By Rick Riddle

Human behavior doesn’t vary much. This is why marketers have been using psychology as a tool for getting customers on board, creating loyalty, and ultimately making sales.

To see this in action, all you have to do is pay attention to print ads, TV commercials, even billboards. You’ll quickly see evidence that the principles of psychology are being applied. Marketers use psychology because it works.

You can also apply these techniques to your social media marketing efforts. All it takes is finding the right tricks to use. Here are seven to get you started:

1. Give Them Gifts

Give your audience gifts, and they will feel obligated to reciprocate. Think about that. If you’re given a gift, aren’t the first two thoughts that come into your mind, (1) Say thank you, and (2) I have to do something for this person in return.

The gifts that you offer don’t need to be extravagant or expensive either. Here are a few examples of attractive gifts that are easy to give and will encourage your audience to convert:

• A discount on a first order in return for subscribing to an email list
• A 14-day extension on a trial offer in return for liking and sharing a social media post
• An inexpensive gift item included in an order
• A free e-book or white paper for scheduling a sales call
• Access to content via email before that content is released on social media for joining an email list

2. Build Trust With an Appealing Profile Photo

Yes, looks do matter. You already know that it’s important to have an appealing profile photo, but do you know what that entails? In general, people are attracted to smiling faces as opposed to serious faces. They also prefer a background that is a bit darker.

Obviously, if you are the representative of your brand, your profile photo should be a picture of you. However, if you tend to stay behind the scenes, and you are a man, you might consider using a photo of a female employee or representative. Pictures of women’s faces tend to create feelings of choice.

3. Don’t Give People Too Many Choices

If you give people too many choices, they can become overwhelmed. Decision-making is a stressful process and that can have a negative impact on a person’s mood; the result can be that your potential customer bounces before they make a purchase.

Instead, create a limited number of options that you offer to your customers. In fact, there may be cases where offering only a single choice is the best thing to do.

4. Become an Expert

Before consumers make purchases, they seek out the advice and opinions of people they feel they can trust. This might mean going to review websites to read people’s opinions about the products and services; it might also mean going to consumer advocacy websites to find research and studies that have been conducted. It can be frustrating to see potential customers going to other sources for information and opinions about your products and services, rather than listening to what you have to say.

Fortunately, you can combat this. You just have to do the work required to get your audience to see you as an expert in your industry as opposed to a salesperson hawking your products. This is something that you can accomplish by posting lots of thought leadership content, how-to posts, and other content that positions you as an expert in your niche.

5. Add Emotion to the Equation

Odds are, if you log into Facebook today, you will see at least one video or meme that tugs at your heartstrings or that makes you feel passionate about something. This is because touching, emotional content has an impact. It’s engaging, and people tend to like and share these kinds of posts.

Does this mean that sharing the latest story of triumph over adversity will ensure that you increase your website traffic or that sales will go up? No, it doesn’t. However, what it should do is make it clear the importance of making an emotional impact with your content.

6. Be a Regular Presence

Become familiar to your audience and you will become more attractive and more trustworthy. The movie Rudy is widely regarded as one of the most inspirational films of all times. Rudy was a young man who dreamed of playing football at Notre Dame. Unfortunately, he wasn’t particularly well suited for playing college football, but he kept showing up. He was at games, he was at practices, and eventually he earned the respect of coaches and players, and was put in the game.

Rudy became present, then he became familiar; after that, he became respected. You can do the same thing with your audience by producing great content on a consistent basis.

7. Make Social Media Users Feel as if They Belong

Social media marketing is all about building relationships. Your goal is to create an online social circle that encompasses all of the social media platforms that you use, to get people to want to become a part of that circle, and then make them feel valued when they arrive.

This begins with simple steps such as shooting someone a message thanking them when they follow you on Twitter or responding to comments on Facebook. You can even take this a step further by seeking out followers who are giving you a lot of engagement, and reaching out to them by liking and sharing their content. Not only can this trick boost brand loyalty, you might even manage to create a brand ambassador or two.

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By Tom Mucha

Growth is on the agenda of most businesses; it is also one of the primary reasons why companies look for external financing. Yet according to research from the National Center for the Middle Market and the Milken Institute, less than one-third of all small and mid-size companies are aware of nontraditional sources other than private equity (PE).

