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Select and recruitdoc - SALON SUPERVISION

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Recruit & Select Personnel

     Staff Planning and Recruitment
     Hiring an employee is truly making an investment in your business. When
     you hire someone to work for you, you will invest time, money, training, and
     trust. If you do it right, your business can move forward much faster than
     ever before; if you do it wrong, not only can you lose your investment, but
     you can be subject to lawsuit that can cause you to lose much more.
     When most people think of hiring an employee, they tend to think only of
     classified ads and interviews. But there‘s much more to successful hiring
     than that. Its an important process with serious implications for the future of
     your business, and you should put in the time to examine your needs to hire
     and recruit in systematic, legal way.

     START BY:

     Defining The Job
     By defining the requirements of the job and creating a profile of the type of
     person who will do the job successfully, you are more likely to hire the right
     person for the job. Below are some guidelines to help you gain a clearer
     understanding of the tasks and responsibilities of the job and your ideal

     What do I want the employee to do?
     The first step is to think about the job and the type of person needed to fill it.
     Ask yourself the following questions:
    Why do I need a new employee?
    What duties do I want this employee to perform?
    How does the employee perform these duties?
    How will I know when the job is complete?
    Where is the job located?

     Your answers will help you to define broadly the tasks and responsibilities of
     the job and identify the skills and experience required to successfully perform
     these duties.
     This then forms the basis of a job description/

     Why do I need a job description?
     A job description covers the objectives, tasks, activities, responsibilities and
     accountabilities of a particular position.
     While state awards may provide pay rates and employment conditions, a job
     description will make your interviewing more effective and help you to hire
     the right applicant for the position.
     A well-prepared job description will give you guidelines for selecting
     applicants and a clearer understanding of your expectations.
     It also gives your new employee a clear understanding of what is expected of
     him or her.

     What should I cover in a job description?
     A job description should cover all relevant information about the job,
    A job title which clearly describes what the employee is to do in the job
    An overview of the position which outlines the key objectives and main
    Reporting relationships, such as the employee‘s supervisor and any position
     which might report to the employee
    A prioritised list of tasks and responsibilities, including details of a typical
     day‘s work
    Possible career progression, criteria/timing of performance overview
    Work location and any travel required

Total remuneration package, including base salary, superannuation, bonuses,

     Who is my ideal applicant?
     The job description defines the requirements of the job. The next step is to
     create a profile of the ideal applicant by considering the personal qualities
     needed to perform the job successfully. This includes:
      Qualifications, for example, HSC, trade certificate, TAFE certificate or
        diploma, university degree
      Skills, such as typing speeds; communication and organisational skills,
        such as ability to work in a team, solve problems, use technology, handle
      Required experience
      Personal attributes including ability to work under stress, maintain
        confidentiality, adaptability and flexibility.

     You will then need to decide what criteria are essential and what are

     The essential criterion is then used in your job advertisement.

     Are there any legal requirements I should consider?
     Consider whether you are offering the new employee a full-time, part-time or
     casual position.
     The legal requirements for taxation, superannuation and insurance vary in
     relation to the different basis of engagement.

     Some jobs are covered by awards the agreements, others only by minimum
     conditions of employment.


     Full time employee          – an employee who receives full weekly wages
     and conditions. The number of hours worked by a full-time employee is set
     by an award, enterprise agreement or a contract of employment.

     Part-time employee – an employee who works a regular number of
     hours each week but less hours than full-time employee works. A part-time
     employee receives a flat hourly equivalent of the normal full-time rate
     (sometimes little extra). A part-time employee generally receives all, or most
     of the benefits of a full-time employee but on a proportional or ―pro-rata‖

     Casual employee            – an employee who works on an hourly or daily
     basis and would be paid an extra loading on top of the normal rate to
     compensate for the lack of usual benefits such as sick leave and paid public
     Casual employee – normally receives a loading of between 15% and 33.3%
     above the normal full-time hourly rate. Casual employee also usually receive
     an extra amount equal to a further 1/12 of the casual hourly rate to cover pro
     rata annual holiday pay.
     Some awards specify the minimum number of hours for which a part-time or
     casual employee must be paid per day. The employment of casual may be
     restricted to engagements, for example, of less than five days duration.
     Other awards allow casual employees to be engaged to work full-time hours
     Since the definitions of part-time and casual employment vary between one
     award and another, it is essential to check the appropriate award for details
     at the time of engagement.

     Writing a Job Advertisement
      A job advertisement needs to provide enough information to attract the right
     type of applicant and be specific enough to discourage unsuitable applicants
     from applying for the job. This section provides some useful tips to maximise
     the effectiveness of your job advertisement.

     Do I need to advertise?
     You can recruit new employees in many other ways than advertising in a
     local or daily newspaper. Other ways are: through a recruitment or personnel
     agency; through the Commonwealth government Job Network (previously
     the CES); trade journals; advertisement signposted in the local area or your
     premises and word of mouth.
     There is nothing wrong with any of these methods, as long as you still
     interview the prospective employee and give him or her a clear
     understanding of what will be expected of them.

     How can I attract the right applicants?
     A successful job advertisement will:
      Stimulate the applicant‘s interest and present a positive image of your
      Create a desire to apply based on the information provide about the job
      Generate enthusiasm about the job
      Motivate applicants to apply.

     Ultimately, the success of an advertisement is measure by the suitability of
     the applicants rather than number of applications.

     What information should I include in the job
     Screen your applicants and encourage suitable applicants to respond by
     providing the following information:
      Job title
      Nature of work offered
      Required experience
      Skills and qualifications
      Essential personal attributes
      Brief description of your business
      Salary and any other benefits

     How can I encourage a response?
     Maximise the response to your advertisement by making it possible for your
     applicant to contact you easily. At the end of your advertisement give the
     applicant appropriate contact details.
     For example, ―like to know more? Then contact Mary Smith on telephone
     5555 5555 or write to XYZ Pty Limited at 77 Anywhere Street, Hometown
     with brief personal resume.‖
     Don‘t forget to include your business name and full name of the contact
     person or the complete street address.
     Encouraging telephone enquiries about the position is a good way to screen
     Effective telephone screening can enable you to obtain enough information to
     determine whether the caller satisfies the essential criteria for the position.
     If you specify a contact person, make sure that the person clearly
     understands the position and is available to respond to any enquiries. Also
     inform your receptionist and other relevant staff that the advertisement is
     running so that they can handle the response.

     Writing An Effective Job Advertisement
     Here are a few simple tips to make your job advertisement more effective:
      Speak directly to your potential applicants by using word ―you‖ as this will
        personalise the advertisement and make it more relevant to them
      Quote a salary or a salary range to help filter out unwanted responses
      Provide enough information to help potential applicants decide whether
        the job is suitable for them.
      Use your job description to include required skills, qualifications and
        experience and any desired attributes.
      Don‘t use too many words
      Don‘t make the job into something that it isn‘t as this will attract applicants
        who are not suited to the position.

     What can’t I say?
     Equal Employment Opportunity ( EEO ) law prohibits advertisements that
     indicate an intention to discriminate on the grounds of:
      Sex
      Marital status
      Pregnancy
      Race
      Ethnic or ethno-religious background
      Disability
      Age
      Homosexuality
      Transgender status
     It is also against the law to discriminate against a person on the ground of
     trade union activity. This information is very important.

     Should I respond to all applications?
     How you treat all the applicants can influence their impressions of your
     business. Though it may seem time consuming, acknowledging, all
     applications with a brief letter or card will help create a positive image of your

     A bright, energetic person is required to assist in our busy accounting office.
     You will enjoy a lot of variety, direct client contact and have the opportunity to
     progress within our company. You will have a minimum typing speed of
     50wpm, a sound knowledge of a range of software packages including
     spreadsheets and enjoy working as part of a team. Salary to $30,000. Please
     call Alison Lu on (02) 5555 5555 or post your resume to the Human
     Resource Manager, Accounting Partners, Level 1, 28 Market Street,

     Motor Mechanic
     Smith Service Centre requires a qualified motor mechanic. You should be
     self-motivated, able to work as part of a team and possess good
     communication skills.
     Transmission experience an advantage. An attractive salary package is
     available, depending on skills and experience.
     Telephone Allan Smith on (02) 5555 5555 after 10.00am weekdays.

     Shop Assistant
     The Special Cake Shop, a leading retailer of quality cakes and pastries,
     requires a part-time shop assistant for three days per week, Mon, Tues, Wed
     8am-5pm. Previous retail experience is essential. This is a busy and varied
     position for a responsible person with excellent people skills who can work
     under minimal supervision.
     Please telephone Sue Andrews on (02) 6581 0011 or post your resume to
     PO Box 80, Hometown.

     Due to recent expansion, Widgets Pty Limited is seeking a high-motivated
     sales person. Extensive experience in managing existing clients and
     developing new business is required. You will possess a strong work ethic
     and excellent communication skills. As well, you will have a proven track
     record in negotiating and closing sales. Remuneration is designed to attract
     top applicants and combines salary, commission and car allowance.
     Telephone Vazu Natah on (02) 5555 5555 or fax your resume to (02) 5555

     Preparing For An Interview
     Preparation is the key to a successful interview.
     By taking the time to prepare, you can evaluate applicants more objectively
     and more accurately assess how they will perform the job. This section
     answers some common questions about preparing for an interview.

     Whom do I interview?
  Once applications have been received, you will usually need to create a
  short-list of applicants. Through your job description and ideal applicant
  profile you have already defined the essential desirable criteria necessary to
  perform the job successfully.
  Compare each application to these criteria. Divide your applications into
  three piles labelled:
        ―yes‖: those which satisfy all essential and desirable criteria
        ―maybe‖: which meet the essential but not the desirable criteria
        ―no‖: those that do not meet essential criteria.

     In considering applications, you cannot discriminate against applicants on the
     basis of their sex, marital status, pregnancy, race, age, ethnic or ethno-
     religious background, disability, homosexuality or transgender.
     Notify unsuccessful applicants, preferably with some explanation as to their
     unsuitability. This can be done either at the time the person is eliminated or
     once interview have been completed.

     How many applicants should I interview?
     There is no ―right‖ number of applicants to interview. Your decision will
     depend on the type of job, number and quality of applicants and how much
     time you have. One option is to call in a larger number of applicants for the
     first interview and then create a short-list for second interviews.

     How many people should interview the applicants?
     It largely depends on the size of your business but it is a good idea for at
     least one other person to interview the applicants with you. It could be your
     business partner, your spouse, the supervisor of the position you are
     interviewing for or any individual you feel will help you make an informed

     What should a job interview achieve?
     A job interview is an opportunity for you to evaluate the applicant‘s ability to
     do the job and satisfy your requirements. At the end of the interview you
     should be able to:

        evaluate the applicant‘s personality, appearance and attitude
        confirm and expand upon the details provide in the application form or
        obtain a clear indication of the applicant‘s normal job behaviour and relate
         it to the job description
        assess the likely future job performance of the applicant, compared to
         other applicants.

     At the same time, it is a chance for the applicants to see whether your
     business and the job opportunity satisfy their needs. The applicants will want
     as much information about the position and your business as possible so that
     they can make an informed decision whether the job is right for them.

     What can I do to prepare for an interview?
     There are a number of preparations that you can undertake to ensure that
     your interviews run as smoothly as possible:
    Contact the applicants, advise them where to come, whom to ask for and
     whom to contact if they are unable to attend
    Let your receptionist know the names of the applicants and interview times
    Provide a reception area where applicants can wait in comfort
    Organise a quiet and comfortable room for interviewing
    Schedule enough time for each interview so that you are not rushed
    Ensure that you are not interrupted during the interviews
    Prepare your questions beforehand so that you can ask similar questions to
     all applicants as this make comparison easier and lessens the possibility of
     discriminatory treatment.
    Review the applicant‘s resume or application form before each interview.
     Addressing these details will reassure the applicant that you are taking the
     interview process seriously and that the applicant matters as an individual. It
     will also enhance the image of your business.

     Predicting Future Job Performance
     Behavioural questions probe for specific examples of an applicant‘s
     behaviour in past situations which are similar to situations that will be found
     in the new job. The applicant‘s answers can help you to assess how an
     applicant will perform on the job.
     Using your job description, create question which relate to the job‘s key

     Consider how you want the employee to perform these duties so that you
     can determine the behaviours that you want the employee to display on the

     Devise questions which focus on specific work-related situations to find out
     whether the applicant has displayed these desired behaviours.

