How much are no-shows costing your business?
Have you ever stopped to calculate how much money your business loses each year from no-shows? If not, we don’t blame you – it can be confronting.
But knowledge is power, people. Knowing exactly what you’re missing out on could help you conquer the no-show problem in your business. Let’s take a look at the why and how of measuring no-shows, and how to fix it.
First, why bother measuring the cost of no-shows?
No-shows are no good for your business. Sure, the occasional missed appointment doesn’t have much of an impact, but when they start cropping up every week, you can really feel the pinch.
Studies in the UK and the US have shown just how costly no-shows can be. Missed appointments cost the US healthcare system a whopping US$150B each year, while in the UK £1bn went down the drain in the same industry. Smaller businesses suffer, too. The average no-show rate is 10-15%. Not only is this a hit to your revenue, but it’s a huge waste of time. Just consider how much time your team spends chasing people who don’t show up, and trying to reschedule appointments. Ouch.
So, what are no-shows costing you?
To calculate the baseline cost of missed appointments in your business, apply this simple formula.
- Work out the average value of a single appointment. To do this, add up all the revenue from filled
appointments over a two-week period, then divide that by that number of filled appointments.
- Count the number of missed appointments over the two-week period.
- To work out how much you’ve lost over two weeks, multiply the total number of missed appointments by the average cost of an appointment.
- To work out your annual lost revenue, multiply the answer from step 3 by 26.
Just note that your answer to step 4 doesn’t account for additional costs like time spent chasing up and reminding people about scheduled appointments. If your staff spend hours per week on the phone trying to get hold of people who miss their appointments, then factor this into the equation, too.
Let’s look at an example.
Pawprint Veterinary Practice employs three vets, who each see 15 animals a day and charge $120 per appointment. Each vet has one no-show per day. For the business, that’s three missed appointments each day – and the costs quickly add up:
3 appointments x $120 = $360 lost per day
$360 x 5.5 working days per week = $1,980 lost per week.
$360 x 24 working days per month = $8,640 lost per month..
$8,640 x 12 months in a year = $103,680 lost per year.
Ready to tackle no-shows head-on?
Now you know how much no-shows are costing your business, it’s time to do something about it. While you’ll never be able to eliminate them completely, you can significantly reduce no-shows with a few simple strategies.
- Use automated SMS reminders. Reduce the chance of a customer simply forgetting their appointment with automated reminders. For inspiration, see our 7 top tips for sending automated SMS appointment reminders.
- Ask for a ‘Y’ or ‘N’. As part of your text message reminder, ask the customer to reply ‘Y’ if they are coming, and ‘N’ if they need to reschedule or cancel.
- Consider discounts for pre-paid appointments. If people pay in advance, they’ll be much more likely to show up. You could give them an incentive to pre-pay.
- Consider taking a deposit. If no-shows are a real problem, you could ask for a deposit or charge a ‘booking fee’ when people book an appointment
- Support SMS reminders with a phone call or email. When no-shows are getting out of hand, consider using more than one way to remind patients or customers. It might take an extra moment or two at your end, but could help ringfence revenue and stop it slipping through your fingers.
Say ‘no’ to no-shows
Take your first step towards reducing no-shows with a free trial of MessageMedia. Our platform integrates seamlessly with your favourite CRM and calendar tools, making it as easy as pie to get started.