Not too long ago, I was talking with my buddy Chris Hurn, the commercial paper wizard from Orlando.
He was telling me about a barber 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 wanted to get. 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 others whose time is very valuable to them. Sitting in a barber shop for 45 minutes waiting for your turn is not these guys’ idea of productivity.
But here’s the really brilliant part.
It’s 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, for a year in advance. People love it because they know that they can stop in at their personally 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, they’re 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.
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, nevermind, 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 first and third Thursdays, I have 3 thirty minute openings available for members, but that’s it.” – knowing full well that the rest of Thursday is already paid for.
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 drivers licenses are distracted, busy and in many cases, don’t really care if they miss a photo shoot. They’d miss them time and time again. Every time, this wastes photographer time, studio time, assistant time PLUS there’s no sales made on portraits that don’t get taken.
The smart studios figured out that if the portrait appointment was paid for in advance, mom would “properly motivate” Dirk or Susie so they’d 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.
When’s the last time you had a no show? When’s the last time you had a no show that didn’t cost you money? When’s 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.