     The applicant‘s answers need to include an example of a specific work-
     related situation, the applicant‘s action in that situation and the outcome of
     the action.
     Where the applicant has not been confronted by situations similar to those
     found in the new job, the questions can be formulated as situational
     questions, where the applicant is asked how they think that they would
     respond in certain situations.

     Examples of behavioural questions
     A shop assistant: tell me about a time when you had to deal with an angry
     What did you do? What was the result?
     A receptionist: give me an example of a time when you had to deal with a
     number of tasks at once. How did you do it? What was the outcome?
     A team player: tell me about a time when you had to deal with conflict in a
     team environment. How did you deal with it? What was the result?
     What other questions should I ask?
     There are a number of other questions you might ask to gain a better
     understanding of the applicant‘s personality , skills and experiences
    How would you describe your personality?
    What do you consider to be your greatest achievement?
    What are your strengths/weaknesses?
    How have you tried to develop your skills?
    Give me an example of your ability to manage or supervise others?
    What makes this job appealing to you?
    What are you looking for in a business?
    What is your long-term career objective?
    What did you like/dislike about your last job?
  10 -

         Interview Preparation Form
         To prepare for a hiring interview, review the job profile and a make a list of
         the key responsibilities and tasks of the job, associated training and/or
         experience, and personal attributes required to do the job well. For each of
         the areas you need to explore with the candidate, prepare several
         questions in advance. After the interview, rte the candidate in each of the
         key areas in the Decision Making Matrix
         Job title:

  Key Responsibilities and Tasks Associated Training and/or Experience
  1.                                    1.
  2.                                    2.
  3.                                    3.
  4.                                    4.
     Personal Attributes to Look for:
  Key Areas to Explore        Questions to Ask     Notes
Eduction                      1.
     Previous                 1.
     Experience               2.
     Job                      1.
     Accomplishments          2.
     Skills          and      1.
     knowledge                2.
     Personal                 1.
     Attributes               2.
     Previous Appraisal       1.
     or Rating                2.
11 -

       Conducting The Interview
       If the interview is conducted appropriately, you will be able to assess which
       applicant has the knowledge and skills required to do the job. Here are some
       handy hints to assist you. Who can work under minimal supervision.

       How do I start the interview?
       Welcome each applicant warmly and introduce yourself and the other
       interviewer. Try to establish rapport with the applicant and create a friendly
       atmosphere. This may be done by referring to the person‘s interests or
       background. Wait until the applicant appears relaxed before moving on to the
       main part of the interview.
       Begin by outlining the approach that you will take to the interview. Ask the
       applicant‘s permission to take notes. This will help you to review your opinion
       more objectively and not rely on your memory to assess the applicant‘s
       Help the applicant to relax by starting with questions that can be easily
       answered, for example, ―Perhaps you could give me a brief outline of your
       work history‖.

       Interview tips
      Ask one question at a time
      Use simple and appropriate words to make the questions easy to understand
      Use open-ended questions which allow applicants to express themselves
      Avoid leading questions which imply the correct answer
      Let the applicant do most of the talking and listen carefully to the applicant‘s
      Respond to the applicant‘s answer with interest to show that you are paying
      If answers are vague or avoid the question, probe the more specific and
       accurate information
      Probe for details where information seems inconsistent or unfavourable as
       this will help applicants to clarify points, often to their advantage.
      Keep the conversation under control and don‘t let answers become long-
      Ask to see any qualifications, certificates, special licences or other essentials
       required for the position.
12 -

       What do I need to know?
       By the end of the interview you should be able to assess:
      Whether the applicant has the knowledge required to do the job based on
       answers to technical questions or examples of previous work
      Whether the applicant is able to do the job by asking questions related to the
       applicant‘s results and achievements in previous positions
      Reasons for any gaps in work history
      The applicant‘s strengths and weaknesses, including how the applicant has
       dealt with any mentioned weakness.

       Look for negative factors such as undue criticism of former employers or
       frequent changes in jobs. Avoid unfavourable reactions to answers and
       refrain from making criticisms and jumping to conclusions. Fear of rejection
       may lead to the applicant providing answers, which will please the
       interviewer rather than honest information.

       What information do I give to the applicant?
       Give a detailed description of the job, based on your job description. Outline
       the current tasks and explain how the role will develop in the future. Cover
       the duties, reporting relationships and conditions of employment.
       Encourage questions and take the time to ensure that the applicant fully
       understands the job requirements.
       As good applicants are in short supply, you will need to promote the benefits
       of the job to attract the right person. This includes your business, location,
       fringe benefits, training and opportunities for career development. The best
       applicants want a job that satisfies his or her needs, not just financial

       How do I close the interview?

       Ask whether there are any further questions. Give the applicant the
       opportunity to express interest in the position. explain whether you intend to
       hold a further round of interviews. Advise when the applicant can expect to
       be notified about the outcome of the interview.
       Their references are to be checked, ask the applicant whether they have any
       objections and ensure that the applicant has nominated referees. Close the
       interview in a decisive and friendly manner and see the applicant out.

       We consider applicants without regard to race, colour, creed, ancestry,
       origin, sex, sexual orientation, marital status, family status, record of
       offences, handicap, or other protected status.
13 -

       LAST NAME            FIRST NAME            OTHER NAME


       CITY                 STATE                 POSTAL CODE

       Area Code ( )                  Area Code ( )
       Mobile:                        ARE YOU EMPLOYED NOW?



       YEAR         LAST


       COURSE        OF

       LIST              ANY
       Education levels achieved and degrees obtained are subject to
       verification if an offer of employment is extended.
14 -

       PRESENT     OR          LAST      ADDRESS


       YOUR JOB TITLE                         Employed from (M/Yr)
                                              To (M/Yr)

       NAME    AND    TITLE          OF       REASON FOR LEAVING

       The foregoing statement is correct to the best of my knowledge. I understand
       that any misrepresentation may disqualify me from employment or be cause
       for my dismissal. If hired, I agree to abide all my rules and regulations of
       Company, including serving an initial probationary period.

       Applicant                                                         signature
15 -

       After The Interview
       Immediately after each interview, review your notes and compare them to
       your assessment criteria. Consider dress, overall presentation, personality,
       attitude and other relevant factors. Rate the applicant‘s performance on a
       scale of one to ten.
       Review these grades once you have completed the initial round of interviews
       as this will make your selection more objective.

       RATING SCALE (1 = very good         3 = good     5 = very poor)

         Job History Gaps?
         Education Appropriate?
         Evidence of Skills Knowledge Required

       APPLICANT INTEREST                                                   ( )
         Is Work Schedule Agreeable?
         When Can Applicant Start?

         Job experience?                                             ( )

       APPLICANT CAN ADAPT TO WORK ENVIRONMENT                       ( )
       Agreement To Work Rules, Practices, etc.?
       Good Work Habits In Previous Job?

       SPECIALS AREAS TO BE CONSIDERED                                      ( )
16 -


       Making A Job Offer
       When you make the job offer, it will be the first contact your prospective
       employee will have with your business. It is essential that this contact gives
       the employee a favourable impression. It is also your first opportunity to
       ensure that your new employee understands what will be expected of him or

       Do I need to do a reference check?
       A reference check will help you to verify the facts given at the interview and
       gather more information about the applicant‘s performance and behaviour at
       While applicants will usually be able to supply favourable written references,
       it is preferable to talk to referees directly. Request a number of referees to
       obtain a range of perspectives and ask permission to contact them.
       Some applicants may be unwilling to nominate current supervisors as
       referees for valid reasons. If this is the case, discuss the matter with the
       applicant and seek alternative referees. These could include previous
       supervisors, suppliers, clients or customers. Prepare a list of question to ask
       each referee so that you can compare responses.
       Reassure referees of confidentiality and keep accurate and objective records
       of the telephone conversations.

       Questions to ask during a reference check
       Ask for information about:
      Experience gained including dates of employment, promotions and training
       actual job title, responsibilities and duties.
      Skills and abilities
      Relationship with supervisors, peers, and subordinates
      Performance, attitude and motivation
      Attendance records
      Strengths and weaknesses
      Reason for leaving and whether the referee would rehire
      Anything else you should know about the applicant in making an employment

       Often, the information you collect will either consolidate your decision or
       eliminate the applicant from contention.
       However, some employers refuse to give reference checks and will only
       confirm the applicant‘s dates of employment and the position held.
17 -

       How do I make the hiring decision?
       After carefully assessing the information you have gathered against each of
       the selection criteria, you are ready to make your decision. To decide as
       objectively as possible, keep in mind your job description and ideal applicant
       profile. Your aim is to match the applicant to the job.
       Review all information, including the application or resume, notes made
       during the interview, reference checks and any other documentation. If
       appropriate, involve the new employee‘s supervisor in making the final
       The time taken to make this decision will vary from job to job. However,
       allowing the decision to ―drag on‖ generates a poor impression of your
       business and may give preferred applicants time to accept other job offers.

       Do I need to make an offer in writing?

       You can make an offer of employment over the telephone, but always
       confirm your offer in writing. This forms the basis of the new employee‘s
       contract of employment. The successful applicant should accept your offer by
       signing a copy of the letter of appointment and returning it to you before
       commencing employment.

       What should a letter of appointment state?
 Details of the position
 Award coverage, if applicable and a summary of the award conditions
 Wages or salary and any other benefits
 Commencement date and, if the job is for a fixed term, the finishing date
 Any special terms or conditions of employment, such as dress requirements
 The length of any probationary period to ensure that the probation is agreed
  to and signed by the employee
 Who to contact when reporting to work
  The letter should be friendly, welcoming and easy to understand.

       Should I include a probational period?
       A probationary period can help to eliminate potential dismissal problems if
       the employee is not suited to the job. A probationary period allows you to
       assess the employee‘s performance and personality on the job.
       To maximise the effectiveness of the probationary period, review the
       employee‘s performance with the employee both during and at the end of the
       probationary period.
18 -

       Can I include a trial period?
       You can have a ―trial period‖ provided that the person is paid for any work
       they do. It is against the law to have a trial period without paying the person
       for any work they do.
       The trial period should not last longer than one or two periods and you
       should explain the prospective employee exactly what behaviour and skills
       you will be looking for. Also, tell them how long the trial period will last and
       when you will give them a decision.

       Dear [Applicant]
       Thank you for submitting your resume to XYZ Corporation. A representative
       will review it immediately and notify you of an interest to further this process.
       Thank you for your interest in XYZ Corporation.
       XYZ Corporation Staffing

       Dear [Applicant]
       Thank you for your interest in the job we have posted. We have received
       your resume and have forwarded it to the appropriate hiring manager. He or
       she will be in contact with you if your qualifications meet the position needs.
       In the meantime, you can look up other opportunities in your field at
       Kind Regards.                                              XYZ Corp. Staffing.

       What about unsuccessful applicants?
       Don‘t forget to write to unsuccessful applicants thanking them for their
       application and remember to return any original documents they have
       provided. This is a basic courtesy plus good public relations.
       You can use a standard letter to notify all unsuccessful applicants. An
       example is shown below:

       Dear (first name)
       Thank you for your recent application for the position of (job)
       We received a large number of applications for the position and the overall
       standard was very high. After careful consideration, we regret to advise you
       that your application has not been successful on this occasion.
       However, we are happy to keep your application on file, should a suitable
       position arise in the near future.
       Thank you for your interest in the position and we wish you every success in
       the future.
       Yours sincerely (sign the letter personally)
19 -




               Full name and address……………………………………………….

               Telephone number……………………………………………………

               Date of Birth………………………………………………………

               Who to notify in emergencies and telephone number……………

       (if used)…………………………………………………………………………….

               OBTAIN COMPLETED AND SIGNED Tax Declaration FORM

         (if appropriate)

            ISSUE AND OBTAIN SIGNED RECEIPT (if appropriate)
              Safety policy (Obtain signature for receipt thereof)…………………

              Method of paying wages (when and where)………………………….

               Available employee benefits and claim procedures………………….

              Vacation/holiday policies…………………………………………….

              Safety policy and procedures…………………………………………

              Organisation behaviour standards……………………………………

              Method of resolving conflicts…………………………………………

              Other important organisation policies/procedures…………………….
20 -

       Managing poor performance?
       This section covers two essential aspects of managing poor performance:
       identifying the problem and assisting an employee who is not doing well.
       There is no easy answer to rectifying poor performance but if you can identify
       the problem you are then much better placed to solve it.

