← Pilates Business Podcast
Pilates Business Podcast
Late Cancel Fees: How to Protect Your Studio Without Losing Loyal Clients
00:24:16
Loading summary
Transcript1 lines
- [00:00]
Sarah Glanfield
Have you ever felt awkward about charging a no show fee when a loyal client cancels last minute or worse, just doesn't even show up at all? Well, you are not alone. In fact, late cancel and no show fees have quietly become the norm in boutique fitness. But the way you handle them can make or break the relationship that you have with your client as well as your studio's bottom line. So today I'm diving into what's really happening behind the scenes at Top studios in New York, Louisiana, and across the US and beyond, and what you can learn from them. Now, you might be surprised at just how strict some studios are and how others strike a balance between policy and and grace. Well, hi there, I'm Sarah Glanfield. I'm a business and marketing strategist just for boutique fitness studio owners like you. If you're ready to be inspired and make a bigger impact, you're in the right place. All you need are a few key strategies, the right mindset, and some support along the way. Join me as I share the real life insights that will help you grow a sustainable and profitable studio. This is the Pilates Business Podcast. Welcome back to another episode of the Pilates Business Podcast. I'm Saran Glanfield and I am here to help studio owners just like you to simplify your marketing, streamline the operations and scale your studio business without overwhelm and without burning out. Because I want you to integrate some smart, sophisticated and strategic actionable items into your business so that you can stop spinning your wheels and actually enjoy what you do. Right? That's what we're here to be on this planet to do. Enjoy it all. Now today's topic is one that stirs up a lot of feelings. Okay. And you know, there's a been a bit, there's been a bit of a shift in the industry recently in this and it kind of came to my attention when I got a call from a journalist who was writing for the one of the largest news publications in the country and wanted to know my thoughts on cancellation policies. And I kind of shared with her my thoughts and I thought, you know, we should talk about this in the podcast because I talk about it all the time with my studio owners inside of Thrive, what the policy is, what, what I recommend and how to make sure your policy is aligned with your client, your brand and your experience. And I also have a playbook for it for all my members as well. It is one of the things that we just want to make sure we have right we have down and then it kind of does its job for us. Now, if you're like many studio owners, though, you've probably wrestled with some questions around that policy. Around late cancel fees, around no show fees. And those questions often are things like, how strict should my policy be? How much should I charge? How should I enforce it? Should I always enforce it? And then how do I communicate it without scaring clients away? Now, the thing is that having clear and consistent cancellation policies is not about punishing clients. Actually, it's about protecting your revenue. It's about respecting the other people in your business, your other clients and their time and their effort to want to be a part of your class as well. And it's about also about to some degree, creating a bit of a culture of accountability. Now, without a solid policy, you actually risk losing thousands of dollars a year in those empty class spots. But on the flip side of that, I will add that if you're too rigid, you could alienate your amazing clients that you love and want to continue to work with and perhaps even hurt your attention long term. So I thought it might be a good idea for us to break down some of the things that we're seeing. And I did a little bit of research ahead of this episode because I wanted to share with you some data points as well. But I want to talk about what's typical, what's changing or changed, and perhaps how you can also adapt some of these insights for your studio as well. So let's talk a little bit about what we see and why this policy even exists at all. And the problem that I'm seeing right now is that many studio owners may have some kind of a policy, but are perhaps hesitant to enforce it. They're worried about upsetting clients, or maybe they feel it feels a bit mean to them. I totally get it because you have built your studio on relationships and on that sense of community. But the reality is, is that what we're seeing on a bigger scale in this industry is that these fees are now standard. They are a baseline. In fact, we're not just seeing them in boutique fitness, we're seeing them in other industries as well. I'm seeing hair salons also require also require no show or late council fees to be paid as well. And so we're seeing it in lots of different places. Clients now actually begin to expect them, and especially if they're booking with some more larger franchise chains, national chains, we do see that this is just very much the standard and clients understand the way it all works. Now, the problem is that without having a clear policy in place, you could end up with empty spots in your class. And empty spots often can mean lost revenue. And