Why now is the time to take deposits on your bookings
With the cost of living continually arising, the challenges you’ve always faced surrounding no shows, cancellations and payment methods are all the more impacting. With longer, higher value treatments (like bespoke facials), whether you’re a mobile therapist or a salon owner, clients missing their appointments can turn your projected earnings for the month on their head.
Implementing a deposit policy can help your business to recover some of the takings lost from no shows and last minute cancellations. It’s proven that clients are far less likely to cancel if they’ve already paid a deposit in advance.
Meanwhile, for you it means improved cash flow with the opportunity to buy in stock ahead of their treatment. It also increases your confidence that the payment method they use on the day of the appointment will work securely.
Deposits don’t have to be off-putting to clients when booking, either. If clients seem uncertain about making a deposit, make sure you reiterate the fact that deposits help them spread the cost of their appointment, which can be a positive. For you, it’s also an incentive for them to turn up if they’ve already partially paid.
Drawing up a policy
Before you start, make sure you write up an official cancellation policy. This sets out your cancellation terms clearly and holds both you and the client accountable to these. Make it clear that the deposit is required before the booking is confirmed. Set out the % of the treatment cost or flat fee that needs to be paid in advance. Explain the procedure for taking deposit payment, and state what would constitute as a client losing their deposit.
You may wish to set out terms in your policy that mean a percentage amount of the treatment fee will also be charged as well as losing their deposit under certain circumstances. You may decide to charge more for no shows than cancellations if you do this. Remember to clearly define what is deemed a no show and what is a cancellation. Additionally, provide a time window for cancelling should clients need to.
How to approach taking deposits
We know that conversations around money can be awkward. Generally, clients do understand that certain measures need to be implemented in today’s changing financial climate. The majority will respect this and comply to your new policy.
However, if you are worried about the response from your customers to requesting deposits, start by taking deposits for your higher value treatments first. This is an opportunity to pilot your deposit scheme, while also protecting you when larger sums are involved.
You can also try taking deposits from your regular, long-term customers first too. You can gauge the response from them by doing it this way. Troubleshoot any problems and nail your messaging ready for when you officially roll out the policy.
Ultimately, creating a cancellation policy for your clients gives you more control of your finances and time. With these boundaries clearly in place, you are one more step towards protecting your business from one of the biggest challenges faced across the industry.¬†