       Why do employees sometimes perform poorly?
       There can be many reasons why an employee may be performing badly,
       both personal or work-related. It may be surprising to realise that these
       reasons usually concern factors related to the design of an employee‘s job
       and the tasks they are required to perform. As an employer, this is good
       news because you can usually provide the solution quickly and simply.
       Some commonly occurring causes of poor performance can be one, or a mix,
       of the following:

 your employee doesn‘t know what to do – meaning there are unclear or
       misunderstood expectations about goals and standards (or no standards
       have been set)
      the job is poorly designed so there is a mismatch between your employee‘s
       capabilities and the job he or she is required to do
      your employee doesn‘t know how well or badly they are doing because there
       is no counselling or feedback on their performance
      your employee does not have the knowledge or the skills to do the job
       expected of them eg. A new recruit, change of duties, a new task etc
      lack of personal motivation, low morale in the workplace and/or poor work
      your employee may have personal problems such as stress, family problems,
       health problems or substance abuse problems such as drugs, or alcohol.
21 -

       Identifying the problem
       The following performance list should assist in identifying what problems are
       affecting your employee and what to do about them.
      They do not know why they should do it
      It is important for employees to know WHY they are doing a task and what
       they are being paid to do. If they do not clearly understand the answers to
       both questions, you might face a poor performance issue.
      Before you put people to work, let them know why they should do the things
       you pay them to do.
      They do not know how to do it.
      Don‘t assume what an employee knows without checking first. If you want
       someone to do something ask them to describe what it is they are doing or
       give them a chance to demonstrate it
       They do not know what they are supposed to do
       Some employees may have an unclear or poor understanding of the specific
       tasks they should be doing.
       For example, they know they are supposed to do something but don‘t know
       when to begin, or what the finished product looks like.
       Ensure you are specific about your standards and expectations.

       They think your way will not work
       If an employee really thinks your way will not work, you must get them to
       express that opinion so that you can deal with it before the work begins.
       You need to sell your idea – simply telling them may not be effective.

       They think their way is better
       You need to identify this issue when assigning a task, ask your employees
       for their ideas on how it will be done and seek their reasons for tackling the
       tasks differently.

       They think something else is more important
       Some employees simply do not understand the comparable priority of the
       many tasks assigned to them or are unclear about your priorities.
       The problem is not that they are not working, they are simply working on
       what they think is important.
       Label the work according to its priority when it is assigned, but make sure
       that every task is not a first priority task.

       There is no positive consequence to them for doing it
       You need to deliver rewards for the performance you expect. Verbal
       feedback about work well done is the least expensive method, and highly
22 -

       They think they are doing it
       If employees do not get timely and appropriate feedback, they will continue to
       do the work the way they have always done. Employees need ongoing
       information and an answer to the question ―How am I going?‖

       They are rewarded for not doing it
       If employees only receive attention when they are performing poorly, you
       may just be reinforcing the poor performance, not eliminating it. Your
       attention becomes the rewarding consequence.

       They are punished for doing what they are supposed
       to do
       For example, if an employee makes suggestions at meetings and is given
       extra projects to carry out the suggestions, they will probably stop making
       To reduce this risk, remove the punishment or provide a reward to balance
       the punishment.

       They anticipate a negative consequence for doing it
       It is important that people understand the ground rules for operating – that it
       is OK to have opinions, questioning and feedback are encouraged.

       There is no negative consequence to them for poor
       Failure to take appropriate action to correct performance problems sends a
       message that poor performance is tolerated.

       Obstacles beyond control
       There may be obstacles due to lack of resources or conflicting directions.
       Listen, get involved and investigate.

       Their personal limits prevent them from performing
       Many people fail to perform because they were not taught how to do it.

       Personal problems
       Listening and linking employees into other agencies that can help them deal
       with the problems is a key role you can perform.

       No one could do it – it’s unrealistic
       This is a training issue. You should provide training and practice
       opportunities to help them perform.
23 -

       How do I solve the problem?
       You can‘t solve the problem by yourself. It is something you and your
       employee must solve together. The first step is to talk to your employee and
       get his or her agreement that a problem exists. This may involve some
       discussion and persuasion on your part. Then once you both have agreed on
       what the problem is, you can both discuss strategies to solve the problem. If
       you don‘t adopt this method of solving the problem together, your employee
       will probably feel ―blamed‖ or ―chastised‖. If your employee feels he or she is
       being blamed, then it likely poor performance problems will continue.

       How do I initiate discussions about my employee’s
       poor performance?
       You should have some private discussions with your employee about the
       problem. It should be in a comfortable, non-threatening environment and take
       place at a time when neither of you will be interrupted.
24 -

       Salon Supervision and Motivation
       Supervising people is both a skill and an art. It is a skill because the basic
       theories about motivation, communication and conflict resolution,
       leadership, performance counselling and so can be learned. The art is
       how you adopt and adapt this knowledge and put it into practice in your
       own unique way.

       Management Responsibilities (pertaining to human

       Every business, regardless of its size, must look after its most precious
       resource: people. Human resources are there to ensure that the
       organisations human resources are managed and cared for in the best
       possible way. Here are just a few human resource responsibilities:


      Forecasting future staffing needs
      Recruiting staff
      Induct new staff
      Handling redundancies, retirements and terminations
      Implement and monitor work methods and procedures
      Discipline procedures
      Conditions of employment
      Equal Opportunity development
       Develop and maintain staff rosters
       Maintain records of work done as required by salon management
       maintain personnel records of staff (including daily attendance records)
      Appraise staff performance against agreed criteria
      Resolve disputes between team members
      Provide advice to management as necessary
      Advise staff on matters relating to clients and services
      Inform employees about salon activities
      monitor, review and improve work methods where necessary
       Human resource management should aim to develop policies regarding
       all of these matters. Policies provide guidelines for dealing with
       employees at all levels. They outline how matters affecting employees of
       the business should be handled.

       Management Responsibilities
25 -

       (pertaining to salon procedures and facilities)

       Salon supervision also relates to salon procedures and facilities. These
       areas are covered in other modules that you have completed.
      Manage quality control (8338Q)
      Stock management (8338J)
      Promote and implement salon health and safety policy including regular
       inspection of salon fittings and equipment for faults and required repairs
      Supervise and participate in promotional activities (8338H)


       An employee who "starts off on the right foot" and who is kept on track
       through systematic job training is likely to become a valued contributor to
       your business‘s success. Since you have gone to the trouble of recruiting
       and selecting an employee, it is your responsibility as a supervisor to
       ensure that each new recruit becomes the able staff member you need as
       quickly and efficiently as possible. This is why induction and training are

       What is induction?

       Good induction is more than just introducing a new employee to
       his or her job and work mates. It is the process by which you
       help a new employee into a job, a work team and an
       organisation as smoothly as possible. It involves making a
       person feel welcome and important. It is a way helping people
       find their feet. It means anticipating all the questions which a
       new person might want to know the answers to when they
       would know who to ask or if they don't feel confident enough to

       Why is induction important?

       People are an organisation's most valuable resource and they deserve to
       be carefully introduced to their new jobs. At some time during the first
       days of employment, new recruits need to be told something about
       organisation's history, what its products or services are, its employment
       benefits and activities, the way the organisation is structured and the how
       the new recruit will fit in, rules and regulations and any special duties and
       responsibilities involved in the job.

       Just as a new employee is often employed on a probation or trial,
       employers are also on trial. New employees will determine within the first
26 -

       few weeks whether the job and the organisation live up to expectations. If
       not, they will soon seek other employment that meets their expectations.

       Inducting and training employees

       Most employees who leave their jobs do so in the first three months.
       Studies have shown that a large proportion of them do so because of poor
       induction rather than poor selection. Attitudes and expectations are
       shaped during the early days, as a good supervisor, it is your
       responsibility to see that induction training is properly carried out for each,
       employee who joins your business. Some of the advantages that come
       from good induction are listed below.

       Good induction helps give new employees a favourable impression of the
       organisation and contributes to their overall enthusiasm for their new jobs.
       Thus it can be an important factor not only in reducing labour turnover and
       employee dissatisfaction but also in developing good morale.
       Induction gives you, the supervisor, the opportunity to establish a good
       working relationship with the new person and lets you explain the person's
       job in relation to others in the organisation. Company rules and
       regulations can be explained carefully, thereby minimising subsequent

       A good induction helps remove the uncertainty that everyone has in going
       to a new place of employment. As you probably remember from your own
       experience, the first few days in new surroundings are often anxious ones.

       Induction can also reduce the time spent ineffectively by new employees
       by providing a sensible program to follow during the first few days on the
       job. Neither too much nor too little, both of which can be frustrating and
       destroy confidence will be attempted if a well thought-out induction
       program is followed.

       Induction to a business should include the following:
      General background information about the organisation - its history,
       structure, products, competitors, promotion opportunities, scope to
       acquire new skills
      Introduction to lines of communication, both formal and informal
      General industry information
      Information on the overall working environment of the business
       Details of relevant awards and agreements, systems of                    pay,
      Sources of advice and assistance within the organisation
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      Organisation policy on smoking, alcohol, misconduct, holidays, what to do
       if you're injured, late or ill
      A tour of the business- other departments, main functional areas
      Health and safety requirements of the job and the department
      Hours of work, breaks, finishing time
      Time-keeping and recording procedures need
      Security systems; for example, fire drills, fire warden, location of
      Amenities - washrooms, lockers, canteen, cafe bar, car park
      The work layout
      Review of job description
      Introduction to work mates
      Outline of training to be given
      Pay - how and when the employee is paid, pay rates, deductions
      Everything about the employee's job - what tools, equipment and supplies
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       DAY 1
       Tour of Facilities and Department…………………………………….

       Introduce to co-workers………………………………………………..

       Show location of:
                       First aid stations…………………………………….
                       Lunch room……………………………………….…
                       Wash rooms…………………………………………       .
                       Bulletin Boards………………………………………
                       Time Clocks, if any……………………………….…

       DAY 2 ONWARDS

       Review important company policy/practices
                      Quality standards……………………………………
                      Performance expectations………………………….
                      Complaint procedures………………………………
                      Accident reporting……………………………………
                      Wage increase practices……………………………

       Review timing of and procedures for lunch and rest periods……….

       Issue and/or review:
                       Telephone lists………………………………………
                       Plant/office layouts………………………………….
                       Organisation charts…………………………………
                       List of co-workers‘ names and job titles……….…
                       Departmental Safety Rules………………………..
                       WHMIS requirements………………………………
                       Personal protective safety devices………………..
                       Start job training (emphasise safety aspects)….. 
                       Training and development opportunities…………
                       Special departmental procedures, if any…………
                       Employee benefit programs……………………….
                       Benefit claims procedures…………………………

         Briefly review employee‘s progress……………………….
         Discuss and resolve any employee concerns……………
         Build relationship of trust and cooperation…………….…

       Completed by __________________________Date ___________________
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       Like it or not, as a supervisor, you will be called on to evaluate
       the performance of employees for various reasons. It may be
       for a promotion, to identify training and development needs, for
       a pay increase or even for retrenchments.

       How should you make these appraisals?

       When you use a formalised system of appraisal, you are being fair and
       consistent as well as showing your interest in each employee's training
       and development. Using a formal approach, you observe a person‘s work
       behaviour and skills, discuss these with the employee! Through an
       appraisal interview and record these observations along with other
       information such as an assessment of potential for future promotions and
       areas for further training and development. So important is this evaluation
       of employees that most major organisations now regularly conduct some
       formal system of employee performance appraisal.

       What is a performance appraisal?

       A performance appraisal consists of a systematic evaluation employee's
       work performance and potential. Typical areas of ass include:
      quality/ accuracy of work
      quantity of output
      ability to make decisions
       job knowledge
      technical and job-related skills
      attendance and punctuality
      ability to work as a member of a team
      future potential/ promotability
       ability to work in other areas
       training and development needs

       How to appraise employees' performance

       These assessment areas will differ from organisation to organisation and
       from job to job, according to the requirements of the job, the department
       and the organisation.
       Performance appraisals are made on an annual or six-monthly basis or,
       monthly or even weekly. They should be carried out by an employee's
       immediate supervisor and in many organisations they are reviewed by the
       supervisor's manager.
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       What is the purpose of a performance appraisal?

       The purpose of a performance appraisal is to discuss performance and
       plan for the future - not punish for mistakes, make someone feel bad or
       provide a "short, sharp kick in the pants". Unfortunately, too many
       performance appraisals end up this way.

       Performance appraisals should be two-way discussions. They provide a
       formal arena for each employee to sit down and discuss their job with their
       supervisor. In this way, communication channels are opened and working
       relationships strengthened. Each has a chance to discuss how they see
       the employee's job and the supervisor's job in relation to it. This ensures
       that both are "speaking the same language" and holding the same
       realistic expectations. It also provides a chance to "get things out in the
       open" and discuss any small but nagging doubts, questions or irritants.

