Dealing with cancellations and no-shows is one of the most frustrating parts of running a small business. Every company has to do it. But its pervasiveness doesn’t make it any less frustrating.
If you’re responsible for an appointment-based business, you will have to deal with forgetful, disorganized, unwell, and unavailable customers. There’s no way of getting around this simple fact. The global cancellation rate for hotels, for example, is around 40%. That’s four out of every ten bookings cancelled before the guest arrives. And you thought you had it bad?
While cancellations aren’t under your control, how you minimize and respond to them is. Most small businesses have woefully inadequate processes in place to deal with disruptions. But by implementing a few straightforward tips, you can likely cut losses significantly.
In this post, we’re going to look at six ways you can deal effectively with appointment changes, cancellations, and straight-up no-shows.
1. Encourage Clients to Book Online
If you’re still using a manual booking system, requiring customers to ring up to make appointments, then you’re potentially wasting hours of time every week.
Ditch the leather-bound appointment book and opt instead for online scheduling software that’s designed for small companies.
Good scheduling software has a multitude of features. One of the most important from a loss-reduction perspective is the online booking portal through which customers can check, schedule, reschedule and even cancel appointments without any involvement on your part, other than setting initial availability.
This makes it much easier for customers to cancel appointments in advance, and whenever changes are made, your calendar will automatically update. [Gr]
2. Send Regular Notifications Across Multiple Channels
Studies show that notifications improve attendance in a variety of settings. You should send notifications reminding customers of their upcoming appointments and also provide a link to reschedule or cancel.
Companies need to tread a fine line between too few and too many notifications. If you don’t send any alerts, or if they simply get lost in the mountains of other alerts that customers have to contend with, then you won’t see any benefits. On the other hand, if you send too many, there’s a serious chance that recipients will disable push notifications and unsubscribe from your email list.
Studies seem to indicate that around one push or SMS notification per week is the ideal amount. You may also wish to supplement mobile notifications with emails.
3. Disincentivize No-Shows
There are two main ways you can disincentivize no-shows: by asking for a non-refundable deposit and by collecting full payment at booking.
Cancellation policies are tricky things. While they can limit your losses in cases of disruption, they can also alienate customers. The key here is clarity. Ensure that customers understand the terms of the cancellation or non-attendance policy when they make a payment. You may also wish to discreetly waive non-refundable deposits if appointments are filled at a later date.
Asking for full payment at booking also acts as a disincentive for customers to cancel appointments on the basis that they don’t want to go through the rigmarole of asking for a refund.
4. Consider an Overbooking Strategy (but Be Careful)
Overbooking is more common in certain sectors than others. Hotels, for example, will often offer rooms above capacity due to the high risk of cancellations, especially at peak times.
There’s no doubt that overselling can be an effective strategy, but it’s also a risky one. If you’re going to go down the route of overbooking, you need to base your strategy on historical data and ensure that you have a backup plan if things don’t turn out as expected.
Overbooking without a considered plan can result in unhappy customers and negative reviews. You’ll also likely have to cover any costs for an alternative stay and refund the original amount.
5. Offer Discounts for Last Minute Bookings
So you’ve had some cancellations and you need to sell available slots quickly? Fear not. A whole host of third-party sites and apps can help you connect with “last-minute” customers.
Platforms like Lastminute.com, Kayak, Expedia, and others can be used to market a whole range of services, from hotel rooms to haircuts. And even if there isn’t a third-party marketplace for what you offer, it’s always possible to pitch discounts for short-notice bookings to your current customer base, which highlights the importance of maintaining a working mailing list.
6. Don’t Forget Your Insurance
If there’s one thing that the coronavirus crisis has highlighted, it’s the need for business preparedness. Unexpected local, national, and international emergencies may lead to a surge in cancellations over a relatively short period.
While these events are unlikely, it’s important to ensure that you have a safety net in case the worst does happen. In the UK, for example, one quarter of small businesses are not protected against a crisis. With the looming threats of climate change and possible future pandemics, failure to purchase insurance is a potentially business-ending mistake.
Business insurance for crises is usually inexpensive, making it an absolute no-brainer from a loss-reduction perspective.
For most small businesses, cancellations and no-shows are just an inconvenient fact of life. But you don’t need to resign yourself to lost revenue.
Straightforward changes, like implementing a non-refundable deposit policy and offering services for discounted prices on third-party sites, can help you limit the amount you lose.
What’s more, automation tools like appointment schedulers can help you dramatically cut down on the time required to process cancellations and notifications.
Lots of small changes can yield large returns, so that you can worry about cancellations just a little bit less.