worse, if you have a waitlist system, someone else could have taken that space if the clients had cancelled earlier. So one perhaps missed reformer spot or class spot here and no show there can actually add up fast over time. So I want you to consider the fact that these no show fees or late fees are not about being punitive. They're actually about reinforcing commitment. And when you position that them that way and you position them in a way that sort of encourages commitment and you are very clear and very transparent with the way that your policy works, you'll find that your clients actually respect the boundaries. Now some of the biggest names in our industry have completely embraced this. It's been that way for many, many years. They communicate the fees up front, they automate the enforcement and they still have really strong loyalty. And it's because clients value that fairness. They value knowing the rules of the game. They understand how it works and they know how to, you know, work with it and integrate that into the way that they schedule their sessions. So before we continue, I want you to just think about whether your current policy is actually protecting your revenue of your business or perhaps leaving it vulnerable. Okay, Just have a think about whether or not your policy is protecting your business or perhaps your revenue is vulnerable to a high level of no shows or late cancels. Okay, so let's talk a little bit about the trends and what's normal in today's market. So you know, if you've got a studio where you have a cancellation, a late cancel policy you may have, if you're a private session studio and you're offering private sessions, if a studio, if a client late cancels or a client no shows, it's usually a loss of that session. That's typically the way that we have seen traditionally that work. And, and that's often what we, I'm still seeing and in, in place. And as long as you are transparent about the way that that works, it's actually very simple and straightforward. Cancel it late cancellation or no show policy. Now, things start to get a little bit more interesting when we have got membership type offers in place and that's where we have these sort of two tiered fees for a late cancel and a no show. So a late cancel fee, just to really be really, really clear, is where someone does actually cancel, but they are charged a fee because they're perhaps within the window of the late cancel, the cancellation window, and they still pay A fee, but they still can cancel this session. They pay that fee. Now there is also then a separate fee that is called a no show fee. And this no show fee is as perhaps the description kind of indicates is that's when clients simply do not show up to class at all. They're not late canceling, they just don't show up at all. And what we see is that we're seeing a couple of different kind of, we're seeing quite a few different ranges across the country and in various brands and depending on what the price point is for a membership and a class, et cetera. But I typically see that the late cancel fees range from 10 to $20 and then the no show fees range from 15 to 30 or above. Right. So they can be even higher than $30, especially if it is a super premium experience or studio. And now these are different, these are mostly, these are for class based businesses. This is not typically for your private sessions. Like I said, for a private session, typically you'll lose that, that session. And the reason why is because in a class someone else can very easily take that spot and be paying full price. And the reason why it became even more of a problem is that we've seen a rise of unlimited membership options for classes in the boutique fitness space. And when we have a very limited capacity in those classes, then we often then are sort of at the whim of whether or not someone shows up if we don't have a late cancel or no show policy in place. Now what we're seeing is that certain brands of franchises and studios are absolutely upfront about those fees. And clients know the way that they work. So they know that they, if they late cancel, they're paying this fee. They've already paid their membership for the month. This fee is in addition to that membership price. Okay. So this is now becoming a bit of a norm across many studios. And so clients are to some degree expecting it. In some cases, the degree to which people that the price point and whether or not there is a late cancel and a no show fee is very much dependent on the brand in and the studio itself. But I did want to sort of talk a little bit about the numbers themselves because obviously if you have a late cancel scenario, you can still fill that spot perhaps with wait list. If you have a no show, you know, obviously that you, you cannot do that. So there is, that's why that, there's that difference there. Okay, now what is the window? That's the next question. I think you're wondering is like what does the cancellation window look like. Well, for a private session for pilates, you know, 24 hours is still absolutely the minimum. I do see some studios be a little bit longer than that. Um, but typically 24 hours ahead of time is still pretty much the standard for a private one on one session. For other modalities, say for spin or for yoga or for barre, it really, really