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.
That was the headline on a blog post a couple of years ago. And it seems, little has changed. I fixed it in my salon, permanently, by insisting on deposits.
In fact, I was interviewed by Greg about this shortly after implementing the policy:
But in a 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’. But it CAN be so simple to both eliminate the fear, AND stop the no-shows, as long-time WSM member Kim Susskind explains in this recording with WSM founder Greg Milner.
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. 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.
- But, 88% of salons 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.”
Another long-time WSM Member, Sharon-Lee McGaw, says deposit taking has dramatically changed the way her clients behave:
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