Despite a company’s best efforts, sometimes things go wrong — a flight is delayed, a data breach happens, a negative story circulates about the company. How you communicate the bad news to customers can save the relationship or cause further harm. Below are recommendations on how to best handle this delicate dance.
Be Quick, Be Transparent, Be Clear
“Communicating bad news to customers requires special focus. Handled poorly, it could make a situation worse,” said Mary York, CEO of York Public Relations, a firm that specializes in financial services and crisis communications.
In instances like data breaches, specific details must be communicated and timelines must be followed, York added. “Basically, be quick and transparent. Regardless, these same rules should be applied to all communication.”
Communicating the bad news to customers quickly rather than waiting is the best policy, agreed Eric Fischgrund, CEO of FischTank PR. “One of the initial steps should always be an email distribution, to have something in writing. This email distribution should come from an individual with a title at an organization, not from the company as a whole. The message should focus on a) what happened and why; b) how the customer is or isn’t impacted; c) steps being taken to address the problem or situation for both the short- and long-term; and d) when the customer(s) should expect a follow up from the individual and/or brand.”
Transparency is essential in communicating bad news in any industry, according to Gregory Ng, CEO of Brooks Bell. In the travel industry, this can be accomplished by explaining the reasoning behind the bad news.
“Don’t just tell the passenger their direct flight to Paris got changed to a two-leg connection through Atlanta (a recent travel woe of my own),” Ng said. “Tell them why they had to make the change and explain what they are doing to minimize these types of late changes in the future. You will find out that passengers will be more forgiving when they are clued-in to the 'why,' not just the 'what.'"
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Accept the Blame
Even if it’s not directly your fault, do not shift the blame, York added. Occasionally, an issue might erupt that may not be a direct fault of the organization. This was the case for Tylenol following the 1982 poisoning spree. Instead of pointing fingers, Johnson & Johnson took control of the situation and communicated the bad news in a way that positively impacted its brand. It recalled its products and immediately issued national warnings. As a result, Johnson & Johnson established itself as a drug company that put public safety above profits.
Disclose Next Steps
Don’t forget to say what you plan to do next, York added. Communicating bad news like a data breach or discrimination claim is tough. Customers have numerous questions and concerns that you need to address. But they’re not all short-term concerns. Customers want to know what actions you will take to prevent this issue in the future. When communicating, organizations should outline next steps, offering peace of mind to customers that real action is taking place, and you must follow through with it and provide updates.
Maintain Customer Trust By Avoiding the Spin
“Nobody likes to admit they’ve messed up; but when companies neglect to share bad news with customers — no matter the cause — they run the risk of burning trust,” said Ali Cudby, adjunct professor of entrepreneurship at Purdue University and managing director of Alignmint Growth Strategies. “Undermining trust impacts the customer relationship. That’s because customer relationships reveal how customers feel in their interaction. Research by McKinsey & Co. found 70% of customers’ buying decisions are based on how they feel they’ve been treated by a company.”
The moment customers question their relationship is the moment a company starts to lose long-term customer value, Cudby added. That makes relationships the bedrock of your company’s growth.
The best ways to get bad news out to customers can unfortunately be the most challenging in the short-term but rewarding in the long-term — transparency and honesty, agreed Fischgrund. “Customers are used to spin, but as information is more readily available than ever, spin generally digs a corporate hole even deeper. Companies should always make sure to be informative with their content, genuine with their steps to correct or make it right, and consistent in their follow-up to reinforce both aspects. While bad news can give a customer one bad experience, bad news spun poorly tells that same customer you don't care about them or anything aside from your own corporate goals.”
“Customers realize that companies aren’t perfect. Mistakes are made,” Cudby said. “Communication is your best opportunity to mitigate mistakes quickly and effectively. In fact, when companies resolve issues effectively customers will often become more loyal — and that ties back to feelings.”
Cudby reiterated some of York's advice when it came to communications:
- Be quick. In general, you should know there’s a problem before your customers do, providing an opportunity to proactively manage expectations and the narrative. Instead, companies tend to drag their feet in attempts to solve problems before they have to expose them to customers. The longer you wait, the more customers will discover problems on their own, which means they define the story — not you.
- Be clear. State the problem and the potential impact so customers understand their best path forward. Offer solutions when you can so that customers know what they need to do next to deal with the issue, if it impacts them. Not every piece of bad news requires a mea culpa outreach. Having a designated place where customers can self-diagnose for issues can be helpful. For example, tech companies that have bugs and outages to report might choose to have a status page customers can easily access.
- Be empathetic. Deflate customer ire with empathy. Circumstances vary, and this doesn’t include situations with legal liability, but generally a heartfelt apology for a customer’s inconvenience does wonders. The faster you can make customers feel valued as people, the faster you’ll be able to continue building the relationship.
Recognize the Need to Address Media
“Companies should always assume that crisis communications efforts will reach the media, and that said media may take sentences or fragments of messaging to support/position their journalism," said Fischgrund. "This comes with the territory of running a business, but should serve as a reminder to analyze each sentence out of context so that it represents as close to what they mean as possible. Be thoughtful, be responsible, and remember that consumers have a short memory when it comes to incidents, but a long memory when it comes to individuals and organizations who they perceive as wronging them.”