This is something that I’ve noticed from time to time with local and online businesses that would always drive me nuts.
Maybe companies don’t know how to keep customers, in fact you would think they are making an effort to drive their customers away.
Okay, maybe they aren’t doing this consciously but they are doing it.
For example, I had an appointment with a local business recently. I got stuck on the other side of the city and knew I wouldn’t make it to my appointment. I called them and told them I couldn’t make it and if I could reschedule.
They then got a big time attitude and started telling me that if I cancel within 24 hours that they would charge me 50% of the cost of their services anyways and that they “prefer reliable customers”.
Rewind for a minute and I’ll let you know that I’ve been a customer of this local business for around 1.5 years. I’ve spent a lot of money with them and the had otherwise treated me great.
Now, over a measly 50% of the cost of 1 visit, they were potentially losing a customer.
Let’s do some math here. Let’s say after expenses the make 25% profit off of me. Let’s say their services are $100. So that’s $25 per visit once a month, 12 times a year. That’s $300 profit, at least, per year.
Or, for $50 one time, they can lose me as a customer.
The local business can make $250 more by not having a 50% of the cost cancelation policy.
This doesn’t even begin to touch on how many people would leave bad reviews and hurt their business for charging them the 24 hour cancellation fee.
I left out a few things such as what percentage of people would actually stop going because of this, but presumably enough that it would still lose them money each year.
Have you ever had any policies or procedures in your local or online business that actually were losing you customers and profit?
I’m sure clients may have had this happen to them as they are their own consultants. This post is great, something to share with our consultants…giving them something to think about!!!