Collecting money from clients when they cancelled with short notice.

[Allied]

Hi

Charging up front or a set of lessons is the answer I believe, maybe by the month. I did this for years for my daughters art lessons, we also got a small discount.

If we genuinely had a reason why we couldn't come e.g. holiday etc we could pay for certain lessons for that month still at the reduced price. The teacher was very popular, the classes full with limited places was the explanation given when we signed up. At the end of each month she would hand a reminder to the students to hand to their parents to sign for the next month and the dates for lessons and amount "Due by". we wanted her and were more than happy to pay this way. It was all very friendly and we understood it was her living not a hobby. You won't lose clients that really want to be there, its a bit tougher at the moment because of the economy putting pressure on these activiites. If worded properly with a brief explanation as to why you have these terms it will be accepted. Everyone knows you don't go into a shop and take goods without paying for them - so why should they book a service and not pay for it either. You will like your business better when you have your payments sorted too.

[Matt Hanson]

Originally Posted by Allied

Hi

Charging up front or a set of lessons is the answer I believe, maybe by the month. I did this for years for my daughters art lessons, we also got a small discount.

If we genuinely had a reason why we couldn't come e.g. holiday etc we could pay for certain lessons for that month still at the reduced price. The teacher was very popular, the classes full with limited places was the explanation given when we signed up. At the end of each month she would hand a reminder to the students to hand to their parents to sign for the next month and the dates for lessons and amount "Due by". we wanted her and were more than happy to pay this way. It was all very friendly and we understood it was her living not a hobby. You won't lose clients that really want to be there, its a bit tougher at the moment because of the economy putting pressure on these activiites. If worded properly with a brief explanation as to why you have these terms it will be accepted. Everyone knows you don't go into a shop and take goods without paying for them - so why should they book a service and not pay for it either. You will like your business better when you have your payments sorted too.

First of all, thank you to all who have dropped in with some input. So far it is all great, and much appreciated.

Since I have started to implement some of my changes by providing notice of my new policy starting early next year (first lessons in February), I have had a few questions come to mind.

• Some students already pay the full fee upfront. No change necessary for them.
• Others are on an older fee, so fees are going up and must be paid weekly. I expect to lose a few students.
• Others do hour long lessons and I fear asking them to pay two months at a time, because the amount is a lot. I have tried to avoid difficult pricing structures and discounts (previously this has been a headache), but maybe for the hourly students it might be a possibility. Perhaps allow hourly students can pay weekly? But I might just be letting myself slip into the current flaw in my system again...

What do I say when the average student wants to go on a 3 or four week holiday in the billing period but I am taking payments upfront and no cancellations?

They shouldn't pay for a couple lessons if they provide me with adequate notice, yet if it is for a long time and I can fill their spot I should be able to do so.

All in all, I'm looking forward to getting more time on my hands, because I've worked out I'm working for more than I'm getting paid for and I'd rather use that time to work on my business not reading for 5-10 mins waiting for them to not show up! Also my rise in fees looks to be closer to the standard rate in my area.

[Striking Stitches]

It seems that paying in advance a month at a time is a good way to go.
Those that value your service will find a way to do it.
Perhaps this is a good time to have a slight price increase, and then offer a small discount for those that pay in full and on time. ?
For those that might struggle with paying a lump sum, perhaps ask them to set up Bpay or direct debit payments. It's not a guarantee that the money will always be there but it might meet both your needs, and theirs.
Good luck!

[Matt Hanson]

Hi every one

Since my new policy is in effect (as of tomorrow) I have been receiving some very negative feedback.

The new policy included in it 'no cancellations under any circumstances'. I was lucky today to phone a student who intended not to return without telling me... They didn't think they could make all the lessons and weren't willing to pay for a missed lesson.

I quickly reworded my policy to include (in writing) my catch-up lesson policy.
My policy states, you need to try get a make up lesson or you forfeit your fee. This was previously written as part of my terms and conditions, but was become verbal only. My terms and conditions were becoming a bit more staunch in writing.

As soon as I removed that and included my policy for catch up lessons, I got a new student inquiry.

They began asking me follow up questions relating to that.

They are asking what if I cant get a make up lesson within a week can it be within two or three weeks. At this point I just wondered how far am I going to retreat before I end up back at my old policy (the one where I wasn't being paid for my time)?

My policies previously never were questioned. It seemed easy for people to agree to them. Now I am beginning to wonder if - because of my professional looking site, and/or perceived size of business- people are treating me harder than the average solo music teacher in my area.

