Mitigating the Financial Impact of No-shows on Your Business

No-shows are an issue for every company in the tertiary sector. Whatever the cause, no-shows impact your business in multiple ways. It’s important to develop a strategy to minimize your no-show rate as much as possible.

What can cause no-shows?

There are five main reasons why customers don’t show up for their appointments.

Forgetfulness

Whether it’s you or your customers, agendas are pretty full and everyone has to think about a lot of things at the same time. When you booked your customers’ appointments, they may not have taken the time to update their agendas. Or, the week of the appointment was a very busy week for them and their minds were on something else.. Sometimes customers just forget.

Wrong slot time

Customers didn't forget they have an appointment to visit one of your condos or that their dog has an appointment for a vaccine. However, they thought it was a day later or at another time on the same day. Chances are, these “new” time slots are already booked. Inevitably, this results in no-shows for you.

Last-minute emergency

Customers can run into all sorts of last-minute emergencies: they have to stay home to take care of a sick kid, overtime was required at work, water damage occurred at home, etc. There is a lot of things that could happen at the last minute to prevent your customers from showing up to their appointment.

Service not required anymore

They don’t hear the noise in their car anymore or their cat is miraculously feeling better. By the time the appointment is supposed to take place, they don’t seem to have an issue anymore; their appointments are not needed so they decide to not show up and forget to let you know.

Financial trouble

They know they won’t be able to handle the bill at the end of the appointment so they simply don’t go to their appointments and don’t tell you.

What is the impact on your business?

Did you know that no-shows can really wreak havoc on your business? Here are just some of the ways.

Loss of profit

The first impact we all think about is the loss of profit related to no-shows. In addition, you may have sold an additional service or product to these customers during their visits. In some industries, it’s not unusual to see companies charging penalties to no-show customers. However, this is not the best way to increase customer engagement.

Calculate how much revenue annually you are losing with no-shows.

Fixed expenses and employees

Even if your technician is not going to work for half an hour, you will have to pay him. While there is no revenue, you still have to pay for related expenses. In addition, your productivity is affected. Even worse, maybe you had to spend time to prepare a setup for a special repair or a short surgery to treat a pet. Unfortunately, those costs cannot be eliminated.

Missed a chance to build customer engagement

Each visit at your store is a chance for you to convert a potential customer into a loyal customer or to improve customer engagement. You spend money to advertise your business and attract new customers. This means attracting each new customer has an associated cost. If this customer finally doesn’t show up, this cost generates zero value for your company because you can’t be sure the customer is going to reschedule or if she’s going to a competitor because you can’t offer a new time slot soon enough. You also lost the ability to convert this customer into a loyal customer because she was not able to appreciate the quality of the service you offered.

Dissatisfied staff

Because you want to satisfy your customers all the time and you don’t want to lose a deal, you could offer your customer the means to rebook the appointment the same day or squeeze some extra time between two other appointments. To do so, you’ll have to ask your team members to work overtime or to change their schedules to cater to another customer. You’ll end up upsetting your staff to keep your customers happy.

How to prevent no-shows

It’s a good thing to be aware of the impact of no-shows; however, the most important thing is to prevent them in the first place. Overall, the relationship between your company and customers will highly contribute to a decrease in your no-show rate. The reason? There will be mutual respect between you and your customers and they will care to let you know they can’t make it.

Communication is the key to reducing no-shows. One effective way is to use friendly text reminders. Send a message to customers to confirm that they are coming to the appointment two days before it occurs is an example. If the appointment is not needed anymore, a customer can easily answer to the text and you will know right away. The customer could ask for another time and you will be able to find the most convenient spot at a later date. This reminder could also be a good way to give special instructions to your customers, such as: “We’ll need you to leave the car for the entire day” or “Don’t give any type of food to your dog in the morning before the surgery.”

Another way is to confirm by text the date and time of each appointment. That way, customers know that they always have the info in their cell if they are not sure about the date and time. They can also create an appointment into their phone calendar directly from the message.

Finally, by providing a simple communication channel to your customers, you’ll increase the chances that they will let you know that they can’t make it to their appointments.

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