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The cost of missed appointments

Luckily, the advent of text and SMS reminders continues to radically improve the efficiency of appointment attendance across many industries, both large and small. However, not everyone is up to speed with the improved technology. It is interesting to investigate just how big an impact the failure to manage and run a prompt and reliable time-keeping scenario has on business and services. In the United Kingdom, small to medium sized businesses make up 99% of the economy, playing a key role in the country's growth and prosperity. Many of them operate with appointment-based systems, and an astounding 40 million minutes every day are spent dealing with "no-shows." This accounts for meetings that are either late or missed altogether, and the time spent re-arranging them. Needless to say, this has a negative impact on productivity across the nation.

The cost of employing an administrator

According to the Federation of Small Businesses (FSB), millions of pounds are lost in revenue through missed appointments. One solution is to recruit a permanent receptionist or Personal Assistant (PA). However, the average annual salary cost of £24,644 for such an employee is much too high for many small enterprises. Sole operators and the self-employed are especially vulnerable, as for them time really is money.

In the healthcare industry, 19 million unattended appointments per annum amounts to losses of £162 million, or the annual pay of 7,000 nurses. The National Health Service has reported that 61,000 patients every day miss their GP appointment. These are known as DNAs, which stands for Did Not Attend. All that lost time equates to a year's worth of work for 1,300 doctors and has the knock-on effect of extending waiting time for others. A study of 20,000 patients by Barts Health NHS Trust found that the average appointment cost £160, in staff and buildings, regardless of whether the patient showed up or not.

When they instigated a programme of informing patients of this figure, by means of a reminder text message, the missed appointments fell by one-quarter. Knowing how much the wasted slot would cost the health service appeared to have a directly positive effect on attendance. Making people aware of the true cost of services and products is clearly a useful strategy, and the SMS message has notable benefits.

Curiously, the wording of the text message relating to specific costs was shown to be critical in a further study done by Wirral Universities Teaching Hospitals Foundation trust. They used behavioural psychology and heuristics to "tweak" the words used. An "empathy" appeal, asking recipients to respect the fact that others were waiting, and to be fair to them, had less of an effect than a direct focus on the wasted money. This simple and subtle rephrasing was attributable to reducing missed appointment rates.

No-one home

Businesses that rely on meeting customers at their home, such as electricians or plumbers, or those who need to make deliveries, are among those losing £53 billion a year, due to people not being in when they call. This is not down to any bad intention on the part of the client. 28% of customers when interviewed said they had simply forgotten.

In retail, 21% of all home deliveries are unsuccessful. Each failure is thought to cost £151, on average. According to the Office of National Statistics, weekly online spending has increased by 20% since last year, so these supply-chain inefficiencies cannot be ignored. 68% of retailers have decided to either introduce or to improve their SMS communications with customers. Lack of communication regarding delivery times is perceived to be a major issue, and texting is seen as the most reliable way to smooth the transaction process. A delivery driver has the option to reconfigure his route if he knows the precise timing he will find someone on site to take receipt. Customers much prefer to have a confirmed time slot for their deliveries and then they can make adjustments to their other commitments, or arrange for someone else to be available. It takes all the guesswork and exasperation out of waiting around all day for a parcel.

Calculate the costs

To gain an understanding of how much missed appointments may erode the profitability of a small business, take the example of a hairdressing salon. As a starting point, it is necessary to establish an average price for a hairdressing treatment. Let's say this is £50 for a cut and blow-dry. If the salon has five stylists working there, and they each take on 10 customers a day, the expectation is that 50 heads of hair will be tended to. Now we add in a small margin for no-shows, at 10%. This accounts for one missed appointment per stylist; perhaps on the face of it, this does not seem too drastic. The hard-working hairdresser can take an extra break, and they still have nine other jobs on their list.

If we then go on to extrapolate, the five missed appointments at £50 each amount to £250 for that day. A hairdresser is usually open six days a week, so 250x6 = £1,500. A loss of £1,500 every week is quite considerable. With 24 working days a month, that figures grows to £6,000 and multiplied by 12 for the year that comes to a staggering £72,000. These figures are bad enough, but they are not the whole picture. There is the time spent on re-scheduling, the hassle of someone turning up late and trying to re-adjust the timetable, and the payment of staff who are spending time doing nothing when they should have been generating more income. The bottom line of the business is hit hard by all of these factors. It is reasonable to surmise, that in the private sector, the ongoing costs to businesses from missed appointments is extraordinarily high.

Cost-effective stop to lost revenues

Few people ever walk out of the door these days without their mobile phone. A text message, unlike an email, is usually read straight away. As long as it is used with permission, a text is a highly reliable, non-invasive and sensible way to communicate. A study done by Imperial College London in 2008 found that SMS reminders for ophthalmology outpatients improved the rate of non-attendance by one-third.

Consultants Influence at Work have used persuasion science to change people's commitments to attending their appointments and their studies have been published in the journal of the Royal Society of Medicine. These insights can not only improve attendance, they can affect such behaviours as voting, recycling and even reusing towels in hotel rooms. Their work with healthcare workers to communicate with patients about no-shows reduced DNAs by 31.4% with resultant savings. The interventions themselves cost nothing to utilise.

The way forward for missed appointments

It will never be possible to prevent some level of last minute cancellation and the logistical headaches, employee frustration and loss of revenue they cause, but it is definitely possible to mitigate the damage. Automated customer communications have been proven to dramatically reduce the numbers of missed appointments in many workplaces. People are inherently forgetful and they really appreciate a pre-warning or reminder. This then gives them the opportunity to reorganize, if not convenient, and saves time and money for both parties. Wasted journeys can be prevented, downtime can be used constructively and cancellations can be converted into new opportunities.

The beauty of a simple text message is not only that it is a very cost-effective solution to the problem of missed appointments, it also builds customer satisfaction. From the enormous potential savings to an institution like the NHS to any small business from a driving instructor to a personal trainer, yoga teacher or vet, all sectors stand to benefit.

Case study

Dentist Kevin Morgester  eliminated 90% of the "no-shows" in his practice by adopting a method of three automated reminders per appointment. He sends them out a month, then a week, then one day before the scheduled date. His patients have ample time to change or cancel the time, and the result is an unqualified success. Considering the phenomenal losses involved in the costs of missed appointments across the entire business spectrum, it is inspiring to know that the simple expedient of an SMS message can, as in Morgester's case, completely reverse the damage.