The impact of no-shows
"We only have 60-65 seats, so if 10-12 people don't show up, the profit gets thrown out the window"
-Joel Best, Sydney Morning Herald
On average, 20% of diners fail to turn up to their booking.
And, as you can see from the restauranteur's quote above, the industry works on fairly small margins.
The cost of no-shows to UK pubs and restaurants is estimated at £16 billion a year.
By understanding why no-shows happen, and the methods we can try to combat them, certainty can be brought to your venue.
Why do no-shows happen?
First, we need to understand why customers don't turn up.
According to an anonymous survey by Carbon Free Dining:
45% can't find cancellation information
27% are not bothered to
18% forget
9& book several venues
But these four reasons don't explain why customers fail to cancel their booking.
Could it come down to one thing?
Generally speaking, we all hate to let people down, so perhaps it's this fear that's preventing customers from cancelling their booking...
Common methods to combat no-shows
To combat no-shows restaurants would charge a deposit or charge a no-show fee.
For example, Gordon Ramsay Restaurants charge a £150 no-show fee.
Though, these practices could create a lack of trust between you and your customers which could potentially put them off booking in the first place.
Because of this, some venues turn to calling up the day before to confirm the booking, however, this is very time-consuming for your staff, with the cost being at least 40 minutes of labour.
So, what can we do?
Methods to combat no-shows
1.Technology
A way to help your customers avoid the fear and embarrassment of calling up to cancel is to create email/SMS reminders with cancellation prompts.
This will require a modified booking system but would be worthwhile.
Some suggestions:
Lightspeed
Restaurant Live
SimpleERB
Tablein
By simply being able to reply 'cancel' or click a button, you provide a hassle-free, easy solution for customers to use.
2. Reassurance
Through showing reassurance and empathy, you resonate with customers and show that you welcome cancellations.
A simple way for you to do this is by adapting your website copy to be reassuring...
"We know how it can be, not all plans go ahead, and if this is the case with your booking, no worries. Simply give us a call or fill out the form below."
By providing an alternative to a phone call, customers who feel embarrassed can avoid human interaction by filling out a quick form.
3.Incentives
Incentivise your customers to cancel their booking if they're unable to attend...
"If you're unable to make your booking, call us to let us know or if you fancy a challenge, try to relocate your table to friends to receive a 15% discount on your next meal!"
This not only encourages them to cancel, but it could result in you keeping your booking whilst also incentivising them to come back.
4. Flexible cancellation
The number of restaurants seeking some form of financial security has increased by 40% over the past year and could now be higher given our current climate.
For better financial security, restaurants could offer a flexible cancellation option where customers provide their card details and have 1 week prior to the booking to cancel otherwise they get charged £x.
Rather than seeking a booking deposit, this creates a balance and some trust between you and the customer.
5. Run a waitlist
There is nothing worse than having to turn down customers and then not have your booking turn up.
However, you can combat this and its effects of a loss of revenue, empty tables, and unhappy customers, by creating a waitlist.
Ask customers who come in for their name and phone number, and let them know that there's a short waiting time.
And if you advertise the waitlist by letting customers know that there booking will be given away after 20 minutes, you can help combat no-shows by offering the tables to your waitlist.
So, what would work best for you?
Ideally, a combination could work best.
There's no harm in creating reassurance, and if you tie this in with incentives, you could create a stronger relationship between you and your customers.
If you then marry this with text/email reminders, flexible cancellation and a waitlist, you're guaranteed to see some changes.
Extra tip:
Keep track of no-shows, if certain customers repeatedly fail to cancel, consider restricting them or ask for a deposit!
How LUX can help
Through our reward scheme, customers dine at our partnered venues to achieve points and earn rewards.
And whilst this may not directly help you combat no-shows, we do help you encourage loyalty by changing the behaviours of your consumers in 3 ways:
Repeat custom: by recognising and rewarding customers for their repeat spend, they will exhibit “behavioural loyalty” to earn these rewards.
Analysing and utilising data: using a loyalty programme allows you to harness more information about your customers that you can analyse and use to market more effectively to them.
Create a point of difference: as diners are incentivised to choose from a smaller pool of restaurants, our loyalty scheme provides your business with a unique way to stand out from your competitors.
If you would like to discuss the effect of no-shows on your venue or would like to know more about LUX, please contact me at james@luxrewards.co.uk
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