar becomes a way to show our customers that our store is fun to be in and they don’t have to race through on their way back home. We brew an average of 150 pots of coffee a month in the off-season and up to 400 during the busy months, which, because we buy gourmet coffee, can cost anywhere from $150 to more than $300 a month.

But this isn’t a cost for us—it’s an investment. In that way, our bar also becomes a valuable staging ground for us on busy days. Rather than standing around twiddling their thumbs, waiting customers can have something to drink, read a magazine, or look at trail maps of local rides while we finish up with our other customers. Also, customers actually feel better on a coffee high and are much more likely to buy. Rather than looking for someplace to sit and relax, they’re all amped up, ready to take a test ride and actively participate in the exciting process of selecting their new bikes. I even remember one customer who, pre-coffee, was hemming and hawing over whether to plunk down his wallet to buy a new bike. But, after a nice hot fresh cup of coffee, he ended up buying not one but two bikes. Coffee also serves as a great way to keep my employees in the shop: rather than worrying about whether one of them will be down the street at the coffee shop when a customer comes in, I know that by having a great offering of coffee, both my employees and customers will be satisfying their cravings nose to nose. A cup of coffee could actually offer an immediate way for my salespeople to make that first connection with a thirsty or undercaffeinated customer. In other words, the bar helps us keep our customers happy, even when we’re a bit too tied up to give them one-on-one attention. That’s a hugely valuable fact that goes a long way toward winning the long-term loyalty of those customers.

I also took another lesson from Dino Mancini’s presentation and started wrapping our customers’ purchases in brown craft paper tied up with a ribbon with the Zane’s logo printed on it—to make us, in essence, the Tiffany’s of the bike business. We also have been creative when it comes to the packaging of our gift certificates. Most gift certificates I receive come in boring white envelopes. Our gift certificates come in water bottles with Zane’s printed on them. Sure, I might have been able to sell those bottles for five dollars apiece, but think about the impact I get instead. Why on earth would one of our customers ever go buy from a competitor after getting more service or being treated better than they expected, let alone to a place that still puts their gift certificates in plain white envelopes? The beauty of this principle is that it has nothing to do with bike shops: you could be selling any product or service. It works if you run a bank, a salon, or a snowplowing business like the one run by the friends I mentioned previously. Whenever a business delivers more than someone expects, it will be rewarded sooner or later. The key is to do it in a way that pokes your customers in the ribs a bit, that reminds them you just did something that you didn’t have to and shows you’re ready to keep doing it time and time again.

Tropicana, for example, is one of our partners on the commercial side of our business. The folks who work at the kingpin of orange juice told me that the lifetime value of one of their customers is $32,500. They arrived at that figure by estimating that the average customer will buy somewhere in the neighborhood of six thousand cartons of their juice over time. No wonder the company’s marketing efforts are focused on children, right? On the other hand, the lifetime customer value to the owner of your neighborhood pizza joint is $25,000. That’s a lot of pizza—and once that owner starts thinking about his or her customers as having more value than the $20 pepperoni special they just ordered, the more successful the owner can be.

Saying that you want to create a lifetime relationship with your customers is one thing; it’s quite another to make it happen. To be successful at building these kinds of relationships often requires you to think differently about why your customer needs you in the first place. In this virtual age, where so many transactions happen with no human being involved, finding a way to make emotional connections with your customers is key.

For example, the Internet has made travel agents extinct for the most part. Who wants to pay someone else a nice fee when he or she can plan a trip right from the computer, right? I have to admit that I also thought this way until I had the chance to talk to a friend who worked as a travel agent for many years. He reminded me that the real value he gave his customers was when their flight was canceled or when a hotel couldn’t find their reservation. In other words, my friend proved his value to his customer when the poop hit the fan, so to speak. If he could bail his customers out of troublesome and emotional situations such as rebooking a family on another flight or finding them a new hotel down the road, those customers would often be so thankful they would never think about booking another trip without my friend’s help.