       Performance appraisals also provide a review function, where employee
       and supervisor sit down and take a serious look at the previous period
       and job performance. What was done particularly well? What needs
       improving? What skills or behaviours need strengthening? What mistakes
       were made and what can be learned from them? This review function also
       gives supervisors an ideal opportunity to recognise good work and thus
       increase an employee's motivation.

       And perhaps even more important, performance appraisals provide a
       chance to look towards and plan for the future. What training will the
       employee benefit from? What new goals or targets will be worked
       towards? What additional or delegated duties would provide increased job
       development or job satisfaction? Where would the employee like to see
       the job going? Their career? What other jobs in the organisation interest
       them? This is the supervisor's golden opportunity to ensure that the
       employee is dear about future job performance requirements and is
       motivated to work towards them.

       Conducting An Appraisal Interview

       Here is a summary of points to consider when conducting an appraisal
       What do you need to know from the employee?
      Attitudes and feelings about their job
      Ambitions, aspirations
      Successes
      Expectations of job, work, rewards
      Views on any job changes
      Self assessment of performance
      Main problems faced
      How can you be of more help as a supervisor
31 -

       What does the employee want to know from you?
      Clarification, job targets, responsibilities
      Objectives, standards, targets
      Recognition of good work
      Constructive criticism and help with problem areas.

       Ideally what you should agree together.
      Targets for the next review period
      Action plan for future development
      Any training needs
      How you will help, what support you will provide
      An overall assessment of performance

       It is important to keep any promises or agreements you have made during
       the appraisal.


       Supervisors need to ensure that a job gets done. To do this well, they
       need to promote a climate in which people can be become motivated. To
       learn how to motivate others we need to understand something about
       what makes people tick. There are three relevant questions to motivation.
      What are peoples basic needs?
      What do they need to perform their work?
      What happens if these needs aren‘t met?

       How do you get others to work for you?

       Motivation comes from within, your job as a supervisor is to get workers to
       do things in the best interests of your business because they want to do
       them. Successful supervisors are people who can provide their
       employees with the opportunity to achieve personal goals and satisfy their
       own needs while at the same time gratifying the organisations needs - that
       is, getting the job done.

       Research clearly indicates that most employees want their motivation
       needs met at work. Basically most people want the following things:
      Clear standards and objectives
      Adequate job training
      Supportive supervision
      Feedback on performance
      Opportunities for advancement
      Being treated as a worthwhile individual
      Safe and healthy working conditions
32 -

       What can you do to motivate employees?

      Treat employees as individuals- everyone likes to be treated as an
       individual not a number. Be genuinely interested in your employees. They
       are individuals with feelings and opinions. Take the time to talk through
       ideas with them.
      Make the work interesting- Many jobs are boring. As a consequence,
       employees sometimes lack interest and motivation. Lack of job interest
       can lead to all sorts of problems. Providing variety, interest and challenge
       can be difficult but the benefits from increased motivation are great.
      Provide growth opportunities- The opportunity to grow will motivate many
       an employee. It may mean letting the employee learn a more difficult job,
       encouraging someone to go to night classes or delegating some of your
       tasks to give a person a chance to broaden their knowledge and kills.
      Promote participation in decision making – Everyone likes to be in on
       what is happening,. This will help them to feel part of it and more loyal
       towards the business. Invite employees to contribute in the decision-
       making and the commitment from them will be greater.
      Promote co-operation and team work- knowing that they belong and are
       vital members of the team does much to help satisfy employee needs.
       The basic mateship system encourages one person to help another. This
       sort of teamwork needs to be promoted in any workplace where there are
       groups of employees.
      Seek and give feedback – talking openly and honestly with your staff
       promotes feelings of trust and confidence. Give feedback about how they
       are doing, the progress they are making and any problems that are
       cropping up. Ask them to evaluate your progress.
      Listen to your staff – Try to understand what they are saying and make
       constructive comments about their ideas. Being listened to makes people
       feel important and also more willing to listen to what you have to say.
      Be sincere with praise – Genuine praise and recognition for a job well
       done are always appreciated. Be sure to keep praise justified. An
       employee knows the difference between a good job and a mediocre one.
      Resolve conflict- with good judgement, understanding and openness,
       conflicts can be resolved. Focus on solving the conflict to everyone‘s
      Set a good example – Don‘t ask anyone to do something you wouldn‘t do
       yourself. Insist that the staff follow the rules as you do.

       Motivating means getting people to do something because they want to
       do it. It is a major part of a supervisor's job. We have seen that motivation
       comes from within and is based on certain needs being met, or rewards
       obtained, in accordance with a person's expectations. So, in a sense,
       supervisors cannot motivate anyone. What they can do, however, is
       provide the conditions or the environment in which motivation can take
33 -

       If you want your staff to be motivated to do that little bit extra, to go
       beyond the bounds of their job contracts, you will need to provide
       something in return. You will need to treat each person as an individual.
       You will need to get to know each member of your staff. You will need to
       ensure that each person clearly understands the goals and standards
       your requirements. You will need to open up channels of communication
       and work out, from the things people say and do, what their individual
       needs and wants are.

       Then you can try and provide them with the means to satisfy their needs
       and show them that the rewards they are looking for are attainable
       through good job performance. You will need to match the job to the
       individual as much as possible. When work provides the opportunity for
       people to satisfy their needs, they will be motivated.

       Costing Services

       To ensure that all expenses are covered as well as profit made, it is
       important to cost all of the services that you carry out in your salon. To
       determine a cost for a service you need to take the following things into
      Materials (retail prices for materials used)
      Overheads
      Labour (use hourly rate)
      Profit margin

    When considering service costing, profit margins and or increase in
    prices, ask yourself the following questions
   Can the service provided by the salon be improved upon or added to so
    that takings are increased?
   Is the buying and use of stock as efficient as it could be?
   Can expenses be trimmed without sacrificing efficiency?

       Adjusting Work Practices

       Look at work practices to see if efficiency can be improved. Consider the
       following questions
      Who does the work?
      How is it done?
      Why is it done at that time?
      Where is it done?
      Could the work be done by anyone else?
      Could the work be done in other ways?
      Could the work be done at another time?
      Could the work be done in any other place?
34 -

       Determine any changes in work procedures if indicated by evaluation of
       work procedures. Provide your staff with training in changed work
       methods and finally test the new procedures and processes that are in

Client Relations For Salon Managers
In today‘s volatile economy, providing excellent customer service can be the
critical difference in your business‘s success.
Customer service involves all the activities your business and your employees
conduct or perform to satisfy customers.
The importance of customer service

Recall how you felt last time you had poor service. Describe the situation, what
was said and how you felt. If you decided never to shop there again, what do you
think it cost that company not to satisfy you and keep you as a customer?

Poor customer service is expensive. Good customer service is invaluable, and
you can achieve in your company. As an employer you need to develop a
customer service system and design and implement customer retention
programs that will maintain customer loyalty, thereby increasing the profitability
that your customers will refer new buyers to your business.
Businesses that provide superior customer service can charge more, enjoy
greater profits, and increase their market share.
35 -

Activity: Write down a few reasons you think that people might stop doing
business with you. After you write down a reason, describe what you could do to
correct the problem.
Reasons                                Solutions
36 -

Reasons that customers stop coming to you include:
 1% die
 3% move away
 5% seek alternatives or develop other business relationships
 9% begin doing business with the competition
 14% are dissatisfied with the product or service
 68% are upset with the treatment they have received

If you look at these percentages, you will realise that you have 96% control over
the reasons why customers stop doing business with you.

Never take a customer for granted. Be grateful they have decided to do business
with you and not a competitor. Work as hard as you possibly can to deliver more
than they expect, and you will go a long way toward retaining your customers.

Retention Through Customer Service Marketing
Through good public relations you are able to introduce new clients to your salon
as well as retaining those clients that you have. Public relations can be described
as the advertising or promotion of the professional image of the salon without
spending money.

Your business can go beyond customer service, increase customer retention and
enhance marketing efforts all at the same time.

Here are 6 customer retention policies that are also good marketing strategies for
your business.
   1. Frequent buyer program
   2. Frequent referral programs
   3. Thank you cards
   4. Newsletters / Personal letters
   5. Telephone recalls
   6. Customer special events (e.g. birthdays)
   7. Lectures / appearances

News Editorials
Your salon could be featured in the newspaper or feature columns of fashion
magazines, beauty articles or community papers. Maybe your salon could offer it
services to worthwhile community projects, or maybe it has been involved in local
fashion parades etc.
37 -

Newsletters are a great way to keep customers informed of what is going on in
your business. You can tell them whatever information you need them to know. It
is a good way to introduce new services and special events that you have
News stories could cover new fashions, use of the latest technology, acquisitions
of new business, moving place of business, promotions or winning an award of
some kind.
When preparing news stories, follow accepted simple rules:
     Type written
     Double spaced
     Sentences no longer than three lines
     Paragraphs no longer than three sentences
     Each article approximately 150 words in length
     Include pictures or photographs
     Include the salon name, address and phone number

Lectures / Appearances
Nail or beauty care discussions for various target groups eg, schools, clubs and
disabled groups.

Promotion of Professional Image
This could be described as the first impression that you present to your clients.
The provision of first class nail services in hygienic surroundings by highly skilled
operators who take pride in their work and interest in their clients.

The nail artist and the salon need to cultivate a sense of rapport with the client
through salon image and first impressions. You can do this through:
     salon appearance
     appearance of staff
     staff attention to clients
     efficiency of staff interaction
     technical expertise
     follow through( recommendation of home care products)
     effective use of the telephone
     efficient use of appointment book
     use of effective communication skills
38 -

Service Enhancements
Offering your customers value added service means giving the customer more
than they expect.

An example of a value added service is the concept of the ‗bakers dozen‘, you
pay for 12 bread rolls and receive 13. This is their attempt to compete by
providing value added service. Sometimes you can charge more for value-added
service, because customers will pay the added price just to receive quality

What types of service enhancements can you provide?. List your service
enhancements and why they would interest your customers.. Be specific when
you list the benefits, as these become excellent marketing and advertising

Current Service            Service Enhancement        Benefit

Frequent Buyer program
Frequent buyer programs are similar to airline frequent flyer programs. You are
rewarding those customers who buy from you regularly. When designing a
frequent flyers program for your salon be sure that it is easy for all your regular
customers to benefit.
39 -

Activity: List the services that your salon offers. Then write down the number of
reward points the customer will receive when she purchases each service. Hint:
give each customers 1 point for each dollar spent in the salon.

Service                                Points

E.g.: Buff and Paint                   18 points
40 -

Now you need to list your ‗rewards‘, that is the services you offer and the amount
of points required to receive this service for free.

Service                                 Frequent Points Required

e.g. French Polish                      45 points

Frequent Referral Programs
This is where your clients recommend your services and products to other friends
and colleges. Thus also known as word of mouth advertising.

A lot of your business relies on referrals. You should reward the people making
referrals to you. Your rewards help to reinforce their behaviour, thereby creating
a positive cycle and a mutually beneficial relationship.
The best way to use a frequent referral reward program is to develop it in levels.
When somebody refers more than five people, do something special for that
person. Then start the referral reward program all over again.
41 -


Number of
Referrals                              Reward

       1                Thank you card
       2                Telephone call
       3                Flowers
       4                Small Gift (under $10)
       5                Gift Certificate (dinner
                        for 2)

Activity: Develop your own reward recommendations.

Number of
Referrals                             Reward






Thank You Cards
A simple and effective customer retention technique is writing a thank you card
and sending it to someone who has bought something from you. (If you do not
want tom write out a card to every customer , then have your cards pre printed.
42 -

Telephone Recalls
Telephone recalls work well in any type of business. You can call customers a
day in advance to remind them of their appointment.. Orr if they have not been in
for some time , you can call them to see how they are doing and inform them of a
reason to come in now to do business with you.

Service Phases
There are five phases of service that nail artist‘s needs to consider when dealing
with effectively with customers. These are:
    1. Greeting
Smile. Use the customer‘s name. Be happy to see them. Assess the client‘s
personality type.

  2. Assessment of the clients needs.
Consult with the client, listen attentively and establish trust.

   3. Agreement
Tayler proposed service to the clients needs and then gain the client‘s agreement

    4. Delivery of Services
Deliver the services, give the client more than they expected. In doing this it
reinforces the clients trust with you and your salon.

