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Why are cancellations such a talked about topic in the beauty industry? Well, essentially it comes down to lack of boundaries! People are so scared to enforce their policies… because what if they lose the client?! What if they do take the deposit or they do take the booking fee (depending on the wording that you want to use, will get into that in a minute) and what if that client is like I’m never coming back again?! So I think a really good place to start is by saying, if that's the case, if the client doesn't come back again, if the client treats you in such a way, then they're not your client! They are not your ideal target market! Our target market doesn't fight with us, our target market goes ‘Oh my goodness, I'm going to be late, I'm not going to make it, I’m going to waive my booking fee’, they will respect your time!
We essentially have to teach people how to treat us and that is what our policies, procedures and boundaries are for. Why create a policy if you're just not going to stick to it? You may as well say to people ‘look here’s a piece of paper, but just throw it in the bin and don’t read it, because essentially I'm never going to respect my boundaries, so you don't need to respect them either’. Ouch, right! But is the absolute truth.
I do implore you to ensure that you have policies in place and you guessed it, to take a booking fee! Now all of this stuff that you see in the forums about not saying it's a deposit because a deposit means it's refundable, is actually correct! I know, one for the forums! So essentially you are going to call it a booking fee and around that booking fee you have your terms and conditions. So you're saying OK I need X amount of time for cancellation, I am going to take this percentage of your booking in order to cover my expenses for the time that I'm allocating to you. Now here's the question I get all the time… ‘Kimberly, how much do I take?’ Well, how longs a bloody piece of string? My suggestion is that you cover your expenses for the time. So for someone who has a salon at home, it might just be their wages. For someone in a rented fit out salon, they might need to make that higher. Generally speaking, it works out to be about 50% of the booking time. It really is going to come down to your own personal expenses and how you've essentially set up your business. Make sure you're at minimum covering the wages that it's going to cost you for the loss of that appointment. Now this is obviously only if they break the boundaries of the policy. What I do suggest, I see a lot of people being like ‘well I'm just taking it, too bad so sad it was within 48, 28, 24 hours’… I always suggest putting it up as you know, we had a cancellation and if you can fill it, don't charge them. You don't need to be greedy if you can fill it. And then the client doesn't get that charge. But say to the client ‘I will do everything in my power to fill it, but if I can't, I will have to charge the cancellation policy’. Another big thing that I say in regards to this particular cancellation policy is people saying ‘oh I've got their credit card on file, but then when I tried to take it they just like cancel their card’. This is why it's so important to physically get the money at the time of booking, because I can actually call my bank and say cancel the card or transfer all the money out of the account. Which yeah, this has happened to me before, I'm human and I've made these mistakes too! Make sure when someone puts down a booking fee, you have the booking fee and it is 100% in your hands.
The final thing I want to say around the particular booking fee is, don't think I won't do it with my regulars because they only won't cancel, until they do. I see this time and time again, that people are like ‘oh she was a regular, I didn't take a booking fee because you know she always shows up for her eyelash extensions’… of course they always show up, until they don't! Then it's that one time that you end up missing out and they may come back, or they may never come back because there’s a sense of shame around the fact that they cancelled on you and didn't pay a cancellation fee.
Having tangible money means that you are protected from all of that. It's as simple as if they want to rebook, they have to pay again creating respect and boundaries around your business. It is going to increase your profit and reduce your cancellations. Yes, you heard that right! Increase profit, reduce cancellations. Create your policies and stand by them! But don't just stand by them, when bad things happen really make sure your clients know what your cancellation policies are, but not in an aggressive kind of way. In a way that you're really highlighting it for them, that you're sort of sitting them down and explaining it and just gently always reminding them; ‘you know if you want to reschedule, that's absolutely fine, but remember I do it need 48 hours notice’. I personally like 48 hours because I found 24 hours was not enough time to fill the spot and I was left scrambling. So 48 hours gave me plenty of time to try and fill that spot and advertise adequately.
Now if we have any beginners here, you might be asking ‘what's the big deal if you get one or two cancellations?’… Well the big deal is, if even one client per week at $100 was to cancel their appointment, it is $5200 a year! And that is your income! That is your wage gone! Bills cant be paid… if you have multiple cancellations, then yes it is going to present a massive problem within your business. You are going to be like holysh!t, how am I going to survive?
