We cover five ways your appointment-based business may be losing money.
Between managing client appointments and making sure that your books are up-to-date, you’ve got a lot going on. But don’t let a busy schedule prevent you from making sure that your appointment-based business is running as efficiently as possible.
Service-based businesses are unique in the sense that the bottom line is almost entirely dependent on the customer’s experience, and that experience is the sum of countless small interactions.
With so many touch points, it’s easy to dismiss small inefficiencies as unimportant. However, not tackling these points of weakness can negatively impact the overall health of your business and your cash flow.
Here are five ways appointment-based businesses commonly lose money, often unaware of how much these areas affect their bottom line:
1. No-Show Appointments
Your customer books time with you. You sharpen your tools, review your client notes and do everything you can to prep yourself to provide an awesome appointment for your customer. Your customer’s appointment time comes and goes, leaving you sitting around waiting, wasting valuable time.
Perhaps the greatest contributor to small business owner frustration and lost revenue are the classic “No-Show Appointment.” With some studies indicating that upward of 42% of customers skip their appointments, what may appear to be a handful of flakey customers can actually be a much bigger issue.
Luckily, there are several simple, proven methods for decreasing no-show appointments for your small business:
- Appointment reminders have proven to reduce no-show appointments by upwards of 80%. Using an online scheduling and business management platform like Artichoke will save you valuable time by automating this process for you.
- Enforcing a strict no-show and/or last minute cancellation policy can also be an effective deterrent to decreasing absent customers. If your customers know that they will still be liable for payment of a service if they do not change or cancel the appointment within an acceptable amount of time, they will be more likely to show up.
- Consider opening earlier and/or staying later on certain days to help accommodate “non-standard” schedules.
2. Not Filling Gaps in Your Service Schedule
Time is money – and that is especially true in the instance of appointment-based businesses. Any appointment-based business owner should have a mastery of what their service schedule looks like at any given time. Using an online scheduling tool like Artichoke allows you to easily visualize your schedule and quickly see gaps in your service schedule.
Stumped on the best way to fill in service schedule gaps? Here are a few quick tips:
- Put the word out on social media letting your customer-base know that you’re available for “last-minute” appointments on date and times where you have a schedule gap
- Send out an email blast offering a special discount to those that book the times that you have available
- Reach out to the loyal customers who you haven’t seen in a while to see if they’d be interested in scheduling time with you
- Try something new! Entice new and existing customers to book time with you during your service gaps by offering a new service that is only available during certain times
3. Not Tracking Your Expenses All-Year Round
Consistent with having a mastery of your service schedule, monitoring, tracking and truly understanding your expenses is critical to small business success. While keeping a folder full of paper receipts is a step in the right direction, it’s also an antiquated process that screams “inefficient.”
FreshBooks makes it really easy (and dare we say fun) to track all of your expenses seamlessly. Integrations with most financial institutions and the ability to snap photos of paper receipts make expense tracking even easier.
Once you’re up and running with Freshbooks, take some time every month not only to evaluate your expenses but also build them into your budgeting. Here are a few quick tips when it comes to expense evaluation:
- Ask yourself – Is this really an expense that I need? Is this expense contributing to my bottom line? Small businesses often fall into the trap of paying for products and/or services that they don’t need
- Categorize your expenses so that you have deeper insight into overhead
- Set a goal for how much of your total revenue gets allocated to expenses. Establishing some basic rules around budgeting will prevent you from overspending.
4. Ignoring the Value of the Add-On
Add-on products or services are exactly how they sound – they’re smaller benefits usually charged at a slightly discounted prices when they customer books an appointment. A classic example is offering discounts for recurring projects and services when the customer books the first project or service at cost.
While add-ons certainly should never be considered core to your business, they are definitely effective revenue drivers that increase the overall customer lifetime value. When considering the correct strategy for your appointment-based business, be sure to keep in mind the following:
- If you’re offering a product as an add-on, do the math on how to price the product so that you’re making money vs. losing money
- If you’re offering a service as an add-on, be sure that it’s complementary to your your main service offering. We recommend coupling add-ons with your most popular services.
- Visibility is absolutely critical. Your customers won’t book an add-on if they don’t know it’s available. Be sure to include add-on services and products to your website and online scheduler.
5. Not Making It Easy for Your Customers to Book Time with You
We’ve gone into detail about why an online scheduling platform is a must for any appointment-based business, but it’s worth reiterating here. More than ever, customers are looking for ease-of-use.
The more cumbersome it is for an existing or potential customer to book time with you, the fewer appointments you’ll have. So, in the spirit of putting the customer first and making technology work for you, be mindful of the following tips when it comes to reducing friction and inefficiencies in the appointment-setting process:
- Perhaps the easiest way to avoid scheduling gaps and ensuring customer retention is to try to book client for follow-up appointments at the conclusion of any service. At the time of payment, a quick: “Should I go ahead and book you in for a follow-up appointment now?” is cheap, easy and effective.
- Make sure that your business is truly open 24/7 by using an online scheduling platform that allows customers to set an appointment with you anytime and any place.
- Don’t forget about your customers that prefer the old school way of getting in touch with you. As much as small business owners should lean into technology to make their lives easier, this should never come at the expense of making your customers happy. In addition to your online scheduling platform, you should also be sure to include a phone number and email address for those that have questions or are simply a little averse to online booking systems.
The Bottom Line
Long-term success for appointment-based businesses is all about minimizing inefficiencies and introducing processes that allow for you to predictively take control. With a little careful planning and some smart technology supporting your business, you can easily visualize and tackle points of friction.
about the author
Attiya Abdulghany is a digital strategy consultant and CMO of Artichoke, the all-in-one platform for appointment-based businesses of 1 to 10 team members.