Question

Studio 1510 is a high-end salon located at the heart of the city centre. It is owned by a couple of highly talented stylists. The salon mostly focuses on hairstyling services and offers only limited spa services. It also consults many beauty magazines and fashion shows all over the country to remain up to date with the latest trends in hairstyling. The owners make sure that all their stylists are constantly trained on the latest styling techniques. Studio 1510 has a very loyal clientele, and most of them are impressed that the stylists use 100 per cent naturally-derived hair products. The sale of these hair products also forms a substantial part of the revenue. The business has been profitable since it was set up 15 years ago, but it has started facing increased competition from a couple of salons and spas that have recently opened in the city centre. These salons and spas are equally skilled at hairdressing but also provide spa services. They boast of professional skincare products, private spa areas and medispas. Faced with intense competition and sluggish profitability, the owners are looking at increasing Studio 1510’s offerings and designing a balanced scorecard for the company to improve its internal functions. Required What are the various non-financial performance measures for Studio 1510’s balanced scorecard?

Answer 1

The non-financial measures for Studio 1510's balanced scorecard are as follows:-

1) Diversification - Studio 1510 focused mostly on hairstyling services and offers only limited spa services. Whereas newly opened salons and spas provides spa services alongwith saloon services and have a boost of professional skincare products, private spa areas and medispas. So, to compete with them Studio 1510 needs to diversify its business and begins to provide services or products which are providing by new saloons and spa. Variety of services or products always attracts clientele.

2) Customer retention and churn - Retention means how many customers continue to buy from you and churn means the number of existing customers who are no longer buying your products or services. Obviously the goal of Studio 1510 is to increase the retention number and reduce the churn number. The key is to define when a customer is no longer a customer so that they can reduce the churn.

3) Customer experience: Customer experience has direct impact on customer retention and churn. Studio 1510 need to take into account all of the major touch points where a customer interacts with them and must establish key criteria for what constitutes a superior vs. subpar experience.

4) Innovation: Innovation is your ability to bring new products / services to market successfully. Both the number of new products in the pipeline and the adoption rate of these new products reflect your company’s ability to bring value to your customers and the market. Studio 1510 needs to innovate new services and products which are not provided by new saloon and spas.

5) Promotional Offers or discounts: Studio 1510 must provide clientele promotional offers or discounts to attract new clientele. Clientele always attracts with promotional offers or discount in addition to quality of services or products.