Build Buzz to Turn Your Salon into the Talk of the Town

April 9th, 2014 by Buzz to Turn Your Salon into the Talk of the Town
By Elizabeth Kraus

Many salon owners will quickly tell you that word of mouth is their “best marketing.” Dig deeper and you may find that they believe word of mouth to be their best marketing, because they are not actively promoting their salon using other marketing tactics, so word of mouth is their only source of new clients (but not enough new clients to actually keep the books full!)

One reason that word of mouth marketing is so powerful is because it is so credible. A “real person’s” word of mouth recommendation carries more weight than paid advertising and marketing, because the person making the recommendation has little or nothing to gain personally, and puts their own reputation at risk by – essentially – personally endorsing a salon or hair stylist.

Why a Passive Marketing Approach Won’t Work

Let’s assume your salon provides a friendly, professional, and truly enjoyable experience that nearly always produces client satisfaction. Having done so, you hope it’s enough to motivate your clients to go out there and proactively recommend your salon to their friends, family, and co-workers, and to take the time to leave positive reviews and social status updates about your salon online.

Unfortunately, merely meeting expectations by providing a “satisfactory” client experience is not usually enough to garner the kind of proactive, “I can’t wait to talk about it!” motivated sharing that you need to build your salon’s book of business.

Your clients might recommend your salon to co-workers or friends if asked, but they aren’t likely to bring it up otherwise; nor are they likely to remember to go onto online review and rating sites like Google+ pages, Yelp, CitySearch, and others to leave positive reviews about your salon.

What is Word of Mouth Marketing?

Without a deeper understanding of the real meaning of “word of mouth marketing”, it’s difficult to develop and implement an effective strategy that will result in more salon word of mouth marketing referrals.

Wikipedia defines word-of-mouth marketing as:

“An unpaid form of (oral or written) promotion in which satisfied customers tell other people how much they like a business, product, service, or event.”

It’s unfortunate that this definition uses the term “satisfied customers,” because isn’t client satisfaction the norm at your salon? Clients expect to be satisfied – to have their expectations met – no matter what salon they visit.

Satisfaction is not sufficient to motivate clients to proactively tell their friends, family, and colleagues about your salon, nor will it be enough for them to leave 5-star ratings on your Facebook page, Google+ business page, Yelp, and other review sites. If you want your salon to be the talk of the town, meeting expectations isn’t enough; you must exceed them!

Clients Control Word of Mouth Marketing, But You Can Make it Happen

Since word of mouth marketing is unpaid marketing, it stands to reason that you cannot control whether, when, or how it will occur – which is probably why so many salon owners leave word of mouth marketing entirely up to chance; but, even though you can’t force your clients to refer their co-workers, friends or family members to your salon, there are strategic marketing tactics you can employ to increase the likelihood that your salon’s word of mouth buzz will build.

There Will Be No Buzz without a Buzz-Worthy Experience

As stated previously, every client who walks in the door of a salon expects to receive a services that produce the desired results.

Meeting expectations is not buzz-worthy, it’s average! Your salon has to do more than satisfy its clients.satisfactory experience overall, including personal, professional, and friendly stylists and

Your clients aren’t going to talk about your salon unless – and until – you give them something to talk about. The experience must be better than what they expected it to be in some way; they must perceive that they received better treatment or results than they could have received anywhere else.

Only by surpassing expectations in ways your clients notice and appreciate, will their experiences memorable enough to motivate them to follow through on their own time and risk their own credibility by making personal recommendations and leaving positive ratings and reviews for your salon online.

Facilitate the Process if You Want Buzz to Build Faster

Though it might seem contradictory to assert that you can strategically facilitate word of mouth marketing after pointing out that your clients really control whether, how or when it occurs, the truth is that there are marketing tactics you can employ to increase word of mouth referrals.

For instance, 8 out of 10 US consumers say that online reviews are just as influential to them as recommendations from people they know personally ( Are you actually asking your clients to leave online reviews for your salon?

  • Follow up after every appointment with an email asking whether your client has feedback, questions or concerns, remind them when their next appointment is and provide a link where they can go online and leave a review or rating for your salon. Easy, right?
  • Recognize and thank clients by “tagging” or messaging them on social networks and invite them to tell you what they like most about your salon, services or products in social status updates.
  • Instead of being upset with clients that use cell phones during appointments, install Wi-Fi so that their smartphones and other mobile devices set for automatic check in will register social status updates noting their patronage of your salon!

While you cannot control whether your clients tell colleagues, friends and family about your salon, you can provide a buzz-worthy experience, let them know you value their feedback, and make it really, really easy for them to provide you with more word of mouth referrals so you can grow your business more quickly.


Elizabeth KrausMarketing consultant Elizabeth Kraus is the author of amazon-published marketing books for salons including “By the Numbers: The 2014 Salon and Spa Marketing Calendar” and “12 Months of Marketing for Salon and Spa.”


