Author: Chris Zane, Founder and President of Zane’s Cycles
Publisher: Ben Bella Books – 206 pages
Book Review by: Sonu Chandiram
Chris Zane started in business as a pre-teenager, registering a business and getting a state ID at age 12. He bough his first bike shop at age 16, and built Zane’s Cycles into the biggest bike shop in Connecticut by age 30. Today, it is one of the largest bicycle stores in the United States.
Zane was 46 when this book was published in 2011. In 1985, when he was 20 years old, he started receiving various awards. Among them was the Better Business Bureau Award of Recognition for Customer Service and Outstanding Business Practices. North American Bicyclist Magazine has named him “North America’s Best Bicycle Retailer” and Fast Company Magazine awarded him the 2006 Customer First Award. Zane’s Cycles also holds the distinction of being the largest dealer in the world of Trek Bicycle Company.
When this book was published in 2011, Chris Zane wrote that the total sales of his chain of bike stores were over $15 million. But what is more remarkable is that the bike stores’ sales revenues have been growing briskly at 23.5 percent annually.
What is really noteworthy is that Zane’s creative marketing techniques have been used as business case studies in more than a dozen college textbooks. They have also been cited in articles in the Associated Press, Fortune, the Harvard Business Review, The New York Times and The Wall Street Journal, as well as being profiled in Alpha Dogs, a HarperCollins bestseller by Donna Fenn.
Chris Zane believes in and provides outstanding customer service with a missionary zeal. That is the bedrock foundation of his business philosophy. How many bike shops do you know that offer a lifetime service guarantee? This includes coverage of all parts and labor, including free tune-ups for the life of your bike.
And, for a small one-time fee, Zane provides “flat tire insurance” which means all your bike’s flat tires will be fixed for free, forever. And how about this: for kids’ bikes, a free trade-in program that gives full credit for the purchase of a new bike, even after ten years (or more) later.
Zane knows the life-time value of a customer that keeps coming back again and again and buys more products, and compares that with the cost of acquiring a new one. Earning long-term loyalty of customers has empowered his business and shielded it from competitors.
Chris Kane has written this book of practical advice based on his experience of over thirty years in the bike retail business. (“I consider myself to be in the ‘experience business, not in the ‘selling stuff’ business,” he writes. The lessons he has learned are what he shares with readers, which can be applied in their own business to grow sales volume and importantly, customer retention. Also, to grow customer satisfaction, upon which, it is difficult to assign a true dollar value.
But for Chris Zane, the average customer is worth around $12,500 in revenue over a lifetime, of which, about $5,000 is profit. He does his very best to keep customers. And he makes them want to keep coming back and back and back. He not only wants his customers to keep coming back, but he wants them to bring in their kids, relatives and five friends. He says he wants them to see, from the very beginning, “how passionate we are about what we do.”
This easily readable book of 10 chapters and just over 200 pages is, I feel, written not only from what Chris Zane has learned and retained in his head, but also from his heart. With chapters entitled “building lifetime relationships“ and “a winning proposition” and “planting seeds” and “focus on continuous improvement,” who would think otherwise? Certainly these simple but important lessons are not coming out of a college business textbook.
For Chris Zane however, his entrepreneurial experiment was not a smooth bike ride from the outset. A big failure was part of that trip. He bought the bike shop in 1985 (when he was 16) with help from his parents and a $23,000 loan from his grandfather, with a 15 percent annual interest so that he would not lose any part of his interest income. The bike shop business was growing very well and four years later, it reached a point wherein it was generating $100,000 in revenue over 12 months.
Chris Zane now wanted to try something bigger, like open up a large store in a downtown mall in New Haven, Connecticut, and sell all sorts of outdoor gear like tents, sleeping bags, knapsacks and the like. So Zane’s Outdoor was born.
At the end of about two weeks, with hardly any sales but huge operating expenses, it became clear that the large new store was eating up cash quickly and Zane was headed for financial disaster. He realized his huge blunder of picking the wrong location where there was virtually no foot traffic.
In about ten weeks, Chris Zane had lost about $100,000, which represented all his retained profits from the bike shop plus all his borrowings. Now, he did not even have the money to pay for all the merchandise he had bought on credit. So he shipped back to his vendors as much of their goods as they accepted and transported the rest to his bike shop. He sat silently in the back room of his old bike shop and for one the few times in his life. he felt depressed.
Then an idea came to his mind that would solve his problem of paying back his vendors the remaining $25,000 in debt, after which he would go to college. He decided he would do a big blowout event in April 1987, calling it a Big Wheel Sale. With heavy advertising, it worked. It worked so well he cleared $45,000 in a single weekend, and after paying off his vendors, he had $20,000 remaining in his pocket.
Chris Zane was pleasantly surprised at the unexpected outcome and thought maybe he will try it again. But this time, he would let his customers guide him as to what they wanted and he would focus on learning how to make them happy, instead of simply trying to sell them all sorts of stuff.
With this big business setback of losing whatever he had put aside for two years, getting into debt, repaying it, and regaining $20,000 – a portion of the money he lost – Chris Zane re-invented himself and learned valuable lessons he imparts to us for our benefit. He learned the art of Reinventing the Wheel and shares his life-changing experience with us.
This is an inspiring book from which we can learn much. These are lessons that cannot be learned from college texts, but from the so-called ‘school of hard knocks.’ Each chapter contains refreshingly new pointers on a different aspect of business, something not found in typical business books. Get it and learn to reinvent your business and your life.