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In the fast-paced and competitive world of salons and beauty businesses, finding the right scheduling software can be crucial for streamlining operations and maximizing efficiency. Many software providers offer a free model, which claims to be a cost-effective solution for businesses. But is free scheduling software too good to be true? In a word, probably.
It’s an attractive option, but free software often comes with a host of hidden costs. In this blog post, we’ll explore the hidden drawbacks of these supposedly “free” solutions and shed light on why they can end up costing you more than you might think.
But, if you want the short answer, here it is. Free solutions will often cost you via…
- Commission charges
If you don’t pay a monthly fee chances are you’ll pay via commission charges
- Other hidden fees
You might also have to pay online booking fees or processing fees
- Limited features and functionality
If something is free it’ll do the basics, but probably not everything you need
- The need for more tools and tech
If one software doesn’t do it all, you’ll have to budget for additional tech
- Unpredictable monthly costs
Don’t use commission-based software if you want to forecast monthly outgoings
- Disagreements over “new” clients
What is a new client? This definition can hit you where it hurts – your bottom line
- You won’t actually want to use online bookings
Commission-based software fees may make you want to find alternatives to online booking
Over two thirds of US clients use a commission-based software
According to a survey conjured by another software provider, 68% of salons and spas in the United States use booking software with a commission fee structure. According to their research, these businesses pay a commission of 5.5% per booking. However, according to our own research, commission charges can reach significantly higher than that.
So, it’s a business model that’s clearly popular with over two-thirds of salons and spas. But it’s also a solution that comes with a sharp sting in the tail. Is the best option? Is it better for smaller businesses that are just starting out? And does it work across different sectors or business types? We‘ll dive into all of these details over the course of this blog.
7 hidden costs of free scheduling software
1) Commission charges
Let’s start with the big kicker when it comes to “free” scheduling software – commission charges. While these tools have no upfront costs, the main way that they do make money is by charging a commission for each new client that books an appointment through their platform.
For example, you might be required to pay anything between 20 and 35% or more of the total appointment price from clients booked through the software. These platforms effectively penalise you for being successful. As your business grows and you attract more clients, you may find that those hard-ball commission charges eat into your hard-earned profits.
Consider a scenario: suppose your salon acquires 50 new clients in a month with an average service value of $50. If the commission rate is set at 20%, you would end up paying $500 in commissions for those new clients alone. As your client base expands, these charges can accumulate further, making the supposedly “free” software a costly investment.
2) Other hidden fees
Aside from commission charges, there may be additional hidden fees associated with “free” scheduling software. One common fee to watch out for is the online booking fee. Some providers impose a fee for each appointment booked through their online booking system, regardless of whether it resulted in a new client or a returning one. These fees can quickly add up, particularly for businesses that heavily rely on online bookings.
Furthermore, inflated processing fees can also come into play when using commission-based scheduling software. When clients pay for services through the software’s integrated payment system, the provider may charge a processing fee for each transaction. These fees are often a percentage of the transaction amount or a flat fee per transaction. It’s important to consider these additional costs when evaluating the true affordability of the software.
Carefully reviewing the software provider’s pricing structure and fee schedule can help you identify any hidden fees and make an accurate cost comparison with other scheduling tools.
3) Limited features and functionality
One big limitation of free commission-based scheduling software is its restricted features and functionality. While these tools may cover the basics of appointment scheduling, they often lack advanced features that can enhance business operations and customer experience.
Free software providers typically offer a stripped-down version of their product and reserve the more advanced features for their premium or paid plans. This means you might miss out on essential capabilities such as automated reminders, integrated marketing tools, client management features, or robust reporting and analytics. Without these functionalities, you may find yourself spending extra time and effort on manual workarounds, which isn’t ideal.
It’s crucial to assess your business’s specific needs and consider whether the free software can truly meet those requirements. If you anticipate growth or have specific operational demands, investing in an all-in-one clinic management solution that offers a wide range of features can save you time, effort, and potential costs. Time is money too, remember!
4) You’ll need more tools and tech
When you use a free, commission-based scheduling software that falls short in terms of functionality, you may find yourself needing to budget for additional tools and technologies to meet your business’s requirements. This can result in added expenses quickly mounting up.
For example, if the software lacks robust inventory management capabilities, you may need to invest in separate inventory management software. If you require staff scheduling features, you might need to explore dedicated employee scheduling tools. If you need emails or SMS or consultation forms and waivers, you’ll have to plug these into your existing system.
All of this can turn things a bit janky. It creates complexities in your workflow, integration challenges, and potential inconsistencies across platforms. It may require manual data entry. Plus, using multiple software solutions means you instantly increase your costs, the thing you didn’t want to do in the first place. So is free software really free, after all?
