How to Tell Customers Bad News
Whether you agree with Lanny Davis’ politics or not, he has some excellent insights when it comes to crisis management. Here he is, writing for The Impact Lawyers…
When managing a crisis, communication skills are often contradicted by the human instinct to put the best light on bad news. Specifically, there are three natural, human reactions that frequently guide how companies and organizations deliver bad news to customers. The first is that, instead of speaking in plain language, they will try to sugarcoat the bad news. Another natural human instinct is to postpone telling customers what the bad news is, hoping that maybe it will go away on its own. The third human reaction when delivering bad news is to selectively reveal details of the matter, so as to minimize the public impact of the crisis.
Each of these instincts, while understandable from a human’s perspective, can all too often make bad news worse. Over the course of our careers in crisis management, we have learned that all of these instincts are counter to the three best practices for delivering bad news. Those rules can be summarized by the mantra regarding the truth, however tough the bad news is: Tell it early, tell it all, and tell it yourself.
The first step after receiving bad news that customers must be alerted to, is to gather all of the facts about what the bad news is. A company with bad news to give must anticipate every question it will receive from the media and all stakeholders: e.g., customers, employees, investors, suppliers, banks, or if the company is a listed public company, shareholders. Thus, the company must gather all the facts, including the bad ones, and formulate accurate responses to the questions about what happened, why, and especially, what the company intends to do to solve the problem.
For example, suppose a company realizes one of its major products has serious defects and must be recalled. Think of all the different components of announcing that bad news. What is the defect? How did it occur? Why did it happen? What should consumers do? How immediate is the potential danger, if any? And most important, the company must find the underlying facts as to why the defect occurred and explain, credibly, why it won’t happen again. Without answers to each of these questions – and more – the company will be incapable of restoring consumer confidence. Or worse, if it waits too long to provide this information, some other potentially adverse entity, such as a competitor, will, and the company will lose control of the narrative to its detriment.
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