IB Business Management HL Year 2 Internal AssessmentTo what extent would increased interaction with their clientele help Salon Freda pinpoint areas for improvement within their current operations? Student Name: Audrey LingCandidate Number: N/AResearch Proposal/Action Plan Word Count: 499Written Report Word Count: 1,946I confirm that this work and information is my own, and that I have acknowledged the words of all others, written or verbal.Signature: ______________________________________Date: _______________________________AcknowledgementsI would like to sincerely thank my mentor Michael Nalu for not only allowing me the great privilege of working with Salon Freda, but also going above and beyond to provide me with the guidance and resources that I needed for my internal assessment as Salon Manager. I would also like to thank Freda Ansara for founding such a fantastic business and raising it from the ground up into what it is today.Last but never least, I’d like to express my wholehearted gratitude towards Mrs. Jodi Forster for all of her wisdom and experience she has imparted to me throughout our years together.AuthenticityMichael Nalu Business Manager Salon FREDA41460 Grand River AveNovi, MI 48375September 24, 2017Dear Ms. Audrey Ling, I Michael Nalu, Business Manager at Salon FREDA would like to inform you that you have been accepted to work alongside with me for your Internal Assessment Project. Please accept our most sincere congratulations! I accepted to be your mentor based on your passionate sincerity in your thirst for knowledge and experience. I believe the details of your assignment will be well fulfilled working with us. My lovely boss Freda Ansara truly started this brand image from nothing. She now has a prestigious reputation locally and globally. I love how Freda keeps us a ‘small business’ but is still going big! Should anyone regarding this amazing project need anything from me, please feel free to call me directly at Salon FREDA.I can be reached during salon business hours at:248.344.1900 Freda was flattered by your letter by the way! Her and I both invite you under our wings to mentor you. We wish you the best of luck; lots of success and a memorable mentorship with us! Sincerely,Business Manager of Salon FREDA,Michael Naluand founder/owner ofSalon FREDA and Faces by FREDA, Freda Ansara Research Proposal and Action PlanWord Count: 499Research QuestionTo what extent would increased interaction with their clientele help Salon Freda pinpoint areas for improvement within their current operations? Proposed Methodology-Rationale for study:Investigating whether or not increased interaction with clients aids in determining places for improvement may prove to be extremely beneficial.Areas of syllabus covered:Market Segmentation (4.2)- summarizes both the importance and the process of market segmentationPerception Mapping (4.2)- defines and states the value of a company’s brand perception.Customer Relations Management (4.2)- outlines why it is so important for a business to have good customer relationships. These areas are all pertinent to me because they are directly focused towards either the direct or indirect interaction between Salon Freda and clients.Possible sources of information:Primary Research:Interviews and surveys- to gather valuable firsthand information that is both current and focused. Secondary Research:Social media monitoring- to gauge past interactions between Salon Freda and clients. Articles- to discover research connecting customer engagement with business’ improvement.Organizations and individuals to be approachedClients:All clients for surveyAn equal mix of old and new clients for interview Mentors:Salon Manager Michael NaluFounder Freda AnsaraMethods used to collect/analyze data: Primary:Surveys to gather their opinions on various aspects of Salon Freda’s operations. This information will be useful because it will be focused, recent and reflect opinions of customers. A disadvantage is potential bias, as surveyees may be subjective.Phone interviews to ask clients for their opinions of Salon Freda. This allows me to ask more detailed questions and obtain more specific answers. A disadvantage may be nonresponse bias, as people may not pick up the phone/be unavailable.Secondary:Analysis of Salon Freda’s past activity on their Facebook and Instagram accounts to gauge interaction with clients. This could be either helpful or disadvantageous as past social media tendencies may not reflect current tendencies. Articles or proven research that correlates customer interaction with a business’s improvement. Could be outdated information, however, and could also pertain to a different industry, thus making it unhelpful for my purposes.Business tools:Customer relationship managementBrand loyaltyUnique selling pointProject timeline:Timeline:Create/distribute surveyFormulate interview questionsConduct interviewsAnalyze results from survey and interviewsApply business tools and theories to answer the research question and make recommendationsDelays:Slow primary data collection, but given that the total timeframe for this project spans from September to January, as long as primary data is collected throughout the entire period, sufficient data will still be obtained.Anticipated Difficulties-Subjective responses from surveyees/interviewees: they may not want to express their true feelings and seem “rude”. This can be overcome by collecting as much data as possible, as we are not necessarily