Sometimes, we have to break bad news. Things happen, despite our best efforts. We find ourselves in the unenviable position of having to tell our audience— our customers— something they definitely don’t want to hear. We mess up, or something entirely beyond our control goes screwy. Whatever the cause, it’s important to know how to tell people something unpleasant. And it’s possible to do so in a way that not only maintains their loyalty, but increases it.
I was first reminded of this topic by something that happened to an entrepreneurial hero of mine, Elon Musk. Musk, arguable genius that he is, is still capable of mistakes. And when the launch of one of his most innovative products was around the corner, he realized he’d made one— a big one. The Model 3, a revolutionary, affordable, hopefully ground-breaking product, was going to be missing something he’d promised.
When pre-orders were being taken for the Model 3, one of the incentives offered was a pretty huge one: free charges for life! Not only is electricity cheaper than gas already, but Model 3 owners wouldn’t even have to pay for that! Supercharging stations located throughout the US and the world were free perks for other Tesla owners, and Musk had announced that the same courtesy would be extended to owners of the more reasonably priced Model 3. As several analysts had predicted, though, giving away all that electricity wasn’t (pardon me) sustainable.
Musk had to renege on that promise with over half a million pre-orders already in place.
The Relative Value of Reputation
How important is it to keep your business promises? Most people would argue “very,” at least. They’re correct, but like most things, there’s a limit. Is it really worth tanking your entire business in order to keep a promise? Will your reputation (or your self-image) really serve you well if your business is bankrupt? Sometimes, you have to disappoint customers by not coming through in the way they expected, or the way you said you would. It can be unavoidable. What matters is how you handle it.
As long as you have the right strategy for announcing bad news and managing the response, your business will come through intact, or better. There are ways to deliver bad news that minimize the impact. These ways don’t just soften the blow. They demonstrate your honesty. Rather than detracting from customers’ trust in you, well-delivered bad news can actually make you more credible. You can keep the trust you’ve earned, and then some.
Tesla’s announcement didn’t hurt sales. At all. There was no revolt from the audience, no wave of cancellations and refunds. This is because the way that Musk broke the news was framed and contextualized properly. He didn’t shrug his shoulders and say “them’s the breaks.” He didn’t beg forgiveness or martyr himself, either. He simply told the truth in the context of Tesla’s overall mission— and made his audience feel like a part of that mission.
Rather than simply acknowledging the screwup, Musk asked his audience to stick with Tesla out of a shared sense of purpose. He reminded them what they were doing when they purchased his product: standing up to the fossil fuel industry and saving the planet by reducing oil dependence. He explained that free charging made that mission untenable, and he was mistaken for thinking it was possible. He asked his audience to make the sacrifice of a few thousand more dollars in order to save the world. By the time he was done breaking the bad news, his average customer would’ve felt like a jerk for complaining!
This wasn’t a case of a rich CEO simply saying, “Hey, I can’t make money if I come through on this.” It was the leader of a movement saying “Hey, we can’t change the world if I come through on this.” He took what he knew about his customers and their reasons for buying his product, and he used it. He remembered what problem he was solving for his customers (in this case, global warming), and reminded everyone that he was still solving it. By letting them in on his mistake and exposing his failure, he made customers more loyal. By asking them to forgive it as an act of purpose, he left everyone still satisfied.
Breaking Bad the Good Way
A while back, I had to break some bad news to my own customers. I had announced that by the end of 2015, WebinarNinja would have a special new feature: full integration with Leadpages and Sumo for creating opt-in pages and boxes. In this case, I thought I had plenty of time to sort out the details and keep my promise. As it turned out, I didn’t. Unforeseen delays on the other companies’ ends made it impossible. Eventually, the feature debuted, but not on time.
Sending the announcement was one of the most uncomfortable things I could imagine doing. Unlike Elon Musk, I wasn’t trying to solve a global crisis. But like him, I was able to minimize the negativity by being transparent and putting it all in context. As long as my reasons for coming up short had to do with solving their problems, my customers would understand. And they did.
When they’re disappointed, some people will be upset. You may get a few demands for refunds or cancellations. Your true fans, however, will stick by you. The ones to whom you’ve been providing rich content and giving wins, the ones whose trust you’ve earned; they’ll appreciate your honesty. You’ve invested your work in them, and they’ll invest their patience in you.
The 5 Steps To Breaking Bad News
Whatever the misfortune you have to explain, there’s a basic system that will give you the best results:
- Be Transparent. Tell your audience everything about why this is happening, within reason. Don’t get overly technical or go over their heads. In layman’s terms, make it clear that you’re not hiding anything, and that you trust them with this (somewhat embarrassing) information.
- Announce the plan. Know how you’re going to fix the problem, and tell your audience. Whatever went wrong, explain how you plan to reverse it and prevent something similar going forward.
- Compensate if possible. Offer everyone affected a bonus, discount, or some other kind of salve for the wound. If you can’t afford to, at least explain that.
- Update. As you move forward and solve the problem, stay in contact with your audience about it. Don’t just apologize and never bring it up again. Keep them posted on how you’re resolving everything.
- Deliver and thank. Once you give your audience whatever it was that was promised, or whatever it is they’re getting instead, thank them. Acknowledge their patience and loyalty, and make it clear how appreciated it is.
Delivering bad news is never fun. That said, it can be a classic “crisi-tunity” to deepen the bonds between yourself and your audience. It will also show you who your true followers are. Like any relationship, business relationships don’t always go smoothly. But overcoming the bumps in the road can make relationships stronger.
It’s one of the least comfortable things in business. We love to satisfy customers; it’s what good business people do. But great business people can turn tragedies into triumphs, and parlay an honest account of failure into stronger bonds. In the long term, that’s how your business succeeds.