I realized that this same principle applies to buying bikes: anyone can go online and shop for a bike. You can even get a lot of great advice about what kind of bike and parts you need if you keep up with the industry blogs and online user discussion forums. If you looked at all the odds stacked against you as a retail bike shop, why would you have any confidence whatsoever that anyone would actually make the effort of stopping by our store to buy a bike? The answer, we came to realize, was because we would be there when one of our customers’ children’s bikes breaks or, to move up the food chain, when the parent of a child who rides one of our bikes needs to find a replacement part in a pinch. In other words, we want our customers to come in and buy from us because we will take care of their needs far better than any retailer who thinks of them simply as an e-mailed order number.

Our goal is to show our customers that we want each of them to feel as if they can always rely on us, especially after they’ve left our store with their new bikes. We also want to emphasize that when they do come back to us for help, we see those visits as opportunities to further our relationship with them, not just additional chances to ring up another dollar on the cash register.

Once I understood this, I wanted to find ways to wake people up, so to speak, and implant something in their subconscious, so that next time they have a buying decision to make, they’ll already be thinking of me. One of the strategies I used was to wait until customers had walked out to their cars and then run out the door after them. I would tell them that I had accidentally given them the wrong change and would then hand over a crisp one dollar bill, reimbursing them for my error (all the time knowing I had done no such thing). Customers would often look at me in amazement and appreciation for the effort. And you can bet that they knew where to go the next time they needed to visit a liquor store. Of course, on my end, I only earned one dollar of profit on a six-pack, so I was actually handing over my entire profit in order to build a longer-term relationship with that customer. I found that investment paid for itself time and time again.

I owe my own understanding of this idea—that customers need to be prodded from time to time—to a mortgage broker who gave a speech on this topic during a networking dinner I attended a few years ago. Not unlike my travel agent friend, this mortgage broker talked about how, in giving out customer satisfaction surveys, she learned an extraordinary thing: that the harder it was for a customer to secure a loan, the higher their satisfaction level with the broker. The reason for this seemingly counterintuitive notion, she told us, was that the people who almost didn’t get their mortgage saw how hard their broker was working to help them. Because the broker and the customer were in almost constant contact, reviewing pay stubs, calling up banks, or checking references, the customer understood how difficult the entire process was. Customers with perfect credit scores and plenty of money for down payments, on the other hand, ranked their satisfaction levels lower simply because they didn’t need to see how hard their broker was working for them. I was fascinated by this realization that part of providing great service is reminding your customer how hard you’re working to deliver that service, to make their lives easier. And, of course, providing a key service at a time when your customer is feeling the most pain is one surefire way for them to understand and acknowledge what you’ve done.

When it came to the bike shop, I adapted the strategy from our liquor store experiments somewhat. One of the ways that we have gone about building a sense of trust with our customers is that we have stopped charging our customers for anything that costs us less than one dollar. That means that we’ll give away parts like ball bearings, master links (part of a bike’s chain), and various nuts and bolts for which we used to charge $1.99 apiece—which our competitors still do. Part of this strategy is built upon the recognition that most of the opportunities to give these parts away come during painful times for our customer. For instance, when a father comes into the store, looking somewhat worn out because his kid is in the car crying about the broken chain on his bike, weʹll just hand that dad a free master link to fix it. Matter of fact, we’ll give him two, in case he needs another replacement down the road. We do this because it lets our customers know we’re not out to milk them—we’re there to save them the hassle and the expense of getting their kids back out on the street and riding their bikes. We want them to know we’re not just here to take, and that we’re willing to go the extra mile to make them feel special—a key component of helping them to think of themselves as lifetime customers. When you look at the benefits to this program, I’d be willing to eat a lot of extra master links. But, when we added up what this strategy was costing us, it made my one-dollar giveaways on six-packs look foolish.

