By Ben Rundle | Portfolio Manager at NAOS Asset Management

Jim Penman is the founder of the hugely successful Jim’s mowing franchise business which went from a revenue of $24 to the world’s largest franchise chain and a turnover of over $400m.

The title of his book ‘selling by not selling’ is a concept that Jim learned in his early days of running a business and is a key tenet to which Jim ascribes the success of the business. ‘Selling by not selling’ is Jim’s way of saying that if you help your customer by recommending a product or service that is best for them, not just the product or service that you have for sale.

By doing this the customer will trust you and eventually be your customer for life. The story reminds me of customer service examples I have seen by some of the best companies in the world.

Home Depot for example has their returns policy stuck to a car tyre in one of their stores. When asked why that was the case, the store operator said it was because a customer came into the store wanting to return a car tyre.

Even though Home Depot didn’t sell car tyres, they gave the customer a refund anyway. Why? The answer was because the lifetime value of a customer is worth more than one tyre!