Not too long ago, I was talking with a commercial lender friend in Orlando. He was telling me about a barber shop he had discovered down there who offers memberships for his barbershop.
The memberships allow you to reserve a specific time every so many weeks for whatever services you want. Maybe you paid for 30 minutes and just got a haircut. Maybe you paid for 45 and got a haircut, a manicure and a shave.
The barber caters to executives, Realtors, attorneys, and promotes his business to executives whose time is extremely valuable to them. Sitting in a barbershop for 45 minutes waiting for your turn is not these guys’ idea of productivity. For some of us, it’s relaxation or a chance to read a magazine. For others, it’s money pouring down a hole.
But here’s the really brilliant part: his services are all prepaid.
If you want your haircut and shave slot every week or every other week or whatever – you pay for your membership in advance to reserve that slot as yours. In some cases, reservations are made a year in advance. People love it because they know that they can stop in at their reserved time and get the services they need without waiting. This allows them the wonderful freedom to get back to business, golf, family or whatever – on time, on their terms.
They can make plane reservations around their barber time, because they know their time is theirs.
Even though the barber is trading time for dollars, he is doing so in a business that typically allows itself to be the random recipient of customers.
Many have no idea how much money they’ll make tomorrow. That’s insane in a service business. Any service business can implement systems similar to this.
This barber doesn’t leave himself open to the random “Hmm, I need a haircut. How’s traffic in that part of town today? Oh, never mind, maybe I’ll go next week” arrival (or non-arrival) of customers. He knows how many paid appointments he has next week. He has the best setup of all: built-in scarcity. He can say, “Well, on the first and third Thursdays, I have three 30-minute openings available for members, but that’s it.” He knows full well that the rest of Thursday is already booked and paid for. He has a healthier business and his clients know they can get a cut when they need / want it.
Prepaid appointments work – as long as you remain in control of your time and don’t let time vampires steal it away from those who have paid for it.
Back when I was in the photography studio software business, we saw great success with prepaid appointments. This was particularly effective when a client was in the senior portrait business. Kids with a driver’s license are distracted, busy and in many cases, don’t really care if they miss a photo shoot. They’d often miss them. Every time, this wastes photographer time, studio time, assistant time, plus it’s pretty hard to sell portraits that you haven’t been able to take.
The smart studios figured out that if the portrait appointment was paid for in advance, mom would “properly motivate” Dirk or Susie to make it to their portrait appointment. No shows went through the floor, almost to zero. In some cases, the number actually did hit zero. Those were happy, happy studios. Calendar software changes forced the staff to get the prepayment before the appointment could be booked, so there was no way to work around the system.
When is the last time you had a no show? When is the last time you had a no show that didn’t cost you money? When is the last time your service business not only knew how much money it was going to make next week, but also knew it was already in the bank?
More hard dollars. Get it fixed.
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