We actually tracked the costs of our giveaways one year and, incredibly, it came to just about eighty-six dollars. Breaking it down further, that eighty-six dollars bought us about 450 one-on-one interactions with various customers, most of whom were in some form of distress when we handed over the part they needed. Think about that: for eighty-six dollars, we got back 450 chances to alleviate a bit of pain for our customers and create a lasting memory while doing it. Compare the value of all that goodwill we created with the thousands of dollars it would have cost to rent a billboard or place an ad in the local paper. It’s kind of like that credit card commercial: one ball bearing—five cents. A happy customer who keeps coming back because you’ve just made his or her life a little bit easier—priceless.

Imagine you’re in the audience when I’m giving a talk about the lifetime value of customers. The first thing that I explain is that, because I’m in the service business and everyone knows service costs money, I’m prepared to spend some on that audience right then and there. That’s when I dig out my bowl of quarters, about $100 worth. To me, that bowl hypothetically represents how much I’m willing to spend on any one customer in the form of service, attention, or some other form of extraordinary effort that leads to creating a unique customer experience. Some people in the audience chuckle while others get this quizzical look on their faces as I next take a quick spin around the room and present a half dozen or so folks with the bowl, inviting them to help themselves. Some people take a single quarter; others take a bunch. I’ve done this more than a hundred times, in venues all over the world, and no one has ever taken the whole bowl. (I’m still waiting for the first.)

The point is that when you as a customer are presented with more than what seems reasonable, like a bowl of 400 quarters, you will self-regulate. To hammer this point home further, I then walk around the audience again and give out a few more quarters to the attendees who were originally offered the bowl, explaining, “At Zane’s Cycles, we offer more service than what seems reasonable.” By providing more service and attention than most folks consider reasonable—like giving away any parts that cost us less than one dollar—we build trust and loyalty with our customers and remind them how hard we’re working on their behalf.

As hard as it is to win a customer’s loyalty, and regardless of how big your bowl of quarters is, you can also lose that customer in a heartbeat if you and your employees ever turn on your autopilot. I was reminded of this at another sales conference I attended, when I heard Dave Mitchell, who talked about how Disney Corporation related to its customers in their hotel business. As a visual, Dave created a kind of speedometer with his arm to show that a customer’s satisfaction level is neutral before they arrive at the hotel. But as soon as he or she pulls up to the entrance, the customer’s meter begins to climb or fall, depending on the condition of the entryway, the lobby, and the friendliness of the staff behind the counter.

At some point, though, Dave explained, that meter will begin to settle on either the positive or the negative side of neutral, almost like it is made of wet concrete that is beginning to harden. That means that the hotel staff has a fixed amount of time to get that meter on the positive side because once the customer steps inside his or her room, the concrete meter will be set. That’s why the nicest part of any hotel is its lobby—it’s a conscious effort on the part of the hotel to get that meter climbing as soon as that customer walks in. But keeping that meter climbing takes an increasing amount of energy, and more and more quarters to keep it pointed upwards. That also means that it becomes that much easier to lose that customer if you don’t have your bowl to fall back on.

The single biggest factor in driving down a customer’s meter, the speaker said, was when he or she gets to the room and the key doesn’t work. At that point, no matter how much energy you’ve expended to build a positive image for that customer, you basically have to begin from scratch or, worse, from a negative position in hardened concrete.

I like this visualization of the process of winning over customers because it makes sense. It’s just so much harder to move that customer’s perception of your business if you haven’t started off on the positive end of the meter. And once the concrete around that meter sets, you can almost pack your bags because it will cost you more than just a bowl of quarters to win that customer back. But, if you can ever help customers during a time of pain and remind them of how hard you’re working on their behalf, well, you can magically soften that concrete a bit and start that meter moving again.

Think about the story of the snowplow company who brought the trashcans in for its customers. By finding a way to remind its customers of what it was doing, like putting stickers on the cans, those guys could move their customers’ meters forward a bit. The same concept applies when I walk into my neighborhood coffee shop and they tell me I’ll have to wait ten minutes while they brew another pot. As soon as I hear that, my personal meter takes a big dip as I sigh and think about all the things I need to do. “I’m never coming back here again,” I might say to myself. “The last thing I want to do is wait for my coffee!” But when the person behind the counter tells me, “Sorry for the wait; this coffee is on us today,” well, my meter suddenly springs to life and takes a nice big uptick.

