1. As a team, brainstorm a list of service failures that could occur in a salon and day spa. (The examples of a bad haircut, damaged nails, and losing half an eyebrow during a wax job were mentioned above, but there are many more possibilities.)

Then identify ways that you can resolve each problem on the list quickly and to the customer’s satisfaction.As you read in Chapter 5, crisis management planning is an important component of business planning and corporate communication.91 Typically, when you hear “crisis management,” you think of a company responding to catastrophic publicity, but companies also need to think about managing smaller negative encounters because those encounters play a large role in customer retention. The retention rate for customers whose complaints or problems are resolved satisfactorily is 70 percent; when complaints are resolved quickly as well—typically on the spot—the retention rate soars to 95 percent. But when complaints are not resolved to the customer’s satisfaction, customer retention falls to 46 percent. And research shows that for major purchases

(defi ned as being over $100), customers whose complaints are unresolved stay with the company only 19 percent of the time. So, companies should have a plan for responding to customers’ complaints and problems.

Putting service recovery plans in place enables companies to respond quickly, the biggest factor in reversing the damage from negative customer experiences.

In the spa industry, customer service and satisfaction are paramount. Not only do customers have high expectations for spa and salon services such as massage, skin treatments, nail treatments, and hair coloring and cutting, but spa service tabs can quickly surpass that

$100 threshold defi ning major purchases. And what would upset a customer more than a horrendous haircut, botched fi ngernails, or losing half an eyebrow during a wax!