Cancellations are the bug bear of salon owners and mobile technicians the world over. Ask any beauty professional what annoys them most about their business and you can bet late cancellations is the number one answer.
And yet as an industry little has been done to understand cancellations and how to manage them.
"Out of pocket by £12,000 a year"
To really understand how your business can manage cancellations you need to know what the actual impact on your business is.Knowing the impact will help you to decide on your cancellation management plan.
For instance do you know how much cancellations cost your business per month or per year? If you don’t then as a business owner this is crucial information for you.
The best way to work it out is to review your average number of cancellations or no shows per week. Then work out the average cost of a service in your salon.
For example let’s assume you have on average 5 cancellations per week and the average service cost was £50. £50 x 5 =£250 per week lost to your salon !! over the course of a month that £1,000 in lost revenue -leaving you out of pocket by £12,000 a year. That has serious impact on your business way beyond just the annoyance factor.
"Who cancels? Can you establish a pattern? ......"
Have you reviewed patterns of behaviour around cancellations among your customers?
What do cancellations look like in your business? This is really important information for you to know and to be monitoring – knowing this intel will really help you to tailor a cancellations management plan that works for your particular business.
Who cancels? Can you establish a pattern? Is it established customers?Is it random? Are there certain appointment slots that are cancelled more than others? Can you see a pattern of certain staff members being cancelled (it’s always worth reviewing staff with low cancel rates- is there something to learn from them?)
Establishing trends and patterns in your business can really help you to understand the best ways to reduce those cancellations and reduce the revenue loss to your business.
I would suggest you run through this list and see what it tells you:
1. Who is cancelling (certain customers, new customers?)
2. Is there a trend around appointment times (9am slot?)
3. Is there a trend around appointment day?
4. Can you identify a staff member who seems to have a higher than average rate of cancellations?
5. Do certain treatments have a higher cancellation rate than others?
"Loyalty card, regular discounts, money off products......"
Do you know who your “good” customers are? Those customers who are loyal to your business, show up on time and never cancel.
Knowing who these customers are is important because you want to have a business full of them and you want that behaviour to be mirrored across your customer base.
How do you treat these customers? Do you respect their time?If they always show up on time – do you show up on time for them? (can someone finish off your late client so that you are on time for treating your “good”customer for example)
Do you “reward” your “good” customer – loyalty card, regular discounts, money off products, invites to salon events etc. Take a moment to think about how you acknowledge your “good “customers.
"Its important to have staff onboard and contributing........"
Your staff are one of the most often overlooked areas in managing cancellations. Do they know/understand the business cancellation impact on your business, do they understand their role in managing it? Have you done any training or updates on what it looks like for your business?
In creating a cancellation management plan its important to have staff onboard and contributing, they see/talk to customers all day long and therefore they are your most important asset- make sure they reflect your business and understand what you're trying to achieve and how they contribute.
"How much you can spend on things such as text messaging, reminder calls et........"
So what exactly is a cancellation management plan? This is a means of describing how your business will manage cancellations. Its particular to your business and its tailored according to some of the information you have collated above about your business and its cancellations.
Top tips for managing cancellations
1. Customer reminders (Reminder call, text)
2. Cancellation policy
3. Reward “good” customers
5. On line booking
Have you established how much money your business is losing from cancellations- good you now know your budget for implementing your plan. This tells you how much you can spend on things such as text messaging, reminder calls etc.
A cancellation policy for instance needs cascaded to customers , so how will you do this? and what is the cost?
Customer rewards in the form of discounts etc require funding- this can come from your cancellation pot.
How will you take deposits and how will you let customers know you are doing this?- again there is a cost attached.
If you don’t already have an online booking facility – how can this support your business and what are the cost implications?
"How effective your efforts have been........"
As with any initiative it’s important to review how effective your efforts have been- what initiatives did you undertake- what was the time and financial cost of that implementation and what was the result in reducing cancellations?
Know the cost of cancellations to your business
Be aware of cancellation trends and address those
Know your “good” customers
Get your staff on board
Create a cancellation management plan
Review your initiates v cancellation numbers