This lack of awareness can lead to a growth struggle if banks are not willing to provide enough capital and existing shareholders don’t want to part with their control of the business. This is a situation which calls for a solution that is neither purely debt, nor purely equity capital. A hybrid of these is needed and mezzanine financing is exactly the tool that is fit for the job.

What Is Mezzanine Financing?

Similar to a mezzanine floor being located on an intermediate level between two main floors of a building, mezzanine capital sits on a company’s balance sheet between debt (bank loans) and equity (shareholder capital). It is subordinate to bank loans, thus not increasing the cost of already existing bank financing.

Typically, mezzanine loans have interest-free and/or amortization-free periods that are scheduled to match the expected cash flows of a company. This keeps the loan from being an excessive burden to the business, and also allows a company to use the available cash to realize its growth plans.

Once the growth objectives of the business have been reached, it is time to compensate mezzanine lenders for the flexible capital they have provided. At that point in time, businesses typically choose one of two options: either continue with the mezzanine loan until it is fully repaid at maturity, or make an early repayment, which relies on newly available and cheaper bank financing. In either case, the mezzanine lender usually receives compensation consisting of two components:

• Interest earned on top of the initial capital provided, and
• An equity kicker–or a bonus, which is linked to the increase in company’s value. The rules for calculating this bonus are defined in the loan contract.

Given that mezzanine funding is still a form of bespoke loan with some equity capital features, it is suitable for companies that can predict their cash flows with relatively good confidence. Mezzanine capital, therefore, is more commonly used by companies with established track records that want to grow and expand.

While there are other applications for mezzanine capital, such as financing shareholder transitions or restructuring debt, here will will focus on financing growth.

Growth Strategies That Can Be Financed

Since mezzanine financing is always tailor-made for the needs of a specific company, it is very flexible in terms of growth paths that it can finance. Broadly speaking, there are two categories of growth strategies that are often financed with this type of capital. These are organic growth and growth through acquisitions.

Organic growth activities that are typically considered good fit for mezzanine financing include:

• Expansion capital expenditures (capex) or, in other words, purchase of capital equipment, such as new machinery or facilities.
• Geographic diversification or expansion of the current operations to new regions.
• Product development; typically a company would need to be able to demonstrate more mature business from the start.

Inorganic growth strategies often include:

• Market share increase through the acquisition of competitors.
• Acquisition of a complementary product or service company to further foster the stability and/or profitability of the current business.
• Geographic expansion through the acquisition of companies in the same business, but in different regions.
• Business diversification, but only if it is justified both strategically and financially.

How to Obtain Mezzanine Financing

Obtaining mezzanine financing is not very different from getting any other type of brand-new financing; it requires preparation, planning, and hard work.

The first step is to clearly identify the company’s financing need. This means that you would need to create a complete financial model of your company. The model (the industry standard is to use Excel) should include income statement, balance sheet, and a cash flow statement. In addition, you will need to create monthly forecasts–and not just year-end figures. Forecasts should be achievable and realistic.

In parallel with the financing model you will need to prepare a concise company presentation. It should typically include 10 to 15 slides and cover the following topics:

• Title or cover slide
• Company background and history
• Business model
• Key competitive/strategic advantage(s)
• Sources of business stability and downside protection
• Market overview
• Management team
• Funding history & shareholders
• Current funding needs
• Long-term plans for the company

The next step is to approach a mezzanine firm. It can be done directly or with the help of an investment bank or other corporate finance advisor. In any case, it typically takes some time, market research, and work to identify the right mezzanine financing providers for your business. You can ask for referrals from your CPA or relationship bank; there are also free resources on the internet, such as the Directory of SBIC Licensees.

Most companies, after making contact with lenders and receiving initial offers, end up with very few that they want to move forward with. A good approach is to negotiate term sheets with a maximum of two to three lenders to keep the workload manageable.

Most companies will sign with only one lender. After you’ve completed the due diligence phase, you will just need to finalize the legal documentation before closing the transaction. It’s worth keeping in mind that the better organized and prepared you are will result in the deal closing more smoothly and quickly.

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