Most stylists and salon owners dream of a referral-based business, but in today’s world, that is actually the riskiest, most unpredictable way to build a business.
I remember when I joined the industry in 2007, it was all about referrals, word of mouth and becoming a part of the local community. You would meet a great client, ask for referrals, and offer discounts. That was all we had, and it worked.
But the game has dramatically changed in the past decade. Most business analysts theorize that those who rely on referrals won’t be around by 2025.
Here’s the reality: life goes through highs and lows. You get a divorce, get in an accident, get sick. And in a referral-based business, you're only as good as your last encounter with a customer. So if you have to cancel because life threw you a curve ball, word of mouth will actually destroy your business and you will dry up like the Sahara Desert.
In short, your killer personality, great client experience, and perfect location aren’t going to cut it. The referral-based business has one leg of marketing, and if that one leg goes, you don’t have any other legs to stand on. You can’t build a long-term business on that.
If we know we cannot rely on referrals and word of mouth to grow our business anymore, let's start to create an actual marketing strategy with a real plan to build a business with multiple legs supporting it. I’ll walk you through the steps to create a solid marketing strategy.
Number one: Create 6 – 7 marketing sources
Make a list of six to seven different marketing sources that you can set up so that if one falls out, several others are supporting you and your business continues to thrive. Here are a few ideas to get you started:
Use active marketing techniques. Create ways to get out in front of your clientele instead of hoping they’ll come to you, like building an active referral program and asking for reviews. For more on this topic, listen to podcast 39!
Build your marketing funnel. You should understand the path every single guest takes before they land in your chair (a.k.a. your marketing funnel). I talk more about how that funnel can help your business build and grow here.
Create a solid social media strategy. Let me tell you what's not a strategy: “I will use social media.” That's a great intention, not a strategy. You need to have an actual plan for what your social media is going to look like.
Build local networking strategy into your marketing plan. Consider hosting events at your salon to bring buzz and energy to your space and start making connections with other local small businesses. In a studio suite or a booth renter? Then get to community events and put yourself in front of other small businesses so you can make connections and grow.
Number two: A successful business is one that is driven versus one that reacts.
Here’s what most people do when they realize it's a slow month. They panic, get desperate and start discounting to fill their chair.
The only reason you get to that spot is because you did not plan. Without a strategy, you're running a reactionary business where, if the bottom falls out for a second, you're in sheer panic mode, trying to react.
Smart businesses aren't reactionary. They don't need to be because they're running a marketing strategy every single day. They know what to do in the busy months, slow months, and they run promotions when it makes sense instead of being reactionary.
Plan ahead to long-term so you can fill any gaps ahead of time instead of being reactionary and putting a Band-Aid on the situation, hoping you can make it through. That's a losing strategy. Every single time.
Number three: Be special by having a specialty
Today's client wants to see somebody who is the best, not the person who dabbles in this, and that, and 10 other things. If word of mouth is an essential pillar in your marketing strategy, be worth talking about.
I’ve got to say it: Good hair is so easy to find. A great stylist is a dime a dozen. You have to be known for something special, as somebody who offers an exceptional guest experience. It's not the technique, it's not the product, it's not the retail. It is the experience that stylist provides and the specialty they've chosen. Period.
Number four: Plan it out
The more organized you are, the more your guests are going to feel it. Once you've chosen your specialty and decided on your different pillars of marketing, start planning. Know when your busy time will be, when you can take a vacation, what promotions you want to run in slower months so you can plan your social media strategy.
Think of it this way: If you want to run a promotion on color, plan to start hyping it up on Instagram 30 days beforehand. By the time the promotion hits, your clients will be lining up to book a color appointment because they saw your social media posts. Instead of just shoving marketing down your clients’ throats, you’re educating them, making you look like the authority in your industry.
If you are still a stylist or a salon owner who is hoping that your referral-based business is going to pay off, let me tell you it’s the riskiest thing you could ever do. You’re leaving your business in the court of public opinion, instead of taking control of your success and creating different marketing pillars to build on.
I encourage you to start working on your marketing strategy and get mega organized to be a business that relies on many marketing pillars instead of just word of mouth. Having a solid marketing strategy takes the risk out of running a business. When your business is organized, expenses are predictable, and you can make strategic decisions, like whether you can afford an assistant, go booth rental, or open your own salon.