How to Create a Realistic Cancellation Protocol

Spa guest appointment behavior has changed dramatically in the last five years, as our culture has become increasingly "non-committal." What used to be considered "flaky" behavior has become the norm; lives are ever-busier, schedules are more hectic and ever-changing, families are running a dozen different directions at once every day of the week.

This is not good news for businesses that run on appointments. However, trying to make your customers operate by your rules is a losing strategy. It is impossible to be rigid and customer-centric at once. In today's marketplace, a competitive advantage can be had by being flexible and accommodating. It may be time to re-evaluate your cancellation policy, particularly in light of increased competition.

There are two goals in cancellation management. One is to ensure that employees who are paid by the appointment are not unduly impacted by customer cancellations. The second is to accommodate guests' busy lives while not completely ceding control of your revenue. In other words, being completely flexible is as dangerous as being completely rigid.

Good schedule management is an important benefit you offer to your therapeutic treatment staff. Good schedule management will enable you to attract top service providers, who in turn will give your guests the best possible service.

A key element of good schedule management is an effective cancellation / no show program. A good cancellation / no show program will provide flexibility for your guests, compensation for your service providers and recompense for your business.

We ask our guests to provide at least 24 hours notice with any changes to their reservations (48 hours for reservations of 2 or more hours). If for any reason they need to change within the 24 hour window, we'll make every effort to fill the vacated appointment time with another guest. If we're able to do so, there is no charge. If we are unable to fill the vacated time, we simply charge $40 per hour of service reserved (or portion thereof). This flexible cancellation protocol applies to all guests, regardless of their reason for change... a sick child, a last-minute weekend away, an injured pet, etc.

We've found that our flexible $40 charge, rather than the full amount of the service (as many spas charge) provides our guests with flexible options. Flexibility is the key word in your communication with guests. Generally, customers recognize that the business requires a reasonable financial commitment from them to ensure availability of an appointment. By charging only a portion of the reserved services value, we demonstrate our understanding that a cancelled appointment is a disappointment for all involved and that we're not penalizing them, but rather protecting the earnings of our employees.

Administration of an effective program is 100% reliant on the compliance of your front desk/reservations staff. It is imperative that all reservations are guaranteed with either a gift card or a credit card, and that your protocol is clearly communicated to all guests. If these components are missing, your program will not work. We make a notation in our guests' files to communicate internally that the guest is aware of our protocol.

A courtesy reminder goes out to our guests approximately 48 hours prior to their scheduled visit. This can be a phone call or an e mail. (Our Millenium software program lets us automate our e mail confirmations, a huge time saver. This has become our guests' preferred confirmation medium.)

Let the guest know you will assist them if they should need to make any changes. By calling 48 hours in advance and enabling changes up to 24 hours before their appointment, we make sure that guests have plenty of time to amend schedules without penalty.

The confirmation also gives you another opportunity to reiterate your cancellation protocol to the guest. We use the following telephone script for our confirmations:

"Good morning. This is Paul calling from Preston Wynne Spa in Saratoga. We're calling to confirm Babette's appointment for this coming (day/time). If for any reason you need to make a change to your reservation, please let us know soon as possible at 408-741-5525, as your appointment is guaranteed for this date and time. Thank you so much. We look forward to seeing you on (day/time)."

The administration of your cancellation program can become unwieldy and costly if not kept in a simple format.

What happens when a guest cancels within the window, or no-shows?

We use a simple form for the support staff to complete when a guest cancels/changes their reservation within the 24 hour window (technical team members complete the form for 'no-show' appointments). We typically receive between 1 and 3 cancellations/no shows per day, so processing the forms through the front desk has been the ideal solution. Because we process the cancellations on a daily basis, utilizing additional staff resources to administer the program is unnecessary. An added benefit is the guest receives notice of the charge in real time, making the collections process highly effective and consistent.

Treatment staff are compensated for a portion of their normal per-treatment rate, using the funds received by the cancellation program. Out of the $40 received by the spa for a cancellation, the employee who lost the appointment receives $25. The rest is used by the spa to defray the administrative cost of the program, not to mention payroll burden on that $25.

By stabilizing employee earnings, the spa can establish its role as an employer of choice. A good cancellation management program produces a genuine win-win!

By Peggy Wynne Borgman, CEO, Wynne Business and Preston Wynne Spas