I worked in a shop for a couple of years and despite the boss being a bit of a tosser, (former PWC accountant who assumed that a bike shop could be run with no consideration for customer service) we had a loyal and informed customer base. Our mechanic was very knowledgeable (now works for Tim Flooks at TFTuned) and would happily answer questions and chat in order to ensure repeat business. I didn't know as much as he did, but did my best to give honest answers and make teas and coffees for the regulars who would often buy parts they didn't come in for whilst chatting over a hot drink.
Unfortunately when I decided to leave to go on my travels, the boss couldn't be arsed to do the day to day sales side so closed the doors. He wasn't a passionate cyclist, just thought he could make a wedge out of selling bikes (mental!).
Since that shop closed I have really struggled to find the quality of service that we used to offer.
My closest LBS sells high end kit (intense, lapierre, Turner etc), but when you walk in you can feel like it is an inconvenience being there. Plus although the mechanic seems very competent, I get the feeling that they would happily cut corners (bike came back from a service with barrel adjusters wound out - :evil: ) and I don't trust their work. There is an atmosphere of "unless you have a £5k rig that is less than 6 months old we're not interested". I have been in 5 or 6 times in the last couple of months and they still don't know my name or greet me with a friendly hello. I won't be using them again.
Fortunately my othe LBS (Bike in Bristol) have just extended their workshop - (they used to frustrate me despite their friendly, knowledgeable staff, they always had a 2 week wait to get your bike booked in for work). Testament to their service, but still cost them my business in the past. I will start using them again to do the stuff that is beyond my ability, but for now I am buying a stand and tools so that I can do most things myself. Incidentally they (Bike) will always try to match the prices on CRC where possible and if they can't they will knock some off. I know they probably hate doing it, but it is part of modern retailing.
I have heard it said that if you want to make a small fortune in the cycle industry, you had better start with a large one!