Why Give Away Free Service? Because It's Worth It
BY Janine Popick
Sometimes it makes good business sense to give away a product or service. Here's how it worked out for Zane's Cycles.
"No matter what kind of business you run, you should be in the relationship-building and experience-selling business because that's where you find the greatest success". -Chris Zane
I recently had the pleasure of listening to Chris Zane, founder of Zane's Cycles, talk about how focusing attention on Zane's customer experience grew his business from $0 to $17 million in revenue with larger than normal margins. It was amazing, especially since I'm a huge believer that the customer experience from soup to nuts (or in this case, pedals to gears) should reflect who you are as a company and who you're targeting. Zane's Cycles just plain gets it.
My question after listening to Zane's Cycles success was, is he selling cycles, or his brand? My guess is the latter!
For Zane's and for any business, when it comes to giving it away, it's all about the numbers. How much can you afford to give away to delight your customers enough to a) keep them coming back, and b) tell their friends about you?
Zane made it a point to understand the lifetime value of his customer. He knew what he should spend on building a quality product and what he could afford to give away on service. Plain and simple.
Here's how he put his business in high gear:
• Zane started with a great product that didn't need a ton of service. • Because of this, he gave away free service for life. • Zane's doesn't have a return policy, returns are unconditional. • If a customer finds a bike they've purchased for a less expensive price within 90 days, they get the difference back in cash right out of the drawer. They spend it in the store. • Zane's customers shared how great both his product and service was with the cycling community. • Customers came back. • New customers came in. • He put in a coffee bar. • He put in a kid's play area. • His competition could never catch up because their product is less-than-stellar. • His competition tried to give away free service, but because of their product quality, they spent too much and lost money on the offer. • Employees love working at Zane's, and they get paid well because they grew a great business. • Employees don't leave. • Customers are happy.
From the time you buy your first bike, to when you get it serviced and buy your next one, you know how you'll be treated. Treating customers right is ingrained in every employee and since employees love what they do, love who they work for, and love their customers, customers are treated really well. A total win-win!
I think it's a great customer experience driven by the numbers of the business. Are you looking at your customer experience this way?
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JANINE POPICK is the CEO and founder of VerticalResponse (a Deluxe company), a leading provider of self-service email and event marketing, online surveys, social media, and direct mail solutions. The company was ranked No. 2,802 on the 2012 Inc. 5000. @janinepopick