    5. Completion
Seek the feedback from the client regarding their satisfaction and anticipate the
clients future needs.

Dealing With Complaints
Customers who complain feel annoyed, cheated or victimized. They also feel that
their situation is the most important in the world. Understand these feelings and
treat your customers accordingly. Dissatisfied customers tell up to 20 friends that
they are unhappy with the way you do business. However if you resolve their
problems 505-74% of these customers will do business with you again.

Here are a few tips on handling customer complaints:
   1. Apologise
  First and foremost, say you are sorry for the inconvenience the customer has
  experienced. A sincere apology usually defuses the customer‘s anger.

    2. Urgent restatement
   Restate the problem as the customer described it to you and make certain that
   you fully understand what the customer means.. Let the customer know that
   you will do everything possible to solve the problem.
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    3. Empathy
   Make certain that you communicate clearly to the customer so that they
   understand that you know how they feel. Do not patronise. Use statements like
   ―I can see why you‘re upset‖, ― I understand how you feel‖.

    4. Restitution
   Here is your chance to make points. Not only will you take immediate action to
   resolve the customers complaint, you will go a step further. Tell and show
   them that you will make it up to them in a special way. You may have to
   provide a free gift for their troubles, or you may have to offer a service at a
   discount price. Whatever you do, look at it as adding value rather than
   spending extra money.

    5. Follow up
   Be sure to find out if your customer is satisfied. You can do this by asking a
   simple question or two at the end of the recovery process. ―Have we resolved
   your complaint to your satisfaction?‖ ― What else may we do for you?‖ After a
   few days you may also like to send a letter.

   Tips for long term Customer Retention

          Call each customer by name
          Listen to what each customer has to say
          Be concerned about each customer as an individual
          Be courteous to each customer
          Be responsive to their individual needs
          Know your customers personal buying histories and motivations
          Take sufficient time with each customer
          Involve the customers in you business. Ask for their advise.
          Make customers feel important. Pay them compliments

The Customers bill of rights
       The customer has a right to the following:
           Professional, courteous and prompt service
           Your full and undivided attention each time they choose to do business
             with you.
           Quality products and services
           Fulfillment of their needs.
           Competent, knowledgeable and well trained staff
           Appreciation from you and your staff for pat and future business.
44 -

       Managing Salon Safety
       Each year a significant number of people die at work and many more are
       severely affected by work-related injuries and disease.
       Australia's performance in the protection of employees' health and safety
       leaves considerable scope for improvement:
             Workers' compensation records for 1996-97 show there were around
       134,000 claims for work-related fatality, permanent disability or serious
       temporary disability, excluding work-related disease. However, more
       comprehensive data on Australian work-related injury and disease are
              Historical data on fatalities due to work-related injuries indicate that
       there are around 440 such deaths each year. Many of these fatal injuries are
       not identified by the compensation data.
             Attributable risk calculations, which have known limitations, put the
       estimated number of deaths per year from occupational exposure to
       hazardous substances at approximately 2,300.
              In the Australian workplace there are over 15 cases of serious injury
       occurring every hour, and there is at least one death per day - at a cost
       equivalent to five per cent of Australia's GDP.
       Poor performance on occupational health and safety places a significant
       burden on the Australian economy. The direct cost in terms of workers'
       compensation premium payments for 1996-97 was $4.9 billion, but the true
       cost is much greater. The total cost of workplace injury and disease in 1992-
       93 was estimated to be more than $20 billion. More than one million working
       weeks were lost in 1996-97 due to new work-related compensated cases
       reported in that year.
45 -

       National OH&S Improvement Framework
       The fundamental purpose of the national framework is to reduce the
       incidence of work-related injury, disease and death. To achieve this we need
       to establish clear national objectives and goals. The setting of OH&S
       improvement targets at the national level requires more careful consideration
       based on an examination of the experience of jurisdictions in setting targets
       and measuring performance against them.

       National Standards
       The National Commission sets OH&S Standards for hazards common to
       many industries and workplaces across Australia. These standards do not
       become law until they are adopted as regulations in each of the states and

       Duty Of Care
       Each State and Territory has a principal OHS Act which sets out
       requirements for ensuring that workplaces are safe and healthy. These
       requirements spell out the duties of different groups of people who play a
       role in workplace health and safety. These requirements are known as the
       Duty of Care.
       Employers and employees and product manufactures all have a DUTY OF
              Employers must provide a safe and healthy work healthy work
               environment and a safe system of work.
              Employees have a responsibility to carry out their work in as safe a
               manner as possible.
              Suppliers and manufacturers have a responsibility to provide safe
               products as well as full and accurate information about the materials
               materials (MSD Sheets) and equipment they provide to workplaces.

       Benefits of a proactive approach include:
              Improves       productivity      and        customer      service.
       Investing energy into creating health and safety standards and a safe
       working environment gives your employees and customers confidence that
       your business is responsible and capable and that you CARE about them.
               Improves      your    overall business      operating    systems.
       When you start to examine job tasks to identify and control hazards you are
       indirectly improving your business processes as you will also have the
       opportunity to examine whether tasks are being performed with the most
       efficient use of time and resources.
                  Improves your overall business image.
46 -

        Businesses underestimate the benefits of promoting good health and safety
       standards. For example your products/services displaying information
       regarding the extra efforts your company has taken to ensure a safer
                                              Protects your business profits.
       Maintaining a safer and healthier workplace will save you the costs
       associated with work related injury/illness.
47 -


HAZARDS                                AND                           SOLUTIONS
What is a hazard?
        A hazard is something that has the potential to cause harm. This harm can
        effect people, property and processes as follows:
               People - Injury, illness, death, psychological trauma;
               Property - Damage, contamination, theft and wastage;
               Processes - Work disruption and interruption to production.
HAZARDS                                AND                           SOLUTIONS
       Conducting a Risk Assessment
        The are three essential steps which you should take to make sure that
        hazards in your workplace are eliminated or controlled:
        1. Hazard Identification
        Methods for identifying hazards in your workplace include:
               History of injury and illness
        Examine the types of injuries and illnesses that are occurring in the
        workplace by asking your employees and reading through first aid reports
        and previous compensation claims.
               Job Safety Checks
        Observing a job from start to finish and recording its steps gives you the
        opportunity to assess each step for potential hazards that may have been
        overlooked in the past..
               Employee consultation
        Ask your employees about health and safety concerns.
               Safety audits
        This audit would usually be conducted by external safety consultants and
        would result in a written report with recommendations for improvement.
        Insurance companies can also conduct safety audits prior to renewal of your
        insurance policies.

        2. Risk Assessment
        Once hazards have been identified you need to assess the risk. This is the
        likelihood of an injury or illness occurring from exposure to the hazard. When
        assessing risk there are several factors that should be taken into account.
        These factors include:
               Severity;
               Frequency;
48 -

             Intensity of the exposure.
       For example, the intensity, , frequency and duration of exposure to the suns
       harmful rays are factors when determining the risk of skin cancer.
       Severity can be classified as:
             Minor injury with no time off work.
             An injury/illness resulting in time off work.
              An injury/illness causing a permanent disability or loss of body part or
       bodily function.
             An injury /illness that could cause death.
       The overall purpose of the assessment is to determine priorities in risk
       3. Risk Control
       Once the hazard has been assessed control options for eliminating or
       reducing the risk of exposure to the hazard must be considered
49 -

       A hazardous substance is any substance that has the potential to harm the
       health of people.
       What Can You Do?
       Existing chemicals
       Identify which chemicals are hazardous by:
              Checking the Label - if there are safety and risk warnings on the
       container/label then the chemical has the potential to be harmful if not used
       correctly. All unlabelled chemicals are a risk and should be carefully
       disposed of, contact your local council about chemical disposal.
            Information - Contact the chemical supplier you obtained the
       chemical from and ask them to supply you with a material safety data sheet
       A MSDS is a chemical information sheet that must provide information about
       the health and safety effects of the chemical and safety precautions for its
       correct use and storage. It should also include first aid requirements.
       The supplier has a legal obligation to provide you with this information.
       Ensure that all employees who are using the chemical have access to the
       MSDS and receive training in its hazards and safe use.
50 -

       Dangerous Goods legislation exists in all jurisdictions in Australia.
       Compliance is required with regard to the storage, handling, packaging and
       transportation of these goods in accordance with the National Code of
       Practice for the Transportation of Dangerous Goods by Rail or Road. (This is
       available from Australian Government bookstores.)
       How do you know if a chemical is classified as a Dangerous Good?
       Dangerous Goods will have an identifier on their label which is in the shape
       of a diamond. The diamond will have a Class number of 1 to 9.
       What is Occupational Overuse Syndrome?
       Occupational Overuse Syndrome (OOS) is also known as Repetition Strain
       Injury (RSI). It is a collective term for a range of conditions characterised by
       discomfort or persistent pain in muscles, tendons and other soft tissues in
       the back, neck, shoulder, elbows, wrists, hands or fingers.
       Who can it affect?
       OOS may affect workers in any occupation, particularly those doing tasks
       which involve:
             Repetitive or forceful movement of both arms;
             Maintenance of constrained or awkward postures.
51 -

HAZARDS In the workplace
Working Environment
The working environment includes the atmosphere, temperature and comfort,
lighting, air quality, noise and the general surroundings. When any one of these
working conditions is substandard they can affect health and safety.
A brief overview of hazards relating to lighting and temperature and comfort follows.
Some other information on the general working environment is provided in Safe
Premises/Buildings in the Getting Started with OHS section.
       There is also a checklist for identifying hazards in the working environment.
       There must be levels of lighting sufficient for the work areas and tasks being
       performed. Too much and too little light
             can lead to: Eye strain;
             Headaches;
             Blurred vision.

       Temperature and Comfort
       Uncomfortably warm or cold work environments can effect the comfort,
       concentration and productivity of employees. Factors which contribute to
       comfort include:
             Humidity;
             Air movement;
             Level of activity;
             Clothing.

       Temperature controls can range from fans and blowers to air conditioning
       and heating systems. Optimal temperature is between 21 to 24 degrees
       Celsius. Environments that have extreme temperatures can harm health and
       safety generally and should be assessed so that adequate controls can be

       GETTING                     STARTED                 WITH               OHS
       Safe work procedures
       Safe Work Procedures can provide a written record of how a job is to be
       performed and what hazard control methods are in place.
52 -

       What is a Safe Work Procedure?
       A Safe Work Procedure is a written work instruction of how a job task should
       be conducted from start to finish. A safe work procedure should list:
                A breakdown of the task into steps;
            Controls to prevent injury and/or persons coming in contact with
       known hazards;
                Tools and equipment required;
                Information and training required.
       Why do you need them?
                To use as a basis for training employees/contractors;
              They can be used as a basis when checking that existing hazard
       controls are working.
       How are they developed?
       A Safe Work Procedure should be born out of a Job Safety Check. The Job
       Safety Check outlined below is based on the principles of risk identification,
       assessment and risk control.
       A Job Safety Check
       There are five steps in the process of carrying out a Job Safety Check. They
       Step 1.    Observe.
       Step 2.    Record the sequence of basic job steps.
       Step 3.    Assess potential failures of each step with the worker.
       Step 4.    Suggest ways of eliminating the hazards.
       Step 5.    Make an efficiency check with another worker.

       Before conducting the Job Safety Check
       Jobs that should be subject to a Job Safety Check are those with high risk
       tasks. That is jobs with a history of injuries/accidents or with the potential to
       cause the most serious injuries. Choose the right employee to observe. This
       should be an employee with a good hands on experience and knowledge of
       job tasks being observed. You may need to observe more than one
       employee where the work is broken into different shifts.
       How to record the sequence of basic job steps
       Here is an example of the breakdown for the job of changing a flat tyre on a
       1.        Position the car and set brakes.
       2.        Block wheel.
       3.        Remove spare tyre and position it near by.
53 -

       4.    Position car jack.
       5.    Remove hubcap and loosen nuts. .
       6.    Jack up the car.
       7.    Remove nuts.
       8.    Remove wheel.
       9.    Position spare wheel.
       10.   Fit nuts but don't fully tighten.
       11.   Lower car.
       12.   Tighten nuts.
       13.   Replace hub cap.
       14.   Store jack and wheel.
54 -

         Note the following tips:
                Each step tells generally what must be done with no reference to
               No hazards are mentioned and no safety precautions are prescribed.
         That comes later.
                The job steps are described in order of occurrence.
              The description of each step starts with an action word, i.e. position,
         remove, tighten etc.
       A common mistake made with Job safety Checks is to unnecessarily list a large
       number of job steps. For example: Park the car.
             Get out of the car.
             Walk to the car boot.
             Open the boot etc.

