About a year and a half ago, I blogged here about how our business model is a little like Trader Joe's. I flatter us with the comparison. We have a lot more in common with a Belgian Olympic track cyclist than Trader Joe's. Still, enough similarities exist between us and the vaunted grocery store that I wasn't shouted down in the comments.
Recently I did business with another company that made me think about what we're doing and why our customers respond the way we do. When my neighbor's tree Derechoed the crap out of my minivan I set off to get a new one. I'm a used car buyer so I went to Cars.com and AutoTrader.com and some others, trying to find something with relatively low mileage at an equitable price. A bunch of dealers had some that fit the bill, and I called about no fewer than 6 of them. Each time, the response was the same - "Oh, that one sold. But I do have one that is 3 years older with 30K more miles that's within your price range, if your price range increases by $3K." I told them all no thanks but the calls persisted. "I just found one that's exactly what you want. I know you said you want a minivan but this is a crossover. It doesn't have the third row or cargo space you require, but it has 4-wheel drive. When can you come over for a test drive?"
Baited and switched, badgered and browbeaten, I decided to change my strategy. Instead of starting with the product I wanted, I started instead with the company I wanted to do business with. In this case it was CarMax.
I'd sold cars at CarMax but never bought one, so I was a little familiar with them. But buying a car immerses you into their model, and if you're a customer in a market characterized by asynchronous information and byzantine distribution and pricing (which you are, if you're reading our blog), the CarMax model is refreshing. First, they don't negotiate on price. My sales guy, Tony, told me that the best part of his job is how powerless he is. "I have no authority to change the price, set financing terms, come up with a trade-in value. I can't even give you a free travel mug. And I love it - it makes people trust me, which they ought to because there's no reason for me not to tell the truth."
The other thing CarMax does that shows they are entirely organized around the customer experience is that Tony gets the same commission no matter what car he sells. If I buy a $7K compact, he gets paid. If I buy a $45K luxury SUV, he gets paid the same amount (and I get strung up by my ankles when I get home). This creates zero incentive to sell someone something they don't really want or need. And for a used car dealer, they stand apart in the quality of the cars they sell. They inspect all their cars extremely thoroughly, choosing to sell only the best of the ones they bring in (Tony said it's about 10% at his store), flipping the rest at auction (where they end up at other dealerships). They also perform any repairs or maintenance the cars need, held to a higher standard than the states where they operate. For example, I bought mine in MD, and their standard for tire tread is 2x the remaining tread than a MD state inspection requires. Tires that don't have that much are replaced before the car is sold. They'll let you bring your car back no questions asked for 5 days, and they will also fix anything that goes wrong in the first 30 days, no charge. It's a policy that instills confidence and is a meaningful differentiator in the used car business. It costs them money, but it brings them a lot of sales. Most importantly, it shows their customers (and their employees) that they're serious about getting it right. Their model is no accident of course. They know it makes a difference in how they're perceived, so they made it the cornerstone of their advertising with the tagline, "Start Here."
Buying a bike is not unlike buying a car. We're nowhere near as accomplished as CarMax, but we share their philosophy about customer respect. We don't negotiate, don't discount, don't annoint some customers as more worthy and give them a special deal in the guise of a "sponsorship," and we tell the truth about where our products come from, and what kind of performance they can expect from them. We don't resort to hyperbole or obfuscation, and want our customers to know as much as possible before making a decision. We don't just want customers; we want satisfied customers. That only happens if you meet expectations, and like CarMax we're not leaving that up to chance.
Lately I've noticed something that suggests some people think of us in the same way as CarMax's customers think of them. We've been getting a lot of requests for a 29er frame, a TT bike, 650b wheels, disc road and cross frames, singlespeed MTB frames, aero disc rear wheels, track wheels, even a tandem bike. When we tell people we don't have all that stuff the response is usually the same. "Damn. Let me know when you do - I want to buy from you guys."
What this tells me is that a lot of you are buying November first, and the products we sell second. You're Starting Here, with our brand, which is immensely gratifying to us. Dave wrote previously about how we're not yet in a position to Novemberize every corner of the industry - if we tried we would lose some of what makes people trust us in the first place. Trying to grow too quickly would come at the expense of QA and thoughtful product strategy, which would ultimately erode customer satisfaction and leave us less differentiated. We're not interested in being the place you go to get a cheap bike. We want to be the company you trust, that happens to sell the products you want.
So we're sorry to all the people who Start Here and don't find what you want. But we're pretty damn jazzed to be in a position to disappoint you.