I like to tell people what Gary Loveman has done at Harrah’s in Las Vegas to show how other businesses have adopted similar programs. I attend four or five trade shows in Las Vegas each year, and I’ll always stay at Caesars Palace (the nicest of Harrah’s properties) because I’m both familiar with it and because they send me rewards promotions based on how much I’ve spent on my prior visits. I might get a free night’s stay or a chit for fifty dollars just to remind me that Caesars appreciates my business. But under Gary’s direction, the casino goes even further. The days of the coin-slot machines are long gone. Today, everything works via a special loyalty or players card, which you can use for buying everything from poker chips to potato chips. But that card is also useful for the casino to keep its eyes on you. There is actually a room full of pit bosses that monitor what you’re spending, how much you’re betting, and even if you’re on a tough losing streak.

Gary understands that losing streaks are bad things, especially for first-time customers. So, as soon as his team sees a new customer start losing—just visualize that satisfaction meter starting to point straight down—they’ll send someone down to him or her with an extra fifty dollars or a meal coupon to turn that meter right around. Gary knows he has a chance to change that customer’s attitude before the mortar sets and he’s got a big bowl of quarters to dip into to make that happen.

One key aspect that the speaker talking about Disney missed in his presentation and something that Gary understands well is the value of a customer’s meter over the lifetime of your relationship with him or her. The key is not to think about that meter in terms of a single transaction but as part of a lasting sequence of events. When you start looking for clues for how the best-run companies in the world think about this sequence you’ll notice that these companies understand the value of return customers, so they’re willing to pay to keep you coming back as a customer again and again. If I havenʹt visited Jack Mitchell’s store in a few months, for example, I get a personalized coupon for $100 in the mail, letting me know that they missed me. Staples does the same thing when I haven’t been back to stock up on office supplies for a while. We do something similar with the help of our computerized customer database. From the very beginning of computerized point of sale systems, I have been a disciple of keeping everything from my inventory to purchase records on computers. As a result, I now have about twenty years of customer histories to turn to for help in continuing or even starting a conversation with our customers.

Let me explain how this works before you start thinking we are running some sort of Big Brother operation. Let’s say that we have a return customer who walks into our shop after work. Rather than starting our conversation from scratch, the salesperson can ask for her name and quickly look up her purchase history with us. That’s when the salesperson notices that she stops into the shop every six months or so; each time she does, she picks up a new piece of gear like a pump or a helmet. Bingo—those are the seeds to begin a conversation. Rather than wasting a whole lot of time talking about what our customer has already bought, we can then spend our time talking about what kind of gear she might be looking for this time. Remember, we only have that customer’s attention for twenty-five minutes, so time’s a-wasting.

Along those same lines, we also use the information in our database to send customized flyers to our customers, letting them know of a special event, for example, when we have an opportunity to purchase a specific size, let’s say men’s medium, of some popular clothing on closeout. We send out an e-mail blast or postcard, letting all of our male customers who have ever bought a piece of medium-sized clothing that we are having a sale (not mentioning specifically medium, but just a sale on shorts). When he arrives, wow, there’s a sale rack full of clothes in his size, how lucky is he. We can use that information as a predictive tool as well. If we sell a 16-inch bike to the parents of a five-year-old, we can bet that same family will be ready to upgrade to a 20-inch bike in another two years. The same goes for a high-end customer. She might have bought our lightest bike five years ago, but now that Trek has introduced its even lighter version, we’ll send her a note to let her know all about it. Along with it is a reminder to stop in for free servicing of her existing bike, coaxing her into the store. The goal, of course, is to let that customer know that we’re thinking about her. And, rather than making nuisances of ourselves, we’re also trying to anticipate how we might make a lasting impression with her in a very personal way by homing in on the kinds of things she likes best.