looking for the most objective information- we are simply looking for ideas for improvement.Table of ContentsResearch Proposal and Action Plan Page 4Executive Summary Page 9Introduction Page 10Methodology Employed Page 11Main Results and Findings Page 12Analysis and Discussion Page 16Conclusion and Recommendations Page 19Bibliography Page 21Appendix Page 22Executive SummaryWord Count: 186Salon Freda is currently enjoying good business, but they are always looking for areas for advancement. To identify ideas for improvement, I investigated the extent to which increased interaction with their clientele would help in their efforts.By conducting primary research by way of a survey and an interview, not only was I able to find out what Salon Freda was doing right, I was also able to discover some elements that can be improved upon, namely the relative lack of demand for the products they sell as well as the loss of clients to competitors as a result of inflexibility concerning preferred stylists. To address these issues, customer relationship management, brand loyalty, and unique selling points should be considered and utilized.Furthermore, through my secondary research, I have concluded that though Salon Freda does have a history of sufficient client interaction through social media, they can choose to elevate it, which was also recommended by several articles I consulted. To answer the question being investigated, however, increased interaction with clients should indeed help Salon Freda improve, though further investigation on this matter is also recommended.Introduction Word Count: 228The modern hair salon has been around since the late 1800s, and from then until now, the hair salon industry has grown exponentially, taking in over 44 billion dollars a year and employing over 1.4 million in the United States alone.However, with the vast size of the hair salon industry, the competition between existing hair salons is unbelievably stiff, which is why hair salons need to exceed simply providing services in order to set themselves apart. In this, there is a reason why Salon Freda is widely regarded as one of the finest salons in the greater Novi area.Since its beginnings, Salon Freda has existed solely to fulfill the needs of their clients by providing services of utmost quality. Still, they don’t want their clients to just feel satisfied- they want to go above and beyond to ensure that every person walks out feeling confident and brand new. This has led to Salon Freda’s already stellar reputation, but as every good business should, they are always striving to take their commitment to their clients to new heights. However, it’s difficult to determine exactly which areas could do with improvement. This has therefore led me to the following research question: To what extent would increased interaction with their clientele help Salon Freda pinpoint areas for improvement within their current operations and enhance their customer relationship management? Methodology EmployedWord Count: 211 I conducted my secondary research first to establish context before primary data collection. I consulted several articles that commented on the importance of customer interaction when determining areas for improvement. I also gauged Salon Freda’s customer interaction tendencies by monitoring past social media behavior.After creating background, I conducted primary research in the form of a survey and interviews. When creating the survey, I included demographic questions, questions asking surveyees to rate elements of Salon Freda’s performance, and questions about the surveyee’s relationship with the business- all to aid with market research and segmentation efforts, as well as assess the current consumer perception of Salon Freda. The survey was distributed to willing surveyees during business hours, and were compiled over a period of around 3 weeks. To conduct the interview, I called an equal number of new and longtime clients and asked them to reveal their reasons for choosing Salon Freda as well as what they think Salon Freda could fix.Hesitance to disclose true feelings about Salon Freda in fear of being disrespectful or rude could impact validity of my results, but the nature of my investigation is accommodating to subjectivity, since as long as a lot of surveys and interviews are conducted, ideas for areas for improvement will appear.Main Results and FindingsWord Count: 293Secondary Research:Salon Freda already has very active Facebook and Instagram accounts, demonstrating their focus towards customer interaction. However, I did notice that they did not take advantage of the commenting features of these platforms too much.The articles I consulted all concluded that customer interaction by way of activities including conducting surveys and upkeep of social media accounts is conducive of not only a successful business, but also one that seeks to improve.Primary Research:The interviewees stated that they were extremely satisfied with their past and present experiences with Salon Freda, many citing the “superior provision of services, client-geared company culture, and friendly atmosphere” as the reason why they were drawn to Salon Freda and why they choose to stay.From having surveyees utilize the Likert scale on the survey, I was able to conclude that most clients hold Salon Freda in high regard, as there was an overwhelming majority of 5s in the responses, the highest rating. However, the survey results also brought to light some of