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Cancellations are Awesome: A Contrarian Look at Rules

 

Jumping for JoyEver see a notice from a health care practitioner that says that you have to cancel on 24 hours notice, or pay a penalty?

This is a loaded question with an ulterior motive: I want you to start taking a fresh look at all of the rules in your small business. And think seriously about changing or getting rid of them.

Back to the cancellation fees: I learned something interesting from a very wise supervisor when I was becoming a psychotherapist – she mentioned that she rarely if ever enforced such a fee. I thought this was really cool, and in fact I don’t even say anything about cancellation fees at all in my own paperwork.

So does this make me a stupid practitioner who lets clients walk all over me? You decide. My logic is that the therapeutic relationship with clients gets put at risk if we “fine” them – especially if life intervenes at the last minute, like it does for all of us. So in the grand scheme of things, I normally feel that it is better to accept the occasional missed session in return for maintaining these relationships.

Let’s break down the mechanics of how this policy affects me:

Doesn’t this have a financial impact? My supervisor’s practice is always full. So is mine. And I’ll bet that at least part of the reason is that people feel comfortable working with us. That probably outweighs the occasional missed session.

Don’t people take advantage of you? Not really. If someone chronically blows off appointments, I always have the right to check in with them and see if they want to keep seeing me – and if needed, politely move them to one of my “on-demand” slots outside of prime time.

Doesn’t this teach clients to be irresponsible? If anything, my experience is that it teaches them to be grateful – and once in a while, when someone who misses sessions starts making a real breakthrough, I feel really glad that I held my fire.

I even go so far as to sometimes tell some clients, “Your cancellation was awesome” – I got to take a long lunch, or run errands, or catch up on my paperwork. Looking back on nearly five years of sessions, I can’t really think of a time when being easy-peazy about cancellations ever really made things worse.

Now let’s circle this around to your own business. I want you to take out all the rules that you have for your customers, and ask yourselves the following questions:

  • How do customers feel when I enforce this rule? Do I risk losing these customers?
  • How does the lifetime value of a lost customer compare with my fine, fee, or whatever?
  • Finally, how do all of these rules, as a body of work, make my business look? Like a snippy, snively organization to do business with?

Take the time when a credit card issuer took away all of my reward points for the month because, for the first time ever, I was one day late paying their bill after a long travel death-march. And refused to budge when I called them, instead lecturing me about paying on time.

How did this mature, responsible adult react? I cancelled my card and spent tens of thousands of business travel dollars elsewhere. Multiply me by the number of other customers in this boat, times the amounts we spend, and you have a case of the corporate stupids. Even a one-time grace period would probably change their bottom line substantially.

Stew Leonard’s, the store with the highest sales per square foot in the United States, has just two rules: 1) The customer is always right, and 2) If the customer is ever wrong, re-read rule #1.

Your business will prosper by getting rid of many of your short-sighted rules as well.

Article written by
Rich Gallagher is a former customer service executive and practicing therapist who heads the Point of Contact Group. His books include two #1 customer service bestsellers, “What to Say to a Porcupine” and ”The Customer Service Survival Kit: What to Say to Defuse Your Worst Customer Situations,” both released by AMACOM. He has taught over 25,000 people what to say in their worst customer and workplace situations.
 
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