Taking Money from Strangers: A Guide to Crowdfunding

April 7th, 2014 by
Crowdfunding is a ton of people putting money in your business piggy bank.

Crowdfunding is a ton of people putting money in your business piggy bank.

Taking Money from Strangers: A Guide to Crowdfunding

In my last blog post, I answered your questions regarding microloans. In this blog post, I’m going to answer some questions about another source of small business funding: crowdfunding. Crowdfunding is a relatively new business-funding strategy that is panning out quite nicely for many business owners with great ideas. Remember, my goal in this series of posts is to get your business venture funded so you don’t end up like the 36 percent of other Americans who haven’t started their own business because of funding. So what’s crowdfunding, and will it work for you? Let’s find out!

Q: What is crowdfunding?

A: Crowdfunding is funding your business with a crowd. The idea is to secure donations to start your business from as many people as possible: The more people, the more money coming in to fund your business.

Q: So, crowdfunding is a bunch of loans to start your business?

A: No – crowdfunding is more like a gigantic fundraiser to start your business. People donate money to support your business idea and help get it off the ground.

Q: How much are the donations usually?

A: It depends on the individual crowdfunder and the perks you offer them. Donations can be anywhere from $5 or $10 to $100 or more.

Q: That won’t really help start a business, will it?

A: This is why the idea is to get a “crowd” of people to donate money. If you get thousands of people donating $5 each to your business idea, you’ll see the money add up quickly and deliver better returns that a more traditional form of business funding might present.

Q: Do the people who donate money get a percentage of ownership or have a stake in the business?

A: No. People are not buying shares of your business as they would in an initial public offering on a stock exchange, which requires SEC review and approval. Crowdfunders do not own any portion of your business; they are merely donating to help get your business idea off the ground.

Q: Could you offer an investment in your company to entice more people to donate?

A: At this time, the only way you could offer shares of your small business in return for crowdfunding is if the funder is an SEC-accredited investor, meaning they have more than $1 million in net worth or earn an annual income of $200,000 or more. There are a few crowdfunding platforms out there that are set up to allow you to offer equity, such as Crowdfunder.

This will be changing with President Barack Obama’s Jumpstart Our Business Startups Act (JOBS) of 2012. This new legislation allows company stock to be sold on crowdfunding sites to anyone interested in the investment. At this time, however, the SEC has not officially determined the rules of how this will work and this type of funding is not officially off the ground, so stay tuned!

Q: If I can’t offer an investment in my company, how can I entice people to donate to it?

A: There are many things you can do to ensure your crowdfunding campaign returns positive results:

  • Have a solid, understandable business plan to back up your business idea. People are not going to be drawn to donating to your business if you cannot show that you know your stuff and you have a fantastic game plan for future growth.
  • Be personal. Film a quick video explaining your business idea and your reason for crowdfunding. Talk about your own investment in the company and encourage people to jump on board. Keep the video concise, and make sure you are personable in the footage.
  • Get online and active in social media. You are marketing your business, so you need to be very active within your social media networks to encourage people to crowdfund your business idea. Get out into your community, too!
  • Offer a chance for your crowdfunders to have some other “hands-on” experience with your company aside from partial ownership – perhaps a say in the design of a product or marketing campaign. Get them engaged and involved.
  • Enlist everyone – your family, your friends, your colleagues, your old college roommates – to give and encourage their family, friends, and old college roommates to give. The key here is to get people enthusiastic about your business and spread the word.
  • Use an online crowdfunding website that offers perks in return for donations, such as free Amazon gift cards, profit-sharing, or other incentives. Make sure the incentive is something people will want so they’ll donate to receive the perk!

Q: You mentioned crowdfunding websites. Is crowdfunding done primarily online?

A: Yes. Crowdfunding is raising money for your business over the Internet, and many of your backers will be complete strangers to you.

Q: What do the websites get out of this deal?

A: You will determine your financial goal when setting up your crowdfunding campaign on one of the many websites. Most legitimate crowdfunding websites take a small percentage of your final funding goal once it is received. There might be a small processing fee or fees tied in with PayPal or other transactions.

Q: What are some of the websites readers can use to begin crowdfunding their business idea?

A: These are several crowdfunding sources. It is important to contact each one to determine their crowdfunding policies, applicable fees, and available perks for your funders. You must do your homework before choosing a platform, as each one is different and some may be a better fir for your business than others. Here is a small list of some of the well-established crowdfunding websites.

  • Kickstarter is the largest crowdfunding website. You must obtain approval for your crowdfunding campaign, and you must meet your financial goal to receive the funding.
  • Crowdfunder is a crowdfunding website with registered, SEC-accredited investors interested in funding new business ventures. Crowdfunder does require a monthly membership fee.
  • Indiegogo offers a crowdfunding platform for all business venture types. Indiegogo also allows you to keep the funds raised even if you do not reach your final goal.
  • RocketHub is also open to crowdfunding for any type of business project. It is social-network-motivated, and you may keep your funding whether you reach your final goal or not.
  • Peerbackers focuses on crowdfunding from your peers. Your crowdfunding campaign must be approved, and you can receive your funds even if you do not meet your goal.

