two ways of looking at it. First is that what I figured out pretty quick is that if you're constantly hammering away at your business model to make it custom fit each customer, it's not going to work. You'll make yourself nuts and still not satisfy the customer. So do you have an actual business model/policy that you can refer back to? Or is it just "not what this lady wants"?
Second, money's money, and you've had a long-term relationship. Would there have been an opportunity to say "I've refined my business plan and if you want to continue working together this is how it has to be"? Most people who've never run a service business don't understand how badly a last minute cancellation jacks with your schedule (and revenue). I do a little maintenance for a select few clients and I've told them that if I put them on the schedule, I need 72 hours cancellation or they're still on the hook for a four hour minimum plus a rescheduling fee.