Local music shops and musicians are impressed with the number of students I have weekly, and I wonder if my numbers are due to my previous policies. Perhaps my more professional policies will see a rise in people turning away and trying to barter me down. In which case I dread more of the same phone calls I had today.

I guess it's called work for a reason. Can't complain, really. I love my job.

www.mattsdrumlessons.com.au/fees

I appreciate any feedback.

[Pace]

One of my clients who I do accounts receivable for has a strict 24hours cancellation policy and clients have to read a Conditions of Service and sign before starting with the business knowing that if they cancel in that 24hr window (and it's not family emergency or sickness related) they are charged the full fee.

I think you need a clear "policy" on this and it needs to sit-well with you otherwise you won't feel the confidence to follow it through with your clients.

What about starting a-fresh and getting a short (only a paragraph or 2) together about Conditions of Service and have clients sign this (existing and new) that you are collecting 1 extra payment on their next invoice that will be kept as a deposit in case of missed appointments?

That way if they miss the app or cancel at short notice, they know about and have signed that the deposit is lost?
I'ts likely that if that happens once, they won't cancel with short notice again - and you could add that "deposit" amount straight back to their next invoice to replace the "deposit" they used when cancelling in that 24 hr window last time?

Just at thought - am sure there will be heaps of cool ideas here and whatever you decide it has to sit-well with you otherwise you won't have the confidence and conviction to follow-through with your "policy".

Rachel
Pace Administration
www.paceadministration.com.au

[Pace]

Sorry Matt, just read all the replies after already posting and now want to post again
That is unfortunate that you feel you're being dragged back to the way things were before and it's worth mentioning that it's likely your existing clients who will find it difficult to change, new client's probably won't bat an eyelid at your policies and feel they are quite reasonable, people often don't cope well with change

It's worth mentioning that often it can be in the way things are worded. For a policy I did for a client recently on implementing a new payment structure that was different to the way her clients had paid before, I gave her clients 2 options and they could choose which suited them best.
eg: (A) you can phone us the day before and pay with a credit card over the phone or (B) you can bring cash along to your appointment and leave it with us

Even though neither was expected before and clients were just taking home an invoice (and accumulating them I might add and why wouldn't they - my client wasn't EXPECTING anything more of them) now by "offering" them a choice they don't feel as though things are totally out of their control.

It's also worth mentioning that is there someone that you can have as a scape-goat for your policy?
so, you can have it worded in the third person and have it signed off by your Business Manager or something? I don't know if that sounds sneaky or something to you - like I said whatever you decide has to sit-well for you.

I would like to see a copy of your contact and service requirements if you want to email them to me I'd be happy to have a look and see if the wording could be altered a bit? I don't mean that you haven't done them perfectly or anything - you may have had them professionally put together - but it's just a thought, it would be for free obviously.

I understand how frustrating it must be for you, particularly since I have done this recently with a client of mine and venturing the rocky road of change - feel assured that you're not alone but it does sound like your probably lovely and friendly and fabulous clients are taking advantage of you a bit... if I can be so bold as to suggest that

Rachel
Pace Administration
www.paceadministration.com.au
rachel@paceadministration.com.au

[Matt Hanson]

Hi pace,

thank you for your input.

I'm not sure if you mean something else by contact and service requirements, but all I have is the terms set out on this:

http://www.mattsdrumlessons.com.au/fees

and I get them to sign their name (and date etc) when they enroll at their first lesson. On this enrollment form they sign that they have read and agree to the terms and conditions.

[Pace]

Hi Matt, you cover about everything and the fees and terms & conditions is really comprehensive which is great!

I've quickly typed up a variation for you (you don't have to use it but perhaps it will give you some ideas) with grouping together similar terms and wording it a bit more forcefully I've emailed it to you now.

I think you have covered most things - I think your problem... and by problem I mean your clients taking advantage of you a bit - must be coming down to your delivery of the terms or your conviction to stick to them.

You will have to re-iterate and remind people of the terms often cause people often sign without having really read it and even if they have, they'll forget but as long as you feel the terms are fair then don't take it personally that they are trying to wriggle out of some of them, often they will have just forgotten what they were.

Be firm and ask them to have a look back at their copy of the terms if they seem to be trying to change them to suit themselves (everyone should be taking home a copy of them when they sign).

Hope this helps.
Rachel
Pace Administration
www.paceadministration.com.au
rachel@paceadministration.com.au