by Mark T. Palermo, CEO

First and foremost, congrats to the many savvy Focus and Signature Salon teams who embraced the content in our most recent Business Alert entitled "Unsettling Hairdresser Misperceptions Accentuate Downward Trend in-Salon Take Home Sales". I have received numerous success stories about the positive impact from its message and I applaud all those who took action.

This issue of the Vanguard Business Academy offers an idea that not only tackles the challenge outlined in our Business Alert, but also presents solutions for other pervasive issues salon entrepreneurs confront.

Ask yourself these questions: "Am I interested in...

...getting my service quality to an optimal level, and keeping it there?"
...attain a greater return on investment from employee development?"
...holding myself and the team more accountable for providing a "knock your socks off experience" every time?"
...putting the Take Home function on automatic as a profit generator?"
...meeting clients' expectations regarding home hair care and style replication?"

And the really big one, 

...am I interested in making my business recession proof?"

The idea? "Service Guarantees"!

No, it's not an original idea by any means. And, during robust economic times such quality assurance tactics aren't all that important. However, considering the landscape of our economy and industry today, the time is right as this one can create BIG results.

I'd like to establish three key aspects of the idea; they are (1) Characteristics, (2) Outcomes, and (3)Feasibility, i.e. is a service guarantee good for me at this time? Since I am a bottom line kind of guy, I'll break them down in a concise manner.

Characteristics: There are four (4) essential characteristics of service guarantees that apply specifically to the professional salon industry segment:

1. Meaningful - A good service guarantee should resonate with clients in a manner that builds confidence in the salon's service capabilities. Consumer
   confidence is a huge issue considering shifting 'recession' psychology. The more you are willing to put on the line, the more they will put in your cash
   register.
2. Easy to understand and communicate - In-salon signage serves as the best means of communicating the service guarantee. For example, I have
   seen salons hang signage over the reception area that reads:

"We proudly guarantee your service so long as you purchase and use the Paul Mitchell professional products prescribed by your stylist."

3. Easy to invoke - Making it easy for clients to invoke a service guarantee is vital. It's important to educate clients on the process. Again, this can be as
    easy as providing information through salon marketing material such as brochures, menus, and your website.
4. Credible - This is an outcome of effectively implementing the three aforementioned characteristics. Creditability with a service guarantee is dependant
    upon the zeal in promoting it as the ultimate consumer quality assurance program.

Outcomes: A well designed service guarantee will challenge your business to:

  • Understand all the elements of your "Service Delivery Process" (SDP). At the Vanguard distributorship we refer to this as the "Order Management Cycle". At our schools we call it, "Client Flow". A SDP simply includes all the steps in the service process in sequential form. A good example (and great tools) would be the "2-Minute Plan" and "10 Opportunities".
  • Uncover the root causes of service challenges. I refer to this as the "plucking our head from the sand" component. If you are all about service excellence, then chances are you are equally passionate about the continuous effort to uncover glitches in your business systems. Even the most fine-tuned businesses tweak systems, ongoing.
  • Become more focused on all resources that contribute to service quality. Raising the stakes with a service guarantee will make a salon team more appreciative of any and all service support systems. They become more focused in staff Pow Wows, more attentive during VSS/JPMS in-salon classes, and, motivated to invest in themselves by attending Vanguard sponsored advanced trainings such as Hair Camps and JPMS' The Gathering. Holding the team accountable while providing tools and resources to succeed is a winning combination for greater synergy and prosperity for all involved.

Feasibility: determining if a service guarantee is good for your business. A service guarantee is an absolute must if:

1. Service pricing is higher than industry averages. This automatically positions your salon as a "premium priced" service entity. Commanding premium
    prices during tough economic times requires extra effort and savvy marketing.
2. Client self-esteem is an important component of "service desire" (demand).Consumers willing to pay more for salon services expect more than a cut, color,
    and style. Leaving the salon feeling better about themselves places a value on the experience that goes beyond monetary terms. 
3. The level of client service knowledge is low, i.e. "I need help in knowing how to replicate the look and the products my stylist used in creating the look."
    If you need help understanding this read my previous Business Alert.
4. The negative consequences are high. Yep, you read that right. If your first reaction to this idea was fear, you absolutely need to initiate a service guarantee.
    If your reaction is confident, then jump on it as you will most certainly get your business one step closer to the goal of optimal performance, i.e. synergy,
    impeccable service, consistency, revenue growth, and a bottom line that will boggle your mind.
5. Client impression of service quality in the industry is low. Believe me, to a large extent it is. Point of fact; only one-third of the US population frequents a
    full-service beauty salon, and, still to this day, a majority of professional working women question the efficacy of professional salon products and services.
6. The business depends on service frequency.

Still questioning the value of the idea? Consider the impact of service guarantees had on Dominos Pizza and Men's Warehouse. Both went from young, small businesses to mature, dominate players in a matter of a couple years. This was a direct result of promoting the heck out of their service guarantees. What I find fascinating about these two success stories is the fact that they are "product" producers that differentiated themselves with a "service" guarantee.

During times when consumers are hyper-sensitive with discretionary spending, service guarantees are a no-brainer. I believe the service guarantee can be the single most reliable way to identify operational issues needing improvement, as well as, maximizes your investments in attaining high levels of customer satisfaction and loyalty - two essentials components for any business interested in persevering through whatever obstacles the economy, competition, and other known or unknown threats can throw your way.

"I guarantee it!"

 

Mark Palermo is the CEO of Vanguard Salon Systems, Inc., a full service beauty distributor,Vanguard Consulting, an industry research and consulting firm, and Vanguard College of Cosmetology, A Paul MitchellPartner School . He has a BA Degree in Finance and Management with a concentration in Marketing. Prior to joining the professional beauty industry, Mark worked as abusiness analyst for the prestigious Dun &Bradstreet Corporation. Mr. Palermo has been recognized for his perceptive analysis and intuitive foresight. He has a remarkable track record for predicting industry trends for more than 18 years.

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