Competitive pricing is fine but I'll pay more knowing that I'll be taken care of. And I do.
I agree 1000% (if that's possible).
On principle I try to buy from one of my two LHSs when I have the opportunity and I check their stock for what I am after before I look elsewhere.
However the best service has come from a forum sponsor who posts info on shipping dates, is clearly enthused about the products we crave and answers my email inquiries the day that they are written - I probably don't need to name him.
This definitely sets him apart - even or perhaps especially in the era of internet shopping.