Michelle de Haaff

Customer experience costs money. So, when it comes to your business, that makes it a cost center, right?

Sure — if that’s how you treat it.

Chris Zane, founder and president of Zane’s Cycles, likes to think of things very differently. He shared his approach in a keynote at Medallia’s Experience 2014. The core of it? Understanding that there’s a lifetime value to every one of his customers. Zane has calculated that value is approximately $12,500. To lose a customer is to see that revenue walk out the door… and into the arms of their competitors.

This is basis for everything inside the business. And it’s not just a number that rests in the head of the CEO — it’s shared widely with everyone inside the organization. The result is that every employee understands what’s at stake with every customer interaction — and it informs how they treat every customer. An example that Zane shared was how a frontline employee reacted when he made a mistake when dealing with a customer. Most frontline employees might acknowledge the mistake and even apologize. But with the culture that Zane has built, the reaction of this frontline employee was to write a check out to the CEO for the amount he’d just cost the company.

Having an understanding of the value and importance of every customer, and then sharing that across the organization, has been key to creating a customer-centric culture. But that’s not all that Zane has done to retain customers. In order to protect the lifetime value of each of them, Zane has built out some very customer-centric strategies. This includes things that might, at face value, seem like poor business decisions. For example: all of Zane’s bikes carry a lifetime parts warranty. A lifetime free service. And a 90-day price protection.

There’s no fine print. No lines in the sand, says Zane.

The counterintuitive insight that rests behind Zane doing this? By not drawing a line in the sand, by not telling customers what they can and can’t have — by never saying no — customers self-moderate. He drew a parallel with his approach and that of Nordstrom’s storied return policy. When given way more than what they expect, customers only take what they think is reasonable. Zane demonstrated this to the audience by walking around the room with a bowl full of quarters — offering members of the audience to take as many quarters as they wanted. Although someone could have taken a bowl full of quarters, people only ever pulled out a few coins at a time. On the other hand — what do you think folks would have done if you told them they could take up to 10 quarters? Zane’s point — once they perceive a line in the sand — customers will push up to that line, and even want to push beyond it.

What it all boils down to? Zane has put the customer at the center of his business — understands the value of each customer, makes sure everyone in the organization understands that as well, and built out a series of strategies that show customers just how valuable they are.

Photo credit: Yoshikazu Takada