         How to Assess all Potential Failures and Exposures
         to Hazards
         The following factors should be considered during the job observation:
                Is there exposure to noise, fumes, or dust?
                Can equipment fail in any way?
                Is the work physically arduous?
                Is the work made harder by external factors (climate, noise etc.)?
              Is the work made harder by the way it is organised (shift work,
         adequate rest breaks)?
                Is there enough space to move about?
               Does the body have to sustain awkward body postures, such as
         crouching, reaching overhead?
                Are there demands on vision, hearing and communication skills?
                Can the person be struck by or contacted by anything while doing
         this step of the job?
               Can the person strike against or make injurious contact with
                Can the person be caught in, on or between anything?
                Do loads need to be lifted/or handled?
                Can the person slip or trip or fall?
                What level of supervision is required?
               Are there any exposures to psychological hazards (such as dealing
         with public complaints/abuse, shift work, dealing with trauma)?
55 -

Salon Marketing
Unlock the Door to Marketing Success
A good marketing program involves a set of key activities that, if executed
properly, will unlock the door to higher profits. Key activities include advertising,
promotions, product or service packaging, discounts, new products and
distribution. These activities usually involve a variety of personnel (representing
different business functions), or a few people wearing a variety of hats. Everyone
involved in implementing the marketing program must have a clear and
consistent understanding of the intent and objectives, for greatest success.

The most effective way of insuring that each contributor is directing his or her
efforts appropriately, is good communication. One form of that communication is
a thoroughly documented, clearly worded, and properly formatted marketing

Of course, this is one of those cliches that is easy to say, but not so easy to
accomplish. Most of us are not professional writers, nor do we have an MBA
degree. A marketing plan must consider the ability of the enterprise, the
capabilities of the offering(s), the needs and accessibility of the market, the
implications of environmental factors and the strength and likely reactions of the
competition. Integrated into all of this must be strategies for pricing, promotion
and distribution. So where do you start, how can you be sure that all of the right
issues are addressed, and how do you put it all together into a readable

Mission Statement
A mission statement is a goal to develop a product of service being the premier,
or optimum that it can be.
A creation for distribution and consumption by:
Providing samples and demonstrations at no cost
Giving consumers the chance to experience a superior product
Giving small product companies the chance to distribute their products,
increasing their exposure through professional recommendation
Creating a service that is superior to any other within a demographic area.

Management Team
A management team that has the proven entrepreneurial and management skills
to succeed in running an innovative, market-driven company. They have the rare
combination of top business school training and a strong connection with the
beauty market.

This business plan provides a blueprint for the launch and growth of the selected
business. It will also serve to demonstrate the operational and financial viability.
56 -

Advantages are offered by the use of new or different products. Longer lasting,
stronger, less natural nail damage and environmentally improved would justify a
premium price.

Market Analysis
Research to study and determine the consumers likes and dislikes of products or
services in the nail industry. The result should demonstrate that consumers
place" comfort, fit, and feel" as important characteristics of artificial nails. Other
important criteria in the study include "suit active life-style", "has performance
advantages", and "fashion".

Focus Group Interviews

To better understand the criteria used by consumers, focus group interviews can
be conducted. Analysis of the focus group protocols provided a rich qualitative
assessment of consumer decision behavior in this product category.

Competitor Content Analysis
Content analysis is employed to systematically and objectively identify the
specific content (i.e., the features and/or benefits) or other business sservices
and products.

Key Informant Analysis
Informal discussions give access to the findings of the primary research and
market experience. These discussions confirmed what had been derived from
the focus group interviews, and the competitor content analysis.

Target Market
It was necessary to identify clients that may be interested in the salon techniques
and services. Preliminary analysis of local residents identifies the type of client
that would most likely use the product or service. A market profile typically uses
primary and secondary sources to answer key questions about a potential
market. A profile is a picture or an outline. Information that makes up the social
profiles of the people in your target market is called demographic information,
and includes:

             Age, usually given in a range (20-35 years)
             Sex
             Marriage/partner status
             Location of household
             Family size and description
             Income, especially disposable income (money available to spend)
             Educational level, usually to last level completed
57 -

              Occupation
              Interests, purchasing profile (what are consumers know to want?)
              Cultural, ethnic, racial background

The Right Product Or Service
What are your customers' needs?
What do they expect to get when they buy your product or use your service?
The right product is the one that best fits their requirements.
People who eat in restaurants want more than a good meal. They might expect
quick service, a reasonable price, a vegetarian menu, a children's menu,
entertainment, a drive through window, or to identified with a trendy crowd. It
becomes a difficult and probably unprofitable venture trying to satisfy everyone's

If you have identified your customer and listed their expectations, you can design
your product or service around their requirements.

The more you fulfil your customer's expectations, the better the quality of your
product. Think of your product or service as more than just what the customer's
pays for. When you are planning your business consider how the whole
transaction meets the customer's needs.

Positioning your Business
Positioning refers to the image customers have of your business. The goal is to
create a business image that enables you to position your business in such a
way that, in essence, it acts as a natural magnet for your intended customers. A
number of factors often look for include:

              Price (i.e. cheapest price, fair price, price for quality, etc)
              Assortment
              Parking
              Service
              Sales personnel
              Quality
              Fashion
              Convenience
              Location
              Atmosphere

Your overall position should emphasize those areas that your customers value
most and those, which make you different from your competition.

Pricing Techniques
The importance of pricing can not be understanding as incorrect pricing can often
58 -

result in the failure of a business. New businesses often make the mistake of
either charging too little or too much for their product or service. So to help you
avoid making one of these mistakes, the following section will outline some of the
guiding principles of price determination.

Price is a key part of marketing. Setting prices is called Pricing

Setting Prices
Prices for products and services can be set by pricing to the market, pricing to
your costs, and rule of thumb pricing. New business people with little experience
may set an initial price based on the market, and then as experience grows, reset
prices according to costs. These two aspects of price what is acceptable to the
market, and what costs are—must both be considered. In addition, effective
pricing depends on the business goals of your company: do you want to
maximize profits or are you aiming for high growth in sales? The choices that a
business ultimately makes about its markets and sales make a big difference in

NOTE: Be careful about underpricing in order to compete or make sales. Use
competitor‘s prices to establish the price range for similar products or services
but don‘t underprice‘ if your true costs are higher, your final prices will have to be

Cost Approach to Pricing
Price must cover all costs of good/services sold, including production costs of
supplies, materials, fixed overhead or fixed costs as well as supplies and
             Use this simple formula in setting a price (per unit):
Total Costs of Production Per Unit + Desired Dollar Profit Per Unit
Businesses can set different profit rates, for example 15% profit on supplies and
materials, 20% profit on labour/ time, and 25% profit on overhead. These more
complicated approaches to pricing usually emerge in response to the special
needs of a particular business.

If your research reveals that similar products or services are available on the
market, at a cost much lower than what you could offer, you may have to either
adjust your profit margin, the return you expect, or decide to provide enough
specialized service or selection so that the market will pay the extra.
Alternatively, you may be forced to conclude that you cannot afford to make this
item or provide this service and look for something else to do.

NOTE: Remember to cost materials at the level it costs to replace them NOT at
original prices; include salaries as a business expense; include interest in your
business cost calculations ―Rules of Thumb‖ in Setting Prices. Some types of
businesses charge prices according to certain ―rules of thumb‖. For example:
59 -

price is always twice labour plus materials, or twice materials plus labour
depending on which is higher; price is always materials and labour plus 20% for
fixed costs, plus 25% for profits. Calculating actual costs is the only proven way
to make sure your prices cover your costs.

Marketing Strategy
Personal selling of the technology could be the chosen strategy. Promotion and
advertising are also strategies to consider.

Risk Reduction Strategies
Risks that may threaten the viability of any business operation. The following
summarizes the main risk reduction strategies implemented:
 Investigate all the possibilities of the products that you will recommend
 Establish good salon policies
 Maintain training and product awareness
 Keep a close watch on competitors

If you are re-marketing your Product or Service, your focus will be on the
elements of your strategy that affects your marketing mix:

Pricing and its impact to both your competitive position and to the perception and
benefits offered to your prospects and customers.
             Distribution and/or delivery of the product/service and its impact to
              your enterprise and your prospects/customers.
             Promotional efforts and their fit with your product/service and your

Same Product or Service in Changed Market.
If you are re-marketing your Product or Service, your focus will be on the
elements of your strategy that affects your marketing mix;
Pricing and its impact to both your competitive position and to the perception and
benefits offered to your prospects and customers.
            Distribution and/or delivery of the products/service and its impact to
              your enterprise and your prospect/customer.
            Promotional efforts and their fit with your product/service and your

Same Product or Service in New Market.
You may be acquiring a new business and need to perform due diligence or you
might be taking a hard look at your business to find areas for improvement.
            The characteristics of the prospect and their likelihood of purchase.
60 -

           Cost and benefits factors of the product/service in relation to the
            market needs and the other available solutions.
           Your ability to develop and deliver the product and/or service.
           The price, promotion and distribution/delivery factors.
           Both the direct competition and those offering alternative solutions.
           The environmental factors that may provide opportunities or
            threaten your efforts.
           Your basic strategy for establishing and maintaining a competitive

Where to find information
In most cases business information can be gathered at no charge. The following
are sources of information on your industry.

               Competitors

               Neighbouring business

               Sales representatives

               Trade suppliers

               Business friends and associate

               Chamber of commerce/Board of Trade

               City or Municipal Hall

               Local government Agent‘s office

               Downtown business associations

               Trade associations

               Shopping centre developers

               Newspapers, radio and TV

               Internet

               Various directories

               Bookstores

               Trade publications

               Advertising agencies
61 -

                Post Office

                Phone book, Yellow Pages

Observe Your Competition
Get out on the street and study your competitors. Visit their stores or the
locations where their products are offered. Analyze the location, customer
volumes, traffic patterns, hours of operation, busy periods, prices, quality of their
goods and services, product lines carried, promotional techniques, positioning,
product cataloques and other handouts. If feasible, talk to customers and sales

Consider how well your competition satisfies the needs of potential customers in
your trading area. Determine how you fit in to this picture and what niche you
plan to fill. Will you offer a better location, convenience, a better price, later
hours, better quality, and better service?

Talk to your Suppliers
Conversation with your suppliers can tell you a great deal about how your
industry works and what trends are taking place in your market. They may be
able to tell you valuable information about pricing techniques and mark ups,
about the fastest moving lines and why they are selling, and why some
competitors are successful.
(They can also provide you with information about credit terms.)

Talk to your customers
Conversation with your customers or potential customers can give you insight
into what their needs are. They can indicate what they look for in your industry,
what they think of your competition, what price they might pay and what level of
service they like. Surveys and Focus Groups represent more formal ways of
getting insight from your customers.

Salon Advertising
62 -

Promotion, Advertising, and PR
In order for your business to succeed, you generally need to promote your
products or services to the same buyers that your competitors are targeting.
Even if your business is one-of-a-kind, you still need to tell target buyers that
your business exist with some kind of advertising or promotional communication.
Public relations (PR) activities are another way to promote the image or
reputation of your product. PR is similar to promotion and advertising, but can be
more indirect, since some or all of the publicity a company‘s products and
services receive from public relations activities may not be controlled by the

If you‘re a big manufacturer of business-to-business goods, you may need to do
much more personal sales promotion (to purchasing agents of your customer
firms) than a consumer goods retailer, who would go to a promotion mix that
emphasises paid advertising.

          Planning outlines the steps you need to take to create a
           comprehensive promotional game plan.
          Promotion ideas discuss a number of opportunities for materials or
           events that involve direct product purchase incentives.
          Advertising ideas discuss the use of advertising to inform, educate,
           persuade, and remind.
          Public relations‘ ideas discuss some indirect but highly effective ways
           of keeping your business in the public eye.

Advertising Ideas
Advertising is impersonal, usually paid communication intended to inform,
educate, persuade, and remind.

Advertising is a sophisticated form of communication that must work with other
marketing tools and business elements to be successful. Advertising must be
interruptive - that is, it must make you stop thumbing through the newspaper or
thinking about your day long enough to read or hear the ad. Advertising must
also be credible, unique, and memorable in order to work.

And finally, assuming the actual advertising is built upon a solid strategy, enough
money must be spent to provide a media schedule for ad frequency, the most
important element for an ad is memorability.
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Word-of-mouth advertising
Word-of-mouth advertising has existed as long as mankind has communicated
and traded goods and services. Word-of-mouth advertising is considered the
most effective form. Word-of-mouth has the desired qualities of strong credibility,
high audience attention levels, and friendly audience reception. It features open-
ended conversation with questions and answers about the product, psychological
incentives to purchase, memorability, efficiency and frequency.

