Knit Purl Gurl has an interesting post on her blog about customer treatment in local yarn shops. I have to say that I have experienced some atrocious customer service in some yarn shops, but at the same time I have had great relationships with lys owners. That said, I truly believe that just like we have yarn standards and pattern formatting standards, the TNNA need to establish standards for customer service among their members.
As a customer service rep for over 5 years I understand how tough it can be for LYS owners to give good customer service, especially when it seems that people are buying products from other stores. However, let this be food for thought: do clothing stores become offended when you shop while wearing clothes from another shop?
Of course not.
The preferred approach is to take the opportunity to show how your wares are better, and if you think you can't compete, there's one thing that LYS owners can offer that online shops can not: a personal experience. Create personal connections with each of your sellers. That's how you build loyalty. Guilting your customers will only drive them away.
A lot of LYS owners get into owning yarn shops thinking they'll get to do a lot of knitting, but what they don't realize is that retail is partially a performance art. You need to know how to perform for your customers, by connecting with them and offer them true value.