5) Unpredictable monthly costs
One significant challenge with commission-based scheduling software is the lack of clarity regarding monthly costs. Since charges are based on the number of new clients acquired, businesses face significant fluctuations in their monthly expenses. This unpredictability makes it difficult to plan and budget effectively, potentially resulting in financial strain.
For businesses with variable client acquisition rates, this lack of cost predictability can be particularly problematic. Month-to-month variations in commission charges can make it challenging to allocate resources effectively, impacting cash flow management and hindering the ability to invest in other areas of the business. If you want to have better visibility of your overheads, a monthly or annual subscription may be the preferred choice.
6) Disagreements over “new” clients
Want to spend your time quibbling over what constitutes a new client?
This is another challenge of commission-based software. There’s a lot of ambiguity surrounding what constitutes a “new client”. Some providers may have complex criteria that determine whether a client qualifies as a new or a returning customer. This lack of clarity can lead to disagreements over charges, creating unnecessary complications for businesses.
For example, a customer who had an appointment six months ago but hasn’t returned since may be classified as a new client by the software provider. However, from the business’s perspective, this individual is a returning client, and charging a commission fee for their booking would be unfair. Such discrepancies can strain business relationships and waste valuable time and energy in resolving billing disputes. Do you really want to do that?
7) You won’t want to use online bookings
The purpose of investing in scheduling software is to make the booking process more convenient for both your business and your clients, right? However, when using “free” commission-based tools, you may find yourself hesitant to encourage clients to book through the software.
Since each booking comes with a cost, you might prefer clients to book through alternative channels, such as phone calls or walk-ins, to avoid additional commission charges.
However, this defeats the very purpose of having an online booking system in the first place. Online bookings offer benefits such as 24/7 availability, reduced administrative workload, and improved customer satisfaction. Additionally, 40% of online bookings are booked after work hours and 67% of patients prefer online booking. If you end up switching off the online booking system, not only is it more work for you it’s also a lesser experience for potential clients.
You miss out on these advantages and end up with a scheduling tool that fails to deliver its intended value. So what’s the point of having a scheduling tool in the first place?
Are “free” tools ever a good idea?
In the interest of balance, let’s look at the other side of the argument. Can free scheduling tools be a good solution for your business? They’re obviously popular for a reason. Here are some scenarios where free scheduling software may be an option you want to try.
You’re just starting out
Maybe you’ve just started your business or want to move away from pen and paper. Perhaps you’re not sure how much you’ll use a software and you want to try before you buy?
In these instances, free plans can help you get a feel for a software without a monthly or annual contract. The fact that you don’t have to commit to a contract means you can switch to another solution quickly, without feeling too entrenched or ‘stuck’ within a system.
You have a limited budget
For new businesses or those with small budgets, free scheduling software can be a practical solution. When you’re in the early stages of establishing your salon or beauty business, investing in expensive software may not be financially feasible.
Opting for free scheduling software allows you to get started quickly without incurring upfront costs. However, remember everything we’ve said about commission fees and make sure you read the small print. Despite what they may claim, you will still incur costs.
You only want to do the basics
If your business has relatively straightforward scheduling needs and you’re primarily focused on basic appointment bookings, free scheduling software can be an OK choice. You can make use of their core functionalities and do the basics to a reasonable standard.
However, it’s important to consider whether the software’s limitations align with your long-term business goals. As time goes by, you may find yourself outgrowing the software and needing additional functionality to enhance operations and improve customer experience.
Your services aren’t expensive
When your highest-priced treatment is $50, commission fees can hurt. When your highest-priced treatment is $500, it’s an eye-watering dent in your revenue. Perhaps that’s why commission-based scheduling software tends to be in the hair and beauty sector.
In the medi aesthetics space, it’s a whole different ball game. Commission fees will be a lot higher because treatments are a lot more expensive in general. Of course, everything is relative, but there’s a LOT of potential revenue to be lost in commission fees.
In conclusion: “free” isn’t always free
In conclusion, while free scheduling software may initially seem like an attractive option, it’s crucial to recognize that “free” doesn’t always truly mean free. The hidden costs associated with commission-based models can have significant financial implications for businesses.
Of course, the ability to unlock key scheduling features without having to pay costs upfront will always appeal to some business owners. If you’re just starting out, you only want the basics, or you can make peace with the commission charges because it’s preferable to a fixed charge, then that’s your decision. As we explained, free can make sense in some scenarios.
But there’s a but…
However, it’s essential to go into it with your eyes open and READ THE SMALL PRINT. The sting of commission charges, potential disputes over defining new clients, and unpredictable monthly costs can all add up to hidden expenses and operational challenges.
Remember, it’s not just about starting with a low upfront cost; it’s about finding a scheduling software that you can trust with your business. One that offers the functionality, scalability, and transparency needed to thrive in the competitive salon and beauty industry.