Word-of-mouth advertising passes product information to many other potential
buyers (and may even include promotional trial demonstrations and free
sampling), at little or no cost to the business. Whenever possible, a small
business should build an advertising program that results in word-of-mouth
advertising! Satisfied customers are your best advertisements.

In some respects, typical medial advertising acts only as a catalyst to achieve
word-of-mouth advertising and increased sales. Successful advertising will
achieve many times more ad mentions through word-of-mouth than the number
of paid media presentations of the ads.

Make a list of ads that are memorable to you that you would freely talk about to


Advertising Checklist
Here are some guidelines for creating memorable advertising that really sells:

       1.    Make sure your ads are “on strategy” with your business
             planning. Good planning ensures identification of the correct target
             audience            for             your                advertising.

       2.    Communicate a simple, single message. People have trouble
             remembering someone‘s name, let a lone a complicated ad
             message. Use the ―KISS‖ principle for ad messages: ―Keep It
             Simple, Simon.‖ For print ads, the simpler the headline, the better.

       3.    Stick with a likeable style. Ads have personality and style. Find a
             likeable style and personality and stay with it for at least a year or
             more of ads. Changing ad styles and personality too often will
             confuse potential buyers. It also fights against memorability.
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       4.   Be credible. If you say your quality or value is the ―best‖ and it is
            clearly not, advertising will speed your demise, not increase your
            business. Identifying and degrading the competition should also be
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       5.    Ask for the sale. Invite buyers to come to your store, send for
             more information, or call for information and orders in the ad.
             Provide easily visible information in the ad for potential customers
             to buy: location, telephone, number, stores hours, charge cards
             accepted, etc.

       6.    Make sure the ad is competitive. Do your homework. Examine
             competitive ads in the media that you are planning to advertise in.
             Make sure your ad stands out from competitive ads. You can use
             personal judgment, ad test exposures to a small group of target
             buyers. Compare ads for uniqueness, memorability, credibility, and
             incentive                      to                       purchase.

       7.    Make sure the ad looks professional. If you have the time and
             talent, computer graphics and desktop publishing software can
             provide professional-looking templates to create good looking print
             ads. Consider obtaining writing, artistic, and graphics help from
             local agencies or art studios that have experienced professionals
             on staff, with expensive and creative computer software in house.
             They may save you time and money in the long run, with better
             results. Electronic ads (eg. TV, radio, Internet) and outdoor ads are
             best left to professionals to write, produce, and buy for a fee or
             percentage of media dollars spent (ie., generally 15 percent of
             gross                        media                         spending)

       8.    Be truthful. Whatever advertising medium you select, make sure
             your message is ethical and truthful. There are stringent laws
             regarding deceptive practices and false advertising.

Advertising Media
There‘s an old adage that holds that at least 50 percent of all advertising is a
waste of money. It‘s probably true - and if you can figure it out which half of your
ad budget is useless, you‘ll save a bundle. But until you achieve this wisdom
(which has so far has eluded most marketers), you‘d be wise to continue
advertising full tilt and not take a chance on eliminating something that just might

Here are the major types of advertising used by small businesses:

Low and no cost advertising
Telephone directories and 1800 numbers
Local print ads
Signs and displays
Higher cost advertising alternatives
Electronic marketing
Direct mail and catalogs
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Special advertising opportunities
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Low and No Cost Advertising
There are many things you can do in the way of advertising, promotion, and
publicity that cost little or nothing. And when you become successful enough to
be able to afford more sophisticated ad techniques, there are ways of measuring
to some extent just how effective these methods are in terms of your business
growth. As always, the chief concern is that the advertising do what it is intended
to do: cause more people to purchase more from your business.
Like all entrepreneurs, let‘s start at the bottom and work up - with a menu of ad
ideas using freebies and mini media up to mass media and emerging techniques:

          Ask for referrals, consistently!

          Choose a simple logo that may be used on all printed material to
           identify your company.

          Print attractive and informative business cards that include your logo
           and hand them out everywhere, consistently! If appropriate for your
           business, you can use your card as a discount certificate or other
           incentive. Or, you can have it place on a magnetic backing so that it
           (hopefully) winds up on a refrigerator. If you use letterhead stationery
           in your business, have it match your business card. Keep your identity
           as consistent as possible.

          Print up some gift certificate. These let your customers introduce you
           to new customers. Since you get paid up front for the product or
           service, these are cash flow friendly.

          Birthday and holiday cards sent to clients could show your logo and
           remind them of your continued interest. Customer comment cards are
           a great way to solicit feedback and involve your clients in your

          Brochures let you provide a lot of detail about your product or service.
           Template software can be obtained that permits you to use your
           computer to generate classy looking brochures at minimal cost. Make
           your headline stand out. Use clip art or graphics. Give your customer
           as much quality information as you can pack into this identity piece.
           Keep it up to date and peronalise it when possible (by writing in the
           margins or underlining specifics that might interest a particular
           prospective customer). If you have a slightly bigger budget, go for a
           slick four-colour piece.

          Fliers are the thrifty entrepreneur‘s dream. You can create them very
           inexpensively on your computer, or your local print shop can do them
           for you. You can use as much colour as you like, with either a colour
           printer or old-fashioned coloured paper stock. Pack them full of
           information and post them on every bulletin board you can find that‘ll
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           allow you space. Easy to distribute in bulk, these handy attention-
           getters can also be used as bag stuffers or inserts to put in with billings
           or to include when mailing payments to your suppliers.

       In fact, don‘t mail anything out of your business without including some
       little sales piece. Take advantage of piggybacking on that postage stamp.
       Placing stacks of flyers in building lobbies and tucking them under
       windshield wipers are done frequently, but you must be willing to alienate
       some people if you use these methods of distribution.

          Door hangers are very effective and widely used by fast food and
           home delivery and service businesses. If you choose this medium,
           don‘t scrimp on the stock. Make it heavy so it won‘t blow off
           doorknobs and litter the neighborhood. Add a coupon or some other
           incentive to your copy. Door chargers are a good way to focus in on a
           specific target buyer.

Telephone Directories
Advertising in telephone directories is, for some businesses, critically important.
But it‘s definitely not cheap! Publishers of these directories have stringent
guidelines that make it hard for you to distinguish your ad from your competitors‘
without spending a lot of money.

The cost of advertising varies, as does the market served. Try to pick the one
that targets your potential customers the best at the lowest cost.

Get all their prices and pick their reps‘ brains for information and advice. (But
don‘t confuse a sales pitch for advice.) Be very careful making your listing
category choice.

Do you want to position yourself as ―pizza‖ or ―restaurant‖ or ―carry-out?‖
Even if you have to stretch to afford it, go for the bold-type listing if you can afford
only a single line listing. If you can manage it, a display ad will probably pay big
dividends if you keep it running year after year. Use strong black borders if
possible and get the most size for the money without sacrificing placement. Don‘t
be afraid to use lots of copy and use pictures and colour (red is the usual
alternative) if the budget can handle it.
Try to give your business a solid, dependable, reliable feel in your ad. If
appropriate, say that you‘re insured or mention that you‘ve been in business a
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long time. List every service you can think of as well as your hours and put some
stress on your location so people can relate to it. The publisher‘s rep will give
your guidance and examples of what you can do, but try to get a little edge of
originality if at all possible.

1800 numbers
The cost of your own 1800 number may be less than you may think.
Competition has made this a handy bargain way for buyers to reach you
The calls can be forwarded to any line you choose. This might just be the most
bang for your advertising dollar --- to be able to publish an 1800 number in your
print ads.
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Local Print Ads
Classified ads and small display ads in local newspapers of magazines are a
good way to reach your buyers. Get media kits from all your local publications
(and any regional or national publications you may want to use as a model). Take
a look at what they have to offer and at what price.
 The media kit will give you the demographic and geographic reach of the
publication as well as rate information. Remember that the lowly classifieds are
perused by a huge number of people, especially on weekends. Big-time auto
dealers and real estate agents fill these pages up for a reason. If you slip a
classified ad into the right category and keep it running consistently, you‘ll
probably get a response strong enough to at least pay the cost of the ad.

The same rules apply to small display ads as to classifieds. Make it easy for your
prospective buyers to learn what you have to offer. Use a border to set your ad
apart if you can. Run the ad in the appropriate publication: do your homework,
read those media kits. Make it very easy for your buyer to respond to your offer
by giving a clear phone number, address and location details if space permits.

Another good way to reach customers is through your own newsletter. This can
be a blend of advertising and informational text that refreshes your logo and
identity and keeps you in touch with customers, without having to spend a mint
on outside print advertising. Just be sure to keep your image consistent,
wherever it is seen in print, and have it seen as frequently as you possibly can.

Signs and Displays
Signage is a key component of establishing and perpetuating your identity.
Billboards, blimps, searchlights, and skywriting are exotic and expensive, so
you‘d be better served by concentrating on more down-to-earth signs. Start with
your vehicles. Cars and trucks are great travelling billboards. You can readily find
a magnetic sign supplier who can fashion a flexible rubberised sign to attach to
your company truck of your personal car. When not in use for company business,
simply remove the sign.

Employee uniforms are another form of sign. Your logo and identity must carry
through all possible aspects of your business. T-shirts are great signs that even
your customers can wear.
Interior and exterior signs should be lighted to take advantage of every
opportunity to be seen.
Neon is becoming popular again, and creative things are being done in this

Reader boards, those signs using individual letters so you can change the
message at will, are very useful if well-positioned, lighted, and maintained.
Zoning ordinances often limit the use of reader boards. These signs can be
portable, on wheels, fixed to the ground in what is called ―monument‖ style of,
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most often, high up on a pole.
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Changing the message often and avoiding misspellings will enhance their effect
on your business.

Point-Of-Purchase Displays
The importance of POP displays cannot be overemphasised. Impulse buying
accounts for a huge amount of product sales.
Service businesses can also use some POP techniques, especially when going
to add-ons to a regular service such as ―wax my car as long as you‘re going to
keep it to change the oil‖ type of last minute decisions. But it‘s in the product
realm that POP is king.

Often it‘s manufacturers who pay the cost of POP advertising. Providing a retailer
with an attractive display is money well spent by any manufacturer if it entices a
retailer to feature the product and the consumer to purchase it on impulse.

POP can take the form of danglers, signs, posters, banners, custom display
racks, special lighting, or video monitors with promotional loops playing all day
Bounce back and register tape coupons (printed on the back of the cash register
receipt) are good to give at a POP location to stimulate customer‘s return to your
business in the future.

Higher-Cost Advertising Alternatives
If you get big enough to contemplate advertising in major newspapers of
magazines of on radio or television, form your own in-house ad agency and save
the usual 15 percent commission. This is as easy to do as printing up some
letterhead with a name like XYZ Advertising Agency. Have a separate checking
account if you‘re going to do a lot of this. This is standard procedure for medium-
sized businesses who handle their own ad buys. Of course, if you can afford it,
you can hire a professional ad agency and learn the ropes before plunging in on
your own. Sometimes the money they save you in good media buys may make
up for their commission. Look in your Yellow Pages and interview a few firms.
The ad business is a very people-centred vocation so find someone with the kind
of personality you‘ll be able to work with. They can also design and place
infomercials if your product or service lends itself to this type of advertising. And
don‘t forget the home shopping networks.

Electronic Marketing
Telemarketing comes in various disguises. We all gripe about the computer-
dialled boiler room selling operations that pester us at dinnertime, but there are
other ways of using the phone as a sales tool. For a small business, it might be
best to start calling people you‘ve been referred to by current clients or
networking contacts.
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Look at telephone contact as a way of giving out information or keeping in touch,
and avoid thinking of it as a way to close a sale. It gives you a chance for one-on-
one contact but carries a risk of being intrusive. Calling on former customers to
thank them for their business and inform them of new products of ideas you may
have is a good way to keep in touch with a pre-qualified client base.

Cyber Marketing
Is a new frontier. Although it‘s considered poor ―netiquette‖ to do any selling via
e-mail, there are increasingly more opportunities via home pages and bulletin
boards (BBS) to reach people or make it easy for them to reach you. This field is
changing so rapidly that the best resource for evaluating your possible use of
cyber marketing will be the many computer magazines on the market today as
will as the vast array of information on the Internet itself.

Direct Mail and Catalogues
Direct mail and catalogues are gaining enormous popularity. If you even hope to
get started in this
Arena, our advice is to start very small and narrow your niche to a needlepoint.
Whether you use direct mail promotions or develop your own catalogue, the
demographics of your mailing list (database) is the key to success.

