Turn Cancellations Into Revenue with These Simple Steps

Cancellations are a big headache in the spa and salon business. They cost you revenue and mess up your schedule, and you can’t avoid them -- but you can minimize the damage.

There are several steps you can take to do this, including taking a credit card deposit at time of booking, and sending out reminders. But there is no one-size fits all solution. The solution differs from business to business, and even from situation to situation.

Let’s have a look at the steps you can take.

Set parameters

First things first, you must have a policy in place. This doesn’t mean you will always stick to that policy. There are many situations in which you might waver from it, but it’s best to start with something rather than nothing, and to set parameters.

Your policy can actually get quite granular. Consider different rules for different types of bookings and booking times. You want to maintain your cancellation policy, but still have some flexibility to show empathy and say “I totally understand that your car broke down.”

So, what is your cancellation policy? Do you allow 24 hours or 48 hours? Ask yourself how long you reasonably need to fill treatment spots. It might be easy to fill one massage that cancels eight hours in advance. But you will probably need longer lead times for a group cancellation of five or 10 people – can you do that within 24 hours?

And communicate that policy to guests. You can’t enforce it if they’re unaware of it.

Use your available resources and tools

Use your own data to track revenue lost through cancellations. With Turn Away Tracking, you can track times with high cancellation rates, equate that to a dollar value, and look at trends.

Then, if you know people are more likely to cancel a Sunday morning 9 a.m. appointment, you might charge a 50% deposit for those specific reservations.

Empower your staff to make decisions

Your front desk staff should be empowered to make decisions such as who is charged for a no-show and who isn’t, without passing it on to a manager or director, and they should be supported in their decisions.

Because if a front desk staffer says to a couple, “We are going to charge you $320 for this missed couples massage,” the client is not going to be happy and is going to ask to speak to the manager. The manager has to support the front desk staff, because if you want staff to enforce your policy you have to support them in doing so

Exercise good judgement, and remember you’re in the guest experience business

Judgement is key. How hard are you going to enforce your cancellation policy if you’re losing $50 revenue on one 45-minute manicure, vs losing $320 on a couples’ massage? Is it worth it? Or, if you’re a hotel spa, you would probably not charge a hotel guest who is already paying $500 a night for a missed $150 massage.

Our business is about guest experience, and you want your guests to be happy and to come back.

And be aware that guests are smart, and if you tell them you’re charging them $320 for a couples massage because they didn’t come in, they will probably cancel their credit card – and then you can be pretty sure they’re not coming back.

Whatever your policy, there are going to be times when you have to take a hit, because your goal isn’t to punish people, but to get them to return. We are in the industry of providing customer satisfaction, so we have to be aware of the line where charging guests for no shows negatively impacts building your customer base.

At that point you have to ask yourself whether it’s worth it. And only you can decide the answer.

This article was created in collaboration with the sponsoring company and our sales and marketing team. The editorial team does not contribute.