We have seen so many cancellations recently because of the Super flu, because of COVID, because if anyone even has a slightest tingling in their throat, they're like no I better cancel. I really want you to change your mindset around people who cancelled due to illness at the moment, rather than cancelling or not showing up and never coming back. Someone who cancels due to sickness at the moment is not leaving you. In the moment at that particular time you’re like oh the money! But the money has just been put on hold. They’re not leaving you! It is not something that you need to absolutely have a breakdown over and start freaking that your whole business is going to shut. That person is sick, they are still loyal to you and they will come back. The concern needs to be around no shows, it needs to be around people who constantly show up late, who don't respect your policies and procedures, and the people who just cancel for no reason. Generally it's not for no reason and we can learn a lot about that. If they’ve been coming to you for a little bit and suddenly they drop off, maybe they couldn't afford it, maybe they didn't like the lashes, maybe they were having retention issues. There are so many lessons to be learned when you actually delve into why a client hasn't come back. And yes, you absolutely should reach out to them, ask them if their eyelash extensions or whatever treatment they had was OK, ask them if they would like to re-book an appointment. When we see people drop off our booking system and we don't reach out to them, that is a potential loss of around two and a half thousand a year, maybe more depending on your salon. It is worth putting in the time and effort to follow them up.
Now, there are times of the year where we go quiet in general. When the seasons change, when we go from hot to cold, people just want to sit in front of the heater or the fire and do nothing. But in the warmer months, we're really lucky here in Australia, because when the weather starts to get warm, it's about Christmas time. We have spring racing and we have so many incredible events that really push clients to come to us. But in winter when it's the middle of the year and everyone's getting sick and there's no events on for people to really push themselves to continue to come to you, well that's where we begin to see the quiet times.
I want to say to you guys, stop thinking every year that it’s a new thing that happens, it's not! It happens every year, every single year people begin to cancel around May. May and June tend to be a little quieter, but sometimes the end of financial year can actually help. I see so many people getting in the forums and reaching out being like ‘Oh my God is anyone else quiet’, like it's some new epiphany that's come along. The beauty industry has always been quiet or quieter at this time of year, sickness is normal at this time of year.
So what do we do to counteract that? Well we have to make sure we're marketing ourselves correctly each and every time we see our clients, but we also need to prepare! If you know Christmas is batsh!t crazy and you can make so much more money, but then May and June are a bit quieter, why aren't we preparing to leverage when we can? And then being aware of the quiet times and creating strategies so that we can be busier in those quiet times. Upselling to clients, maybe creating some special deals. This is where we have to put our business brains on and think ahead and stop working in the now. Working in the now doesn't help you in the future. Working in the now for the future is where it is at. So start preparing your years, start thinking about next year and what that looks like at this same time. What can you do to ensure that you don't have the sudden drop off again. Maybe it's really keeping your clients on board over that peak period of summer and being like, you have to keep booking, you have to keep booking, and really keeping that excitement and demand around you all year long. And not getting to the when it starts to get cold and yourself feeling like ughhhh, everyone is going to drop off now. You know what that mindset will get you, nothing! Absolutely nothing! You have to keep an abundant mindset, you have to keep that demand around yourself and don't let cancellations, particularly people who are sick but you know plan on coming back to you get you down. If you’re looking at your system like I'm not fully booked, holy crap that is a problem!
You shouldn't be basing your pricing on being 100% booked, because there is no salon who can maintain 100% booking, 100% of the time. Why is that? Because people get sick, people breakdown, life happens, humanity happens, sh!t happens! There is no business that can future proof itself against that. In order to do that, you have to instead work at getting your pricing to a point that you don't need to be fully booked in order to make your dream income. Then if you do get to fully booked or 90-100% booked, you're living your best life. Because you are making above and beyond what you wanted.
It really frustrates me when I see salons who are booking themselves at 100%, and if they've not at 100% continuously, then they're not making enough money. That just screams to me that you need to do our masterclass! It's really important that you are not putting yourself in a position where you're freaking out by one cancellation. One cancellation should not scare you, 2-3 cancellations shouldn't scare you. You need to be at a point where you have at least worked your pricing around being 80% booked, that is the key!
Whether you're fully booked, but you could be earning more or that you just have absolutely no freaking idea where to start, looking at your competitors prices and judging your prices based off there's… trust me it's not the right place to start. It is only going to land you in hot water if wondering why you're not making money.
I constantly see this problem in our industry that people just run at a loss and they're like oh but I can't charge that…. of course you can charge that! Your bottom line is your non-negotiable! If you negotiate on your hourly rate, you're actually negotiating on your wages. Would you walk into someone's work and be like look I know that you're earning $40 an hour, but for the next hour could you just, I don't know like earn 20 for me?! You absolutely would not!
So planning for profit is all about how to plan, project and set goals for your business. It goes into so much detail that you will no longer have those questions about how to run your business and how to set up the admin background work.
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