Q: Do you have any other suggestions for a small business trying to secure crowdfunding?

A: I strongly suggest that you discuss your crowdfunding ideas with your attorney or financial adviser. Laws are currently changing as the SEC irons out all of the rules for crowdfunding via the Jumpstart Our Business Startups Act legislation. There are also certain business structures that can or cannot use crowdfunding as a finance option. Make sure you understand all of the implications for your business, including tax implications, that crowdfunding entails, and then go get your business venture crowdfunded!

Finding Financing: A Guide to Microloans

April 2nd, 2014 by

Finding Financing: A Guide to Microloans

I’ve talked about this statistic in my last couple of posts (I’ve Got a Great Idea! Now What? and Navigating the World of Startup Financing), but it really does bear repeating: 36 percent of Americans polled in a recent survey said the number one reason they haven’t started their own business is financing. Americans are avoiding becoming entrepreneurs because of money. I often wonder if the reason why is because they do not know all of the small business financing start-up options available to them and are understandably hesitant to ask for help from their family members. One business start-up financing option is a microloan, and I am going to answer your questions about this type of business funding right now!

Q: What is a microloan?

A: A microloan is money lent to small business owners or nonprofit child-care centers.

Q: What is the purpose of a microloan?

A: The purpose of a microloan is to help small businesses and nonprofit child-care centers that otherwise do not qualify for traditional bank funding afford the start-up and/or expansion costs of their venture through the appointment of cash. Generally, the borrower suffers from bad credit or does not possess enough collateral to qualify for a much larger, traditional lending option.

Q: How did microloans get started in the U.S.?

A: The U.S. Small Business Administration started the microloan program.

Q: So the SBA lends the money for microloans?

A: Indirectly, yes. The SBA allocates a certain amount of money to various nonprofit organizations that, in turn, act as intermediaries of the money, determining who is eligible for a microloan and then lending the earmarked funds.

Q: So a microloan is like crowdfunding, correct?

A: No. A microloan is not crowdfunding. While it is true that crowdfunding is financing your company through a group of people, there are distinct differences between the two. Crowdfunding is soliciting donations to finance your business from individuals interested in supporting your business venture. The money received through crowdfunding is secured on the Internet, is not a loan, and generally consists of donations of minimal amounts from numerous strangers.

A microloan is a loan – you will have to qualify for it and pay it back with interest. A microloan is financed by the SBA through an intermediary nonprofit lender. The lender will loan you the money, and you will pay it back to the lender on an agreed-upon payment schedule.

Q: How much money is lent to a qualified business through a microloan?

A: Any business loan amount under $35,000 is considered a microloan, and the SBA reports that the average microloan is $13,000. This being said, some lenders have been known to lend as much as $50,000 through a microloan appointment, and the loans can also be as small as just a couple of hundred dollars depending on the small business owner’s need.

Q: What is the interest rate of a microloan?

A: Interest rates vary on microloans from between 8 percent and 13 percent.

Q: How long does a small business have to pay off the microloan?

A: A small business owner has a maximum of six years to pay off their microloan.

Q: Who qualifies for a microloan?

A: The SBA leaves the qualifying criteria up to the individual intermediary, so I can’t give you a definite set of qualifications. In general, however, the intermediaries look to lend money to small businesses that otherwise cannot secure bank funding, as well as female, disabled, low-income, and minority business owners. This does not mean that they will lend to a business that has filed for bankruptcy or is facing another financial crisis. Microloans are not funding intended to bail a business out of financial trouble; the funds are to be used for equipment/machinery, furniture/fixtures, inventory/supplies, and working capital. If you are applying for a microloan, you will need to be able to provide some type of collateral for the loan and personally guarantee the return of the funds plus interest.

Q: Is there any way I can increase my odds of getting a microloan?

A: You can increase your chances of getting a microloan by being adequately prepared to “sell” and support your business idea. Microlenders are looking for a business idea that will become profitable over time, so you must have a good and useable idea. They are also looking for the know-how to back up your business idea. In other words, make certain you have a well-thought-out, thorough, and realistic business plan and the financial statements to back it up. This includes balance sheets and projected budgets to demonstrate your anticipated profits over the next few years.

Q: If I secure a microloan, can I use the funds any way I want?

A: No. During your application process, you and the microlender generally discuss how your microloan will be used, and the money can only be used for the reasons I discussed above. In fact, in some cases, your plans for the funds are what will qualify you for the loan. For example, if you looking for start-up capital, you should apply for a microloan from a lender who specifically funds start-ups. If you are looking to expand, solicit a microlender who specializes in expansion funding.

Q: Where can I get a microloan?

A: Contact your local SBA office to obtain a list of microloan funders in your area. You can also find microlenders on the Web.