Friday Q&A: Replacement Policy

We recently got a question from Chelsea about what to do when her clients remove Items from Orders at the last minute. Listen in on our response.

How do you prevent clients from reducing their Order size at the last minute? 

QAReplacement

I'm so glad Chelsea asked this question. I'm sure it is stressful to have Orders changing right before event day. I do have some ideas for what to do in response: 

Quotation Marks 1 Before I address this specific question, I would want to know a bit more about two aspects of your business.

Ideal Clients

The first is where your clients are coming from. Are these clients your ideal market? Are they coming through a particular referral source? Is it typical for the majority of your clients to remove tables & chairs at the last minute? Or is this an exception to the rule? Are they working with coordinators who have an expectation that is an acceptable practice?

The reason why I ask all those first questions is to understand if we’re talking about making a policy that will weed-out/exclude people you don’t want to be working with? Or do you need to shape your policies to fit what your target market is looking for? Does that make sense?

If you find this happens with mostly clients who aren’t your “ideal fit,” then I would consider sticking to a firm policy (I’ll discuss your options below). But make sure you explain it verbally upfront during your sales process.

If you find this happens with particular coordinators, maybe the issue is education. Perhaps you need to set up a time to meet with them (to show them your 2019 price list or new inventory or whatever excuse you can use to get them in for a friendly meeting in your warehouse). While they are there, you can explain your policy (in friendly and kind terms so they don’t get offended) and help them understand how your policy is actually in the best interest of their clients.

If, however, this is happening a lot and often with clients who are your “ideal fit,” I’d think about what you’re losing if you don’t enforce your policy. For instance, if you allow people to reduce their quantities with no consequences, does it prevent you from being able to rent those pieces to other people? Or is your collection such that you typically wouldn’t rent those out anyway? Or is it just that you feel like money was left on the table?

I guess I’m suggesting that you step back and think about why you have the policy in the first place. What are you trying to get your clients to do? Spend the same amount of money that they commit to upfront (because you’ve staffed for certain size Orders, planned your year based on projected income, etc.)? Or is it that the inventory could have been rented by someone else if they had let you know sooner? Or is it just annoying that they let you know so last minute and you’d like for them to tell you their final numbers sooner?

Knowing what behavior you’d consider a “win” is a key to knowing what policies to have and when/how to enforce them.

Order Size

The second aspect of your business that I would like to know more about before addressing the question head-on is the size of your Orders. Are you currently happy with the size of your rental Orders? Or are you struggling to get them to the quantities/ dollar values that are ideal for your business? If you are happy, then I think addressing this issue is a good place to spend some time and energy.

If, however, you aren’t hitting your target Order sizes, I’m not sure that I would spend a ton of energy focusing on this problem immediately. Don’t get me wrong; I think that if you have policies, they should be thoughtful and enforced consistently. But if the problem is that you feel like people shrink their Orders at the last minute and you were counting on that table and 10 chairs to make your target revenue goals, I think this might be the wrong place to solve that problem.

Instead of focusing on preventing people from removing Items at the end of their rental process, it might be more valuable for you to spend time at the beginning of the sales process increasing the Order size. For instance, showcase lounge groupings (in your marketing, insta, “packages,” and highlighted past Orders) that exceed your target Order size. If you have a goal of an average size of $XXXX, make sure the things you point out to your future/potential clients are at or over that price point (include seating for 12 rather than 6, include pillows, rugs, etc.).

Employ suggestive selling practices after the client books to get them to increase their Order size before the event. Send personal emails showcasing new inventory and how they might use it in their celebrations. Raise prices for certain highly utilized pieces so you make more money on the things you know will rent. Consider other methods for increasing that average Order size.

If you can strategize some ideas for increasing your initial Order size, you may feel less pressure to keep the extra table and 10 chairs on the Order at the end… and instead accept it as a cost of doing business. Does that make sense?

Policy Guidelines

If you do decide that you need to focus on making and enforcing a policy for removing items before the event, your policy will need to include the following elements:

a. In what circumstances can items be removed?
b. In what circumstances can items be substituted or exchanged?
c. What is the last date to remove items?
d. What is the last date to add items?
e. What kind of cancellation fees and/or rush fees will be charged? At what point(s)?

You suggested a few options for how to answer these questions. My rule of thumb for this sort of policy development is “what will be easiest to communicate and enforce?” You can come up with percentages and cut-off dates but if it adds more stress and to-dos for your team at the last minute, they may not actually get done or may end up costing you more than you collect.

Personally, I would be as generous as possible while keeping an eye to practices that are sustainable for my business. I’d probably do something like:

  • Items can be removed up until 30 days before the event with no penalty
  • Within 30 days you can exchange Items but you can’t reduce your Order Total
  • Final balance due 14 days before the event
  • Reducing or removing after this point is subject to full charge
  • Adding items within 7 days is subject to a rush fee of ___%

But if you feel comfortable with 14 days instead of 30, that’s fine. Whatever you think would incentivize your clients to do what you want them to do (not remove items, settle their final numbers earlier, etc.). You don’t want to just have penalties that punish your clients. Instead, you want to nudge them to do what you want.

So, the key to the success in any of this is COMMUNICATION. You should be verbally explaining this policy to your clients before they confirm their Order. It should be in your terms & conditions. You should be sending reminder emails 5 days before the 30 day mark to say “you have 5 more days to revise your Order before it becomes set in stone” (in friendlier words of course). And 3 days before the final payment is due, you should be emailing and/or calling to remind about the upcoming payment, confirming delivery details, quantities, etc.

Be proactive. The more proactive you are, the more you’ll feel like you are in control of the process and can nudge your clients to do what you want them to do when you want them to do it. Rather than feel like your clients just walk all over you.

Does that all make sense?

I hope that helps!Quotation Marks 2

Let us know if you have any questions for us to answer in our Friday Q&A. Shoot us an email at rw@rwelephant.com. Happy renting!

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