Salon Freda’s best aspects and even some shortcomings.Figure 1Evidenced by the figure, most clients don’t frequent competing salons. However, of the ones that do, they stated the reason being their preferred stylist at Salon Freda was unavailable.Figure 2The clients’ preferred stylist and customer service were the most popular answers for this question.Figure 3Ratings for “being able to visit stylist of choice” had an equal number of ratings of fours and threes. This is consistent with the fact that in the interview, several interviewees stated that they wanted more flexibility when scheduling with their preferred stylist.Figure 4While the number of ratings of three actually exceeded the number of fours for the “product retail option” aspect.Figure 5This aligns with the information displayed above, stating that most clients do not purchase products from Salon Freda’s boutique.Analysis and DiscussionIn this section, I will largely be using three main business tools and theories to analyze the results of my research: customer relationship management, brand (stylist) loyalty/market segmentation, and the aspect of a unique selling point.Customer Relationship Management: A lot of Salon Freda’s current success can largely be attributed to their stellar customer relationship management and customer service. It is easy to understand why good relationships with customers is extremely important in business, as no one would want to give their patronage to a company who has not treated them well. When Salon Freda’s customer service is rated so high and is cited in interviews as the reason why clients return to Salon Freda, it is a clear indication that they are doing something right. However, one of the biggest downfalls of Salon Freda, mentioned in the interviews, was that the interviewees felt that when trying to schedule an appointment with their preferred stylist, they felt that there was a degree of inflexibility on the part of Salon Freda if the schedule for their preferred stylist was a bit tight. “I just wish that they would try a bit harder to squeeze me in”, said one of the interviewees. She said she sometimes got the sense that some of Salon Freda’s employees, especially the newer ones at the front desk, were not very accommodating when it came to honoring her stylist preference. This aligns with the fact that the “being able to visit stylist of choice” aspect received lower ratings, as well as the fact that of the people who did frequent other salons, they did so because their preferred stylist at Salon Freda was unavailable. So although Salon Freda already has a reputation for excellent customer service, by addressing this small flaw in their operations by streamlining scheduling procedures and making them consistent among all employees, they can elevate their customer relationship management to new heights. Brand/Stylist Loyalty and Market Segmentation In the context of Salon Freda, brand loyalty can be regarded the same as stylist loyalty. According to my mentor, trust between stylist and client is built over time. When a client first “tests the waters” and tries out a new salon and subsequently a new stylist, they will continue to come back to the same stylist if they are consistently satisfied with the results of their hair, building a stylist “loyalty” over time. After a stylist loyalty is established, however, if a client’s preferred stylist is unavailable, they will be reluctant to engage in “stylist switching”, which often leads them to another salon- their “backup” in case their preferred stylist at Salon Freda is unavailable. This poses a problem for Salon Freda. Though this may not threaten the very existence of the business, they are still losing business to competitors. Market segmentation may play a part in why clients are apprehensive of branching out to other stylist when their preferred stylist is unavailable. Michael stated that something he noticed was that the younger, trendier client tended to gravitate towards the younger, trendier stylists, and likewise the older, more affluent client tended to be more drawn to stylists that fit within their same demographic. This is demonstrative of the natural human tendency to be more comfortable around like people. Closer analysis of their client base could help Salon Freda identify potential holes in their employee portfolio. For example, if hypothetically Salon Freda found out that they had a lot of male clients between the ages of 35 and 39, they could hire a new stylist who fits within the demographic, as currently Salon Freda does not have any male stylists. This could not only help retain current clients, but reach new ones as well.Unique Selling Point:Another of Salon Freda’s weak points is the sales of the products they offer in their salon, demonstrated by the fact that over 70% of surveyees reported that they did not buy products from Salon Freda’s boutique, largely because they “already had products at home” that they used. The interviewees reflected the same sentiments, stating that they did not feel the need to buy new products at Salon Freda because they already “owned enough”.Furthermore, Salon Freda uses the products that they sell, many from these luxury brands, on clients’ hair during their appointment. Since survey results also reported that customers were overall very happy with the products used on their hair, we can determine that it is not the products themselves that lead to the lack of sales- there may be some underlying issues