There are other hazards of direct mail, beyond getting the right list and creating a
sharp, concise, attractive print piece. You have to maintain a flawless 1800-
number service with customer-centered operators who are your first line of
contact with your customers. Then you must make sure your delivery services
are prompt, your warehouse well stocked, your order pickers mistake-free, and
your merchandise return policies correct. On top of that, you must have truly
superlative inventory management.
To start with, you may want to consider using a fulfillment house. These
companies can take the calls, handle the customer credit process, and even ship
the product if you wish. The fee is stiff but might just be worth it until you build a
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Specialised Advertising Opportunities
Trade shows are essential to some types of wholesale and manufacturing
businesses. Display design, booth location and pre- as well as post-show
mailings are carried to high degrees of sophistication (and expense). A small
businessperson thinking of using this form of advertising would do well to contact
the trade or professional association for his or her industry.

Tie-ins with another business, Co-op ad reimbursements from suppliers whose
products you sell, and frequent buyer clubs are all becoming more prevalent in
the current advertising environment. One of the emerging trends these days is for
businesses to accept or even solicit the coupons of their competitors. Accepting
competitor coupons or meeting their discount offers is, when you think about it,
an excellent way to retain customers without having to mount an expensive ad
campaign to counter those of your competitors. Let them spend the money for
the four-colour freestanding inserts or the big display ad in the Sunday paper.

PR Program Execution
PR programs can often be created, managed, and executed completely by small
business personnel. Many PR programs are simple to create and do, unlike
advertising and some promotion events requiring outside experts to create,
produce, manage, and execute.

Creating an effective PR program for a small business follows the same
procedures as creating effective advertising and promotion programs:
       1. Build upon a solid business strategy
       2. Establish marketing objectives. For example, percent awareness
          among target buyers and end users over a specific period of time (eg.
          ―achieve 50 percent awareness of our new product line among key
          chain buyers by the end of year one).
       3. Establish a PR budget.
       4. Determine the PR message.
       5. Select PR channels and events:
                  press releases
                  speeches
                  public service of charitable activities
                  special events
                  company vehicles and other assets

Press Releases
Press releases, if you make them newsworthy, can lead not only to great free
publicity but to valuable reprints you can use in your ad efforts.

For example, a simple story (and perhaps product samples) about the company‘s
background, founders, and products can be written and sent to editors of local
newspaper, magazines, TV, and radio stations. If the subject is of sufficient
interest to editors, they may call to interview and run a free editorial story
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reaching thousands of millions of people.
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The best places for a small business to get free publicity are in the niche media
area -- school papers, shoppers, local cable channels, and local radio stations.

Research on names and addresses may be only as far away as the local
telephone book Yellow Pages. Or, a list of industry publications and electronic
media can be compiled from secondary date research or industry associations
and experts. Local, regional, and national news services may also be valuable.

Public Service Activities
Community involvement is a super way to good public relations and free publicity
of the best kind. The old saying ―you have to give to receive‖ holds true in

Sponsor a Little League or bowling of softball team. Your team will wear your
company signs, their families and friends will become your biggest boosters, and
you‘ll get to know a lot of people you‘d otherwise never be able to reach.

Donate your time and talent as well as your products or services when the
community could benefit from them. You will be repaid a hundred fold in the long
run. Participate in service clubs such as Rotary or Lions and the Chamber of
Commerce. Offer to be a speaker at schools or senior centres. Donate your
goods or services to local schools or churches, to be given away as raffle prizes
of silent auction items.

Appropriate non-profit public service events can be targeted for company tie-ins
(eg. An energy drink company sampling participants in an American Heart
Association bike, hike, run, walk event). Piggyback your business promotions on
community events --- such as having a ―marathon‖ sale if the town is having a
race day or offering to be a collection point for the food pantry charity drive.

Special Events
Grand openings (or re-openings) are always attention-getters as are anniversary
sales and seasonal promotions. A small business can host open house events
and invite key target buyers to explain and demonstrate products and services.
Set up an event calendar or diary for your business --- the kind with big squares
you can scribble in. Note all opportunities for events as the year progresses. Also
note when your customers may be having events. Then next year you‘ll be able
to refer to your calendar, call your customers in advance, and ask what you can
do to help them with their upcoming activity. This pre-emptive approach is very
effective, and all it takes is a few notes scribbled on a calendar. Watch your local
papers and church bulletins for events you didn‘t get to participate in this year but
will not want to miss selling to next year. Your non-customers will soon be
recruited as steady clients. It takes little time and costs nothing.
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Company Vehicles and Materials
Company materials may also be utilised to carry PR messages (eg. Stationery,
trucks, uniforms, etc.). It may be possible to combine both advertising and PR
messages on company materials. For example, beer and soft drink delivery
trucks are often painted with advertising (eg. ―Pepsi, the choice of a new
generation‖) and PR messages (eg. ―Support the fight against Muscular
Dystrophy in your local community‖).

Another good PR move is to make your business easily accessible to your
customers. That means clear, concise ads and listings, plenty of parking,
convenient hours, comfortable and clean surroundings, and customer service

Promotion Ideas
Once a small business has determined both its business positioning strategy and
the size of the promotional budget, specific promotional activities can be

Promotion programs provide direct purchase incentives in contrast to most
advertising, which provides reasons to buy your product instead of the competing

Admittedly, some types of promotions can be expensive, complicated, difficult to
execute, time-consuming, and difficult to administer legally. Many small
businesses are local or regional, so some types of promotional activities will be
too expensive or inappropriate for the type of goods and services offered. The
most important thing is to come up with a promotion that is unique and that sends
the right message about your business. And it is critical to monitor the
effectiveness of your promotions. If they don‘t generate results, they aren‘t worth
the time or money you‘ll spend.

Typical promotional activities:
    games and contests
    premiums and gifts
    coupons and rebates
    product or service demonstrations

Games and Contests
Mass marketers frequently run games and contests on a nationwide scale.
People look under bottle caps; collect game pieces, or submit entries in an effort
to win prizes. Most small businesses probably don‘t need (and can‘t afford) this
type of promotion.
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However, games and contests can be conducted on a smaller scale. For
example, many restaurants ask customers to leave a business card in a bowl.
Drawings are held periodically and winners are awarded a free meal or other
prize. The restaurant owners, not incidentally, get valuable information in
exchange for those prizes. The list of people who submit cards can be used to
solicit parties, meetings, etc.

If your business is in an area with a lot of foot traffic, putting a game of contest in
the window can draw additional customers into your store. It can be something
as simple as the old jellybeans in the jar contest. If possible, use the contest to
do double duty in addition to getting the contestant‘s name and address, ask for
information you need to better market your products or services. Be careful to
analyse the results, though. If none of the people drawn in the by the contest
become customers, you‘re wasting time and money.

Your promotions must be designed to get people to buy from you the market
research you can conduct is just a secondary benefit.
Whatever games you devise play fair with your customers. Don‘t charge them to
enter, and be sure to state how and when the winners will be selected, say that
the offer is void outside of a certain area and after a certain date, and that any
taxes are the responsibility of the winner. Ana be sure to check out the local laws
with your attorney before you start and contest, game, or drawing.

Premiums and Gifts
This is the old ―prize in the popcorn box‖ approach. A little something extra at no
extra charge. Premiums and gifts, sometimes called ―ad specialties,‖ have been
around a long time. The modem version of this free gift idea is aimed at name
awareness: magnets, calendars, luggage tags, T-shirts, pens, pencils, or coffee
mugs that carry your name, logo, and perhaps phone number or Internet
address. Anything that lasts and will be used by your prospective buyer can be
effective. You may give these tokens out directly or have a buyer send in the
proverbial ―box top‖ and receive the valuable merchandise … with your name all
over it!
For better or worse, there‘s already a wide variety of ―standard‖ promotional
items. Be aware of what‘s out there and be sure that your premium or gift is
different and better.

If at all possible, be sure there is a logical connection between the premium or
gift and your business. Free mugs that entitle the purchasers to reduced-cost
coffee are a good example of this. The key question, as it is for any promotional
activity, is whether the cost of the premiums or gifts will be recovered through
increased business. If all your customers dutifully wear their T-shirts with your
logo, will you gain new customers? Monitoring results can be as easy as asking
new customers how they heard about your business. If 99 percent tell you that
they saw your ad in the Yellow Pages, you can be relatively confident that the
premiums aren‘t doing what you hoped.
A note of caution: be sure whatever you five away isn‘t potentially harmful if, for
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example, swallowed by your customer‘s dog or child.
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Coupons and Rebates
Many small businesses use coupons as part of their promotional programs. The
more common ones entitle the bearer to some benefit, such as a price reduction
on a particular product or service. Others reward frequent customers for their
loyalty. For example, a coffee shop may five each of its customers a card that is
punched when a kilo of coffee is purchased. When the card is completely
punched (perhaps after 10 or 12 pounds), the customer gets a free pound. Be
sure that your pricing supports the cost of this type of promotion.

Don‘t forget that only a small percentage of coupons are actually used.
Newspaper coupon redemption rates in the grocery, drug, and mass
merchandise industry average between 1 percent and 5 percent. Redemption
rates for other coupon delivery methods (eg. Mail, magazine, newspaper four-
colour inserts) vary widely, but still amount to less than 10 percent for most

Coupons attached to the product itself are the ones that are most likely to be
used, with redemption rates of 20 to 50 percent. However, these coupons tend to
be redeemed by existing customers, so if your intent in distributing coupons is to
get new customers, find another way to get them to your targeted audience. One
good thing about coupons is that it‘s easy to monitor the results: you‘ll see every
one that comes in.

A coupon should be good for at least 10 percent off the retail price of the product
to attract buyers‘ attention and increase sales, with a 25 percent discount off
retail considered more effective for mass-market disposable consumer goods.

Coupons come in many forms, but the one thing they must have in common is an
expiration date! If you forget this, you’ll live to regret it.
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Are often more expensive per sampled target buyer when compared to
advertising costs per target reached. However, demonstrations are many times
more effective than single advertising ad exposures in any media. According to
recent studies, because of sampling, 51 percent of shoppers tried products they
normally would not have tried. And 79 percent of those sampled bought the
product when they felt they needed it.

Demonstrations should be conducted at point-of-purchase whenever possible to
maximise the opportunity for a buyer or end user to purchase immediately. It is
estimated that over 85 percent of all grocery purchases are not planned in

Buyers purchase many items on impulse because of a product of service
demonstration. Go to your local supermarket at noon on a Saturday and observe
(and enjoy) the moveable feasts the product demonstrator‘s offer.
AA promotion demonstration often takes the form of a free product sample or
free trial service. Demonstration personnel also act as a mini-sales force in
explaining product features and benefits and providing personal consumption
and use testimony.

A small business is well served to arrange as many promotion demonstrations
and sampling opportunities as affordable on a continuous basis to build business.
Demonstrations are particularly valuable as an effective (and often, low-cost) way
to introduce new products and new services.
Also, demonstrations of products and services are the foundation for potentially
free, word-of mouth advertising, the most effective form of advertising known.

Show and Tell!
Demos come in many forms including open houses (to show off your new
facilities), trade shows, local fairs, taste tests, test drives, and seminars. Product
demos are very effective but service demos are sensational.
The popularity of seminars is growing, as they are effective in enabling service
providers such as financial planners, physicians, and dealers in art and antique
items to target and educate their potential customers.

While you will generally want to reach your target audience when you conduct
seminars, you can also use them to build your business‘s community image. For
example, a good place to try out your seminar might be at a senior centre. Every
community has one and they are often looking for program presenters. You don‘t
want to put on a blatant commercial --- just an informative, generic talk will win
friends and influence people. The residents of the centre may not be your target
audience, but if you favourably impress them, others in the community will hear
about it.
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Writing a Good Advertisement
Make it easy to recognise: Your ad should be consistent with all other artwork
and the image of your business. A distinctive logo or certain typeface used all the
time creates a consistency with your ad.

Use a simple layout: a classic ad layout follows a ―Z‖ pattern. The layout pulls the
readers‘ attention from the headline to the illustration, to the explanation, through
the details and finally to the information of where to find you and when you are

Use a dominant element: This could be the headline of a photo of drawing. This
part must attract away from the news and focus on the message.

Express a benefit: The product/service needs to fulfill the customer needs.
Clients love value for money, make your ad an attention getter, interest
creator, desirable and promote action.

Make use of white space: Don‘t cram information into every space. The more
white space the easier the ad is to absorb, the easier to read and the easier to

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