Hair & Beauty salons are losing hundreds of millions of dollars a year because of no-shows, and the lack of deposit-taking policies for fear of upsetting clients.
In a new survey conducted by Worldwide Salon Marketing, the vast majority of 130 salon owners questioned revealed they had no policy of taking deposits to secure appointments, and even it they did have a cancellation policy in place, it lacked ‘teeth’.
According to WSM founder & CEO Greg Milner, the results are a wake-up call to the industry. “If salons want to be taken seriously by their clients and stop hemorrhaging money, they have to take the lead from industries like travel, hospitality and entertainment, which simply refuse to take bookings without payment,” he says. “Customers accept those policies completely. Try booking a concert ticket and telling them you’ll pay when you get there. It just doesn’t happen.”
The survey of 125 salons reveals
- 88% do not take deposits.
- The average annual loss through no-shows is a whopping $10,000 per salon, with one salon reporting a staggering $52,000 – even though fully 80% of salons claimed they sent appointment reminders by text message.
- Extrapolated across Australia’s approx. 25,000 hair & beauty businesses, the losses represent $250 million annually.
- Of the 12% of salons who insist on deposits for appointments, the average annual losses dropped to less than $2,000
- Asked ‘How many times must a client ‘no-show’ before you no longer take bookings from them?’, 31.5% said three times, while another 32% said “I always let them book another appointment because I’m too scared to lose the potential business.”
It appears the industry is beset by fear. According to one respondent,
“We do have a cancellation policy, but rarely enforce payment, as so few other beauty clinics do so. Clients will not come back.”
And this from a salon in Melbourne:
“I would like to put a cancellation thing in place but I don’t have credit card facility nor any way of safely storing peoples numbers. And yip I am scared of scaring people away.”
But that fear appears largely unfounded. Said another salon owner,
“We started taking credit cards or a cash deposit on February 1st this year, for the first time. It works a charm, no more no shows, the clients now know we’re serious.”
The survey shows that among those salons which insist on deposits or pre-payments, the rate of no-shows drops dramatically across the board. “It also positions the salon as a business to be respected,” says Mr Milner. “It’s just plain rude to book a one or two-hour appointment and simply not turn up. You wouldn’t dare do that to your doctor or dentist because you respect them too much. It’s about time hair & beauty professionals swallowed a small teaspoon of cement, and hardened up,” he said.
Those who have ‘hardened up’ and imposed a strict cancellation policy backed up with deposits report dramatically-improved results.
“We’ve had a 100% Cancellation Policy in place for almost 6 years. It has virtually eliminated no-shows and forces clients to respect our business. EVERYONE in this industry should do the same – it will educate clients that they are visiting professionals whose time is valuable,”
says a Sydney salon owner. And a West Australian salon owner agrees, with impeccable logic:
“It should become common practice in all salons to take deposits, like the hotel and holiday industry, people will just accept it as common practice. Nothing is gained from those who are scared, and just end up hurting the industry with their fear. Even Spreets and other common daily deal sites do it, so why not the salon itself?”
Here’s how veteran WSM member Marnie Kallmeyer describes her deposit-taking and cancellation policy:
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