ranges. So we see everything from two hours to, you know, perhaps 12 hours. Um, and I would say that for those larger classes, it's usually a much shorter time period, so that you're able to sort of bring people in and out quite easily. It still is still a policy that is less impacted by a specific number of people in class. As long as you have enough people in the class. Right when we start to, again, we start to see these policies we integrate and implemented because of the very limited nature of some types of boutique fitness studios, AKA hello, my Pilates class, my equipment class, Pilates studios. So these are the classes that have anywhere between sort of 6 to 12 pieces of equipment. And for that we are seeing cancellation windows be anywhere from that 24 hours before to about 12 hours before, depending on, you know, the size of the studio, etc. Okay, so if you, you know, this is something that we're starting to see. And again, it really varies, as you can tell. Like I can't give you a number for a late cancel fee or a no show fee or a cancellation window. It does really vary across the board. I was trying to get you a number, a recommendation. I couldn't get to it. But it is about your clientele as well. We have to take into consideration your behavior of your clients, their expectations, you know, and also your willingness to really, to really enforce your policy. Because I will say that the number one thing is that you are willing to enforce the policy that you set. Okay, so you might have been thinking a little bit about will this upset my clients. I want you to remember that we are seeing these types of fees pop up in various different places and that it is becoming more of the norm than ever before. And so to some degree, the market is already conditioned to this. And I would say not having a policy probably will hurt your business, and not consistently enforcing it will also hurt you in the long run because it's probably going to put you in a very tricky situation. So now when it comes to sharing your policy, I'd say this is where many studio owners trip up, right? Even if they have a policy, perhaps they don't communicate it clearly. But the larger big Players, the big franchises out there, they are really good at this. They put those fees in the membership agreement, at the signup, they're highlighted in booking confirmations, and in many of those reminders that they may get. And so there is no missing this policy if you are a member of a larger chain or franchise. And the reason why is because clients do forget. In fact, they only want to look for that policy if they are planning to cancel. But they need to see it in lots of places to know that they need to cancel ahead of time first. So we don't what we want to avoid and what the worst case scenario is that we don't tell clients about policy, and then they are surprised by a fee because that's when we start to see complaints trickle in or perhaps come in big waves. So the more transparent you are, the more clients will respect the policy and you'll face fewer conflicts. And I would say for the most of us, that's a really good place to be. So I want you to make sure that if you have a policy, I want you to consider whether your communication around that policy is clear and consistent at every touch point. Or do you find that clients try to negotiate, get surprised when they're charged a fee? Um, if so, then that might be a little bit of a sign that you might want to be a little bit more clear and a little bit more consistent. Now, one of the most interesting insights was from the research that I did and from the conversations that I've had over the years with studio owners is that even the strictest brands where they have got really, I mean, some of the research showed that some of these, some of the, some studios are really, really strict and quite aggressive with their late cancel and no show fee structure. It actually kind of surprised me in some scenarios. But even the strictest brands do tend to build in a little bit of grace. And you know, ultimately, as you've heard me say here over and over again, we are, we are building a relationship business. And that means that we do have to recognize that things happen. You know, our clients, they get sick, their kids get sick, they may have to go to the er. I mean, this happens to me quite often where I have, where there are people in my world, whether it's my kids or my studio owner's friends, kids, husbands, there is some medical emergency. And in that scenario, you know, I don't know that we always want to be charging people for that in that scenario. Right. And so there is a little bit of grace to this because we are in a Relationship business. And we want to give a little bit of grace to our clients in those scenarios as well, because ultimately we want that client to continue to come back. So we want to have that structure and that policy. We want to be clear and transparent around it. We also want to make. To incorporate humanity into this, too. Right. And so you want to have give a little bit of discretion to offer some flexibility when it makes sense. Sense. Now you're going to get the repeat offender, you're going to get that client who has the unlimited membership and books into a class every day and then decides which one they're actually going