Chris Zane is in the experience business. Whether it's selling bikes in his Connecticut store or filling orders for corporate rewards programs, Zane knows a successful business is about more than just selling stuff. He tells people to picture a 7-year-old riding on a two-wheeler for the first time. It's not just a bicycle to her; it's the "first real freedom that kid has ever experienced away from the parental grip."
And that's what he's selling: Experiences.
More than a decade ago, he used that concept to launch a business filling orders for custom-fitted Trek bikes geared for corporate rewards programs. He has sold his bikes to credit card companies for their rewards programs and corporations who offer them as employee incentives. Zane's Cycles builds the bikes to specification, and all the recipients have to do is attach the front wheel, using the included instructions. The end goal: Creating experiences that will make customers feel good about the reward product—and not irritated that they have to spend hours putting something together.
Zane, 46, got his start at age 12 fixing bikes in his parents' East Haven, Connecticut, garage. At 16, he convinced his parents to let him take over the lease of a bike shop going out of business, borrowing $23,000 from his grandfather—at 15 percent interest. His mother tended the store while he was at school in the mornings. In his first year, he racked up $56,000 in sales.
Early on, he decided he wouldn't nickel-and-dime customers and stopped charging for any add-on that would cost less than a dollar. He installed a mahogany coffee bar in his shop and gives away free drinks. "We're looking at the lifetime value of the customer," Zane said. "Why ostracize someone over one or two things that might cost us money when understanding the lifetime value gives us the ability to justify it?"
Zane recalls a customer who wrote him saying that he was completely let down by his experience at Zane's because no one helped him on an initial visit, and the bike he had purchased was too large for him. Zane passed the note on to his store manager, telling him to take care of it. The manager invited the customer to come back into the store where they refit the bike at no charge, and threw in a few extras, like a toe clip and handlebar light, for free. Why not just chalk up the unhappy customer to a casualty of doing business? Because, Zane says, a happy customer will shop at his store for years to come—and tell his friends about it.
Not that every policy he's tried has paid off. The store once offered a service where if a bike needed repairs, they would pick up and drop off the bike to the customer's home. But it meant that some of their best customers weren't coming into the store and seeing new products that were coming out. "We didn't have a way to entice them to make an additional investment in their sport," Zane said. So he continued the pickup and delivery service for those who had bought a bike under that window, but decided it was a losing proposition for the long haul and discontinued the service for new customers.
Over the last few years, Zane has expanded the business to include items like gaming systems and racing strollers. Consistently expanding has allowed him to keep his average annual growth rate at 23.5 percent for the last 30 years. He expects to close this year with $21 million in sales. He's come this far with the help of store policies that would make big box stores blush: Lifetime service guarantees, 90-day price protection, and a trade-in program for children's bikes where parents get 100 percent of the purchase price applied to their child's next bike.
Zane's corporate client business has grown so much that his Bran ford Connecticut-based store now accounts for only about a quarter of his revenue. But he's got plans in the works to expand even more, opening 100 stores over the next decade.
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