in promotion of the products that is the root cause.One of Salon Freda’s biggest points of pride is the fact that they are one of the very few retailers of several luxury haircare brands such as Kerastase and Oribe. This makes it even more interesting that Salon Freda’s product retail option is not rated higher, as this can most definitely be considered a unique selling point that Salon Freda has. Salon Freda can capitalize on their unique selling point and boost product sales by accentuating it when promoting their products and also having their stylists promote the products while clients are sitting in the chair, especially the aspect that clients can’t get these specific products in many other places.Conclusion and RecommendationsI. ConclusionThe whole reason why all of this primary research was conducted was really to see whether or not increased interaction with customers would result in ideas for improvement. It is indisputable that it did. According to the secondary research, customer interaction in the form of receiving feedback is one of the most beneficial things a business can do. After all, the key to providing the best services possible to clients is by understanding what they want, and what better way to find out than by simply asking? By conducting surveys and interviews, I was able to determine very specific areas in which Salon Freda could improve and implement business tools and theories to do so, all of which is relatively inexpensive and not time consuming. II. Recommendations Since it has become abundantly clear that increased customer interaction is extremely helpful in pinpointing specific areas for improvement, Salon Freda should continue along this path. They could consider occasionally conducting surveys and/or interviews similar to the ones conducted in this project, which were proven to yield legitimate ideas straight from the minds of clients. Or, they could make more use of their social media platforms, more specifically the commenting feature. Social media is a fantastic way for business to follow up with clients after the sale of either a product or a service, in Salon Freda’s case. Following up with a client would not only demonstrate tremendous customer service, but would also be beneficial in identifying anything that the client particularly appreciated or could have done without. However, to single out exactly which means of customer interaction would be the best for Salon Freda, additional research and investigation should be explored, possibly through trying multiple options and assessing which one was the most effective.Bibliography”5 Ways Surveys Can Help Your Small Business.” OPEN Forum, 11 June 2012, www.americanexpress.com/us/small-business/openforum/articles/5-ways-surveys-can-help-your-small-business/.”Hair Salons in the US: Market Research Report.” Hair Salons in the US Market Research | IBISWorld, IBISWorld, Aug. 2017, www.ibisworld.com/industry-trends/specialized-market-research-reports/consumer-goods-services/personal/hair-salons.html.Hoang, Paul. Business and Management. 2nd ed., IBID Press, 2011.”Improve Your Business With Customer Surveys.” Small Business Administration, The Small Business Administration, www.sba.gov/blogs/improve-your-business-customer-surveys.”Using Surveys to Get the Information Your Business Needs – Survey Says? Identify Your Objectives.” HBS Working Knowledge, Harvard Business School, 4 Nov. 2002, hbswk.hbs.edu/archive/using-surveys-to-get-the-information-your-business-needs-survey-says-identify-your-objectives.”Why Customer Experience Is Important” Client Heartbeat, June 2014, blog.clientheartbeat.com/why-customer-experience-is-important/. AppendicesAppendix 1: The SurveySalon Freda Customer Relationship Surveyx Name (Optional):x Age: Under 18 ? 18-24 ? 25-34 ? 35-49 ? 50-64 ? 65+ ?x Gender: Female Malex How long have you been a client of Salon Freda?First visit ? Less than 3 months ? 1-3 years ? 4-6 years ? Since opening ? x What makes your visit most special? (Check all that apply)Customer service ? Quality of products used/offered ? My stylist ? Close proximity to home ? Quality of services ? Other: ______________x Do you frequent another salon? Yes Nox If you answered ‘yes’ above, why? (Check all that apply)Schedule conflict between me/my stylist ? Closer to home ? More services offered ? More pleased with my hair results ? Stylist preference ? Other:________________x On a scale from 1-5, how would you rate us on the following? Ease of scheduling appointments ____ Wait times ____ Customer service ____ Services offered ____ The results of my hair ____ Products used on my hair ____ Product retail option ____ Being able to visit stylist of choice ____ x Do you pre-book your next visit before leaving? If no, why? Yes No: _______________x Do you purchase hair products from our salon? If no, why? Yes No: _______________x Which of our services do you use the most? (Check all that apply)Haircut ? Hair Color ? Blowout/style ? Hair Extensions ? Cut/color per visit ? x What specific aspects could Salon Freda improve on? Your time is greatly appreciated!Appendix 2: Survey ResultsAppendix 3: Interview QuestionsQuestions for new clientsQuestions for longtime clientsWhat drew you to Salon Freda in the first place?What was your first impression?What did you think was good at first?What did you think was missing?Why have you stayed at Salon Freda for all this time?What is something they consistently do well?What is something you still hope to see?