Are last-minute cancellations at an all-time high in your salon? You’re not alone. Here’s how a deposit policy can help protect your revenue during these topsy-turvy times.
As we enter year three of the pandemic (but who’s counting?) it’s become clear that the business impacts of Covid aren’t going away, they’re just changing.
While Covid rules and restrictions might have eased, case numbers are still high. Plus, this year the flu is back with a vengeance, which has meant that the number of last-minute cancellations from clients experiencing flu-like symptoms has skyrocketed.
There are steps you can take to safeguard your revenue – and the most effective step is to request a deposit on booking. Timely research shows that businesses that take a deposit reduce their no-show rate by 55 per cent.
Why are deposits so effective? By asking a client to put down a deposit on booking (somewhere between 10 and 70 per cent of the total price) you’re protecting your cash flow in case they don’t show up. The prospect of losing a deposit also acts as a deterrent for clients who are having last-minute second thoughts.
Ready to start taking deposits? Here’s what to do next:
1. Double down on the detail. Do you want to implement a flat fee deposit, a percentage per service or a combination of both? And what do you consider a reasonable time frame for a client to cancel or rebook an appointment (i.e. 8, 24, 48, 72 hours)? How much would you charge per late cancellation?
2. Communicate, communicate, communicate. Whether you’re implementing a deposit policy for the first time or updating an old one, you’ll need to let your regulars know that your process has changed. While there will be a transition period at first, your clients will get used to your salon’s new policy.
3. Set yourself up for success using Timely. Timely-powered businesses have complete control over how they take deposits. They can choose which services require deposits, set flat booking fees, charge a percentage or require full payment upfront. They can even ask clients to save cards securely into their Timely account. The client will be prompted to make a payment to secure their appointment, then they’ll pay any outstanding balance on the day of their service.
We could have never predicted how the Covid pandemic would continue to impact beauty businesses in 2022. However, what we do know is that technology can help us weather the storm. Is it time to revisit the deposit policy for your business?