Of course, we also have to walk a fine line in our efforts to personalize those one-on-one customer relationships. We have to be conscious of how we use this customer data; we would never want to tip the scales and use it in any kind of creepy manner. Plus, the last thing we want to do is offend any of our customers by sending information revealing how singularly focused we are on them; God forbid someone has lost or gained weight since the last time they’ve bought something. Sometimes, I suppose, there can be too much of a personal relationship with your customers; we need to be sensitive about their privacy.

One cautionary tale I heard on this very subject happened to a high-end jewelry store that will remain unnamed. This store, like us, kept track of all of its customers’ purchases over the years. One year, to kick off a big holiday sales push, the store sent out invitations by mail to all of its high-end customers—those folks who had spent a lot of money on expensive jewelry in the past. In the mailer, which was sent directly to the customers’ home addresses, the store had printed something like, “To our high-priced jewelry customers . . .”

On the face of it, this may seem like a very reasonable marketing effort. Unfortunately for the store, though, it was a gigantic disaster. It turns out that not all that expensive jewelry was ever making it back home to whomever was opening the mail that day. I guess there were plenty of husbands with secretaries wearing some pricey jewelry who returned home to more than a few rude awakenings that night.

Guess what? That book is still on my bookshelf. Although I still think Joe’s book has some great advice about goal setting, the takeaway point from this story is that most people won’t take full advantage of every deal they come across (even if you goad them). At the same time, Joe was prepared to buy back every single one of his books if his customers pushed him to—just like we at Zane’s need to be prepared to tip over our bowl of quarters when a customer asks us to.

Granted, it’s not always easy to think this way. It’s only human nature to push back from time to time when you feel like a customer is asking for too much. That’s why we’re constantly reinforcing the notion that we need to think about the lifetime value of our customers to help put the little things in perspective.

I remember a recent case where a man, a doctor in fact, came into the store to return a bike tube. It clearly had a hole created by a screwdriver in it—he must have slipped and accidentally punctured the new tube when he was changing his tube. But rather than own up to it, our customer insisted that we had sold him a defective tube. I watched as my employee who was waiting on the customer began to get a bit riled up. “Sir, there’s no possible way we sold you this part in this condition,” he said. Although I couldn’t have agreed more, I walked over to the shelf, grabbed a new tube, and made a brief detour to the coffee bar for a cup of hot coffee. I then handed both over to the customer and thanked him for bringing the defective tube to our attention. The doc kind of looked at me strangely at first, but after a sip of coffee, I could see him visibly relax. He even smiled—not the smile of a huckster but a smile that said, “Wow, thanks.”

After the doctor left, my employee came up to me to ask why I had given in to a customer who was clearly trying to take advantage of us. “Look,” I said. “That guy could come back in here tomorrow and buy a $2,000 bike from us—and some of the profits of that will go directly to you. When you look at it like that, a six-dollar tube is not even worth a conversation.” That tube serves as a small but critical lesson that all my employees should remember, especially as we continue to expand nationally. We should always be prepared to let a customer reach into that bowl of quarters, confident we can land that customer for life.

I like to share another story along the same lines with my employees; it stars a female customer who once made it clear she was going to put our policies to the test. One day, this woman walked into the shop, rolling her bike along with her. She immediately told us that she wanted to trade in her bike so she could purchase another. “Ah, sorry,” I told her. “We don’t take trade-ins.”

“Fine, then I want to return it,” she said, as she began reciting our policy covering returns back to me exactly line for line. “You will, without reservation, guarantee that if for any reason, at any time, I am not completely satisfied with any item I purchased from you, you will gladly repair, replace, or refund my money. Well, I’m not satisfied with my bike, so I’d like a refund,” she said in a now-less-than-friendly way. I was then faced with a dilemma: I could easily press the point that it took her an entire six years of riding her bike to figure out that she wasn’t satisfied with it. Or, I could just eat the cost of her bike and let her pick another.

In truth, there was never really any choice in the matter. As soon as I start to make exceptions to our rules, Zane’s would soon find itself in trouble. “Okay,” I said, immediately creating a transaction to refund her the total cost of the bike along with all the installed accessories. She said I could just issue her a credit, but I wanted to send her the message, as well as my staff, that by crediting her credit card for the full amount, moving forward on her next purchase wasn’t required in order for us to live up to our service offering. “Now, let’s see if we can pick something else out that you’ll like better.”