to go to. And they only come to maybe half of the classes they've booked. I'm not talking about giving that client this type of grace. I'm talking about the client that comes really consistently who is very respectful of your cancellation policy, who calls you scrambling at the last minute with their emergency and why they can't come, and you say, hey, just because I know you wished you could be here, here, and I appreciate you letting me know, and I'm so sorry that whatever you're going through, you're going through, you know, I will not hold you to the cancellation policy this time. Okay, so this is where you're able to sort of really keep that goodwill high, but also protecting your credibility for perhaps future scenarios of the same thing. Right. So it's not about being punitive. It's not about being super rigid all the time. It's about having very, very clear rules, but also having thoughtful flexibility. Okay. So you might want to just think about when or how you might waive a fee here and there when it. And think about when it makes sense to strategically do that. Okay. I do think that's quite important, and I always encourage you to think about your business in this way because, you know, we are. You know, we are building communities here. Right. So let's bring all this full circle. The big picture here is that this isn't just about the fee itself. It's actually about building a bit of a culture of commitment, of respect for each other, each other's time, the value and other clients at your studio. When clients recognize and know that their spot on your schedule and that their spot in class matters and that they are accountable for showing up, you actually increase engagement and loyalty. And what happens often is that clients tend to respect your studio more. And from a business standpoint, automating the enforcement really does protect your revenue. It takes you out of the conversation as much as possible, and you can literally reclaim not Only thousands of dollars a year in revenue, but also a lot of admin time for you. And on top of that, even keep your classes full and that wait list moving, which is always a good thing. Okay, so let's do a quick recap. Big takeaways today. Number one is late cancel and no show fees are a standard in class based boutique fitness studios clients. No they there no to perhaps even expect them. We see the range of fees varying between anywhere from 15 to 35 plus dollars. And the cancellation window is sort of between 4 to 12 or 24 hours. Actually I would say for some studios I saw mostly most class based businesses is between 4 to 12 hours. Okay, now this is not necessarily for you to then say, okay, that's what I have to do, Sarah. And said on the podcast that's what I should do. Not at all, not at all. Your cancellation policy window and fees is going to be unique to your business. I just wanted to share the data. Okay. Now when you have a policy, and I do think you should have a policy, then it's really important and this is a recommendation that you are clear with that and that you are transparent about it and that it is shared openly with your clients. You're not hiding it because you're worried about it. You're actually open with it. Okay. And so I also want to just remind you to integrate a little bit of humanity and grace into your policy around cancellation and late fees as well, because that does ultimately drive retention and community and loyalty as well. Okay, so action step for you. Review your policy, perhaps tighten up your communication and maybe even make sure that your team has the power to enforce the policy or be flexible with it as well. So if you've got a front desk team, make sure they know when they can waive the fee and when they can't. All right, now like I said, we talk about this inside of Thrive all the time. In fact, I have a playbook around cancellation fees and late cancel fees as well as all of the research that I did when I to put this podcast together. It's all inside of Thrive for my Thrive members. This is just one of the playbooks of hundreds that we have inside of the, the, the, the program. And we talk about it often because like I said, your policy is going to be unique to your business. And I want to make sure that is aligned with your brand, the way that you work with your clients, and the experience that you deliver as well. So if you want to learn a bit more about how Thrive can help your studio, just go to spring3.comforward/thrive or feel free to get in touch. I'd love to chat with you and see how we can support you your growth. That's it for today friends. If this episode was helpful, please share it with a fellow studio owner and if you enjoyed the show, take a moment to leave a review. It really does help us to reach more amazing studio owners and teachers just like you. Until next time, keep building that strong and thriving studio business and I'll see you in the next episode. Did you love this episode and want more? Head to spring3.com and check out my free resources that will help you run a profitable and fulfilling studio business. And before you go, one last reminder. There is no one way to do what you do, only your way. So whatever it is that you want to do, create or offer, you've got this. Thanks again for joining me today and have a wonderful rest of your day.