A few missed appointments a week sounds like a minor issue but can add up to hundreds of thousands of dollars of lost revenue over a year. Find out how to calculate this lost opportunity here.
A range of businesses rely on appointments for business, but the cost of missed appointments is a major issue across industries. For example, in healthcare missed appointments cost the US healthcare system US$150B each year and £1bn to the National Health Service (NHS) in the UK in 2017.
No-shows also waste time. There are 1.1 million small to medium businesses in the UK, who waste a total of 20 million minutes a day nationally on coordinating and changing missed appointments.
Have you ever considered how much missed appointments are costing your business?
A little adds up to a lot
One missed appointment doesn’t sound like much; however, to consider the net effect, let’s look at an example, such as a veterinary practice. There are three vets in the practice, each seeing approximately 15 animals a day and charging a minimum of $120 per appointment. Each vet has one no-show per day.
3 vets x 1 appointment per day missed = 3 appointments per day
This doesn’t seem too serious, until you consider the following:
3 appointments x $120 = $360 per day or
$360 x 5.5 working days per week = $1,980 per week or
$360 x 24 working days per month = $8,640 per month or
$9,000 x 12 months in a year = $103,680 per year.
That’s $103,680 of lost revenue every year! Furthermore, this figure doesn’t include the cost and time taken to reschedule those missed appointments.
How to calculate the loss to your business
You must measure an issue before you can solve it, so let’s work out the cost of no-shows in your business.
1. First, let’s establish the average cost of a single appointment. Calculate the revenue from filled appointments over a two-week period, then divide the total revenue by that number of filled appointments. This is the average cost per appointment.
2. Count the number of missed appointments over the two-week period.
3. Multiply the total number of missed appointments by the revenue you just worked out per appointment. This is your total lost revenue over two weeks.
4. Next, calculate the figure for your annual lost revenue. Divide your two weeks of lost revenue by two (to find out the average weekly figure) and multiply that weekly figure by 52 (for a yearly figure).
This final figure doesn’t account for additional costs, such as time spent chasing up and reminding people about appointments. Do your staff spend hours per week on the phone trying to get hold of people to remind them of their appointments?
Businesses can implement a simple solution to cut this lost revenue and increase productivity of staff.
Find out how SMS appointment reminders are an efficiently way to keep your appointment diary full.