How can I protect my business from no-shows and late cancellations?
Timely industry expert, Jessica Crane, International Award winning salon business coach and published author:
It’s more important than ever to protect your business from no-shows and late cancellations, and make sure your booked appointments turn into revenue. No-shows can cost you thousands in lost revenue each year; a significant hit to your business that can be avoided by implementing some easy revenue protection features. Timely has created a comprehensive Revenue Protection Guide to help you understand how it can help your business, what your options are, and how to implement it.
HOW REVENUE PROTECTION WORKS
Basically, revenue protection means that you’ll be taking steps to ensure your revenue is safeguarded, kind of like an insurance policy, but for your revenue! You’ll be introducing a revenue protection policy to your business which will outline the terms and conditions around appointment no-shows and cancellations, and you’ll use revenue protection features (like deposits or cancellation fees) to implement your policy.
HOW IT CAN HELP YOUR BUSINESS
I hear time and time again from salon owners that no-shows and last minute cancellations are their biggest challenge. We’re a service based industry meaning we trade time & expertise for money, so we need to protect that time. Clients are far more likely to attend an appointment if they’ve paid a deposit in advance or know that there’s a cancellation fee, which is a great way for you to get a tangible commitment from clients to ensure you’re not out of pocket if they cancel.
REVENUE PROTECTION OPTIONS
I find deposits or cancellation fees to be the most effective ways of protecting your revenue. Deposits are great because your clients will pay a portion of the cost of their service when they make their booking (I think a 50% deposit is appropriate, but it’s a personal choice). This means they pay a little less on the day, so they’re more likely to spend on products or add-ons, and if they don’t show up, you can keep the deposit. Cancellation fees are also a good insurance policy, because clients will need to agree to your cancellation policy when they book with you. If they don’t show up to their appointment, you can charge them for that lost time.
GETTING STARTED WITH REVENUE PROTECTION
- Write your revenue protection policy
- Get your team members on board
- Discuss when you’ll charge clients
- Practice what you’ll say to clients
- Let your clients know
You might have a few clients who get upset or have concerns, but in my experience, no loyal, valuable clients will leave because of a revenue protection policy, especially if you’ve communicated your reasoning with them in advance. This may feel like a huge change, but in no time at all you’ll wonder how you ever operated without a revenue protection policy!
To read the full Revenue Protection Guide click here