I was fully expecting her to pick out a bike about equal in value to her old bike, which we had sold to her for $480. Because we don’t sell used bikes, all I could see was red ink: we were going to be left with a used bike that we couldn’t do anything with, plus we’d be out the price of a new bike. Fortunately for us, our customer had her eyes on a bigger prize. Just as she had done her homework on our return policy, she had apparently done an equal amount of research into her choice for a new cycle. She actually picked out a $1,200 bike—for which she happily doled out $700 more than we credited her for her old bike. Although we didn’t make the kind of margin I would have liked on that bike, taking the return into consideration, we still turned a profit on the transactions and, more importantly, we continued the love affair with a cycling enthusiast who we trusted would be stopping back at the shop soon to pick up lots of high-profitmargin accessories. Looking back on interactions with this customer, she’s probably the only customer who truly dipped into the bowl of quarters, having tipped the entire thing into her purse. But the point of the story is that we should be willing to do just that for all of our customers. The real dividend from that whole experience was that it sparked some creative juices in my staff, which led to us implementing one of the most successful programs we’ve ever launched within our retail business, a program that continues to pay dividends even today.

Fortunately for Zane’s, we had Tom on our side. Not only is Tom one of the best store managers I’ve ever met, I’m pretty sure he walks on water and glows in the dark. After watching what was happening with the Walmart situation, Tom recognized that our customers, who were parents, might want to save a few bucks on their kids’ first or second bikes. After all, their kids were probably going to grow out of whatever bike they bought within a year or two anyway.

That’s where Tom’s inspiration came in. He launched a program where he told parents that once their children outgrew their bikes, they could simply bring their bikes back to the shop and trade them in for a full credit toward the purchase of a new bike. That meant those parents could apply the $129 they paid two years ago to purchase that 12-inch bike toward buying a new 16-inch model. And it didn’t end there; once the kids hit their growth spurt, they could trade that 16-inch bike in for a 20-inch model. As a parent, there was virtually no downside to this program. As soon as word started getting out that we were doing this, our sales of kids’ bikes went through their own impressive growth spurt.

I have to admit that when Tom first told me about the program, I started to sweat a little. All I could see were rows and rows filled with thousands of returned children’s bikes we’d be stuck with. Tom dismissed me as coolly as a cucumber. “Chris,” he said as he put his arm around my shoulder. “Think about it. Every bike we sell is potentially building a new lifetime relationship both with the kid and with his or her parents. Sure, we’ll end up with some returned bikes, but we can donate those to other kids in the area who can’t afford to get bikes as good as ours. Meanwhile, we have these parents practically lining up around the corner to get in here and spend their money.” The point, he reminded me, was that we had a chance to keep those kids and their parents coming back to the store for years—the same mantra I had been trying to preach to him for years. Ah, I finally realized, here is someone who gets what Zane’s Cycles is all about.

The surprise ending to this story was that, although I was prepared to make good on the whole bowl of quarters all those returns would add up to, only about 20 percent of the people who bought the bikes ever brought them back. At first, we were baffled. “What’s going on?” we wondered. I was worried that if no one took advantage of the program, it would seem like we were promoting something that no one was interested in. We even began calling up our customers just to remind them that they were about due to trade in their kids’ bikes for upgrades.

The funny thing was that when we started talking to these customers about why they hadn’t returned to trade in their old bikes, most of them told us they simply didn’t want to. Most of the folks we talked to said they had other younger children or relatives who had already inherited the bikes. Because our bikes were virtually indestructible, parents saw no good reason to turn them back in. When we started looking at the program in this light, we realized that not only had we boosted our sales, without discounting them, for our kids’ bikes, we also helped our customers recognize the quality of our bikes. This program has become so popular that I even have my own kids’ friends coming over to the house to tell me how cool it is. Think these kids will remember Zane’s when it comes time for them to buy bikes for their own kids? Talk about a lifetime relationship!