Dear Customer: I Have Bad News
Introduction
The day will inevitably come when we have to tell our customers bad news — whether it’s a price hike due to inflation or a service being discontinued for one reason or another. At that moment, we have two choices: act with cold detachment and absorb the consequences later (which can be very painful), or act wisely so the impact of the news lands more gently on customers.
The cover image is a screenshot from a one-minute video clip released by a Japanese ice cream company, in which the entire staff apologized for raising the product’s price by the equivalent of nine cents — note that the price had been stable for twenty-five years. They made the video exactly one minute long, with a solemn tone, as if it were a moment of silence in mourning and grief over making this decision.
One Type of Bad News: Price Increases
There are situations where price increases are unavoidable, especially when a government lifts fuel subsidies, which raises companies’ operating costs, lowering profitability and forcing prices up to compensate. Another example involves the introduction of certain taxes (like VAT). Although these are inevitable, and although many customers expect prices to rise as a result of higher fuel costs, that doesn’t mean prices should be raised abruptly without notifying or explaining anything to the customer. At the end of the article you’ll find a hypothetical apology letter on this topic.
Recently, Saudi telecom companies applied a fair-use policy on unlimited package subscribers, even though existing contracts didn’t include such a clause. How did customers react? Wouldn’t it have been better for these companies to notify customers of their intent to apply the policy at contract renewal, rather than enforce it immediately? Wouldn’t it be more appropriate to launch awareness messages explaining the benefit to all network users and clarify the purpose of the policy with an awareness video showing how some users’ abuse affects everyone else? What if that video included some statistics on global usage rates? And how would customers respond if it were followed by short awareness clips guiding internet consumption and educating people about internet addiction — for which specialized centers and associations have been established globally? Wouldn’t a decision like this, even if it took effect immediately, land more gently on customers after such efforts from telecom companies? I’ll leave that question for readers to reflect on.
General Advice on the Best Way to Apologize / Notify
Don’t Assume
Don’t assume your customers are all at the same level of knowledge. Don’t assume they’re familiar with every detail of government decisions, or at least with the impact those decisions have had on your business and profitability. You must take responsibility for explaining this to them with complete transparency. The more the customer senses your genuine need to do what you’re about to do, the better they’ll accept your honesty. Conversely, the more they sense you’re making excuses and shifting blame, the greater their resistance will be. So tell the customer the bad news and explain why with complete transparency (why you were forced to do what you’re going to do). Remember: honesty is salvation.
Don’t Ignore
Some think ignoring the customer is a solution. The book The Experience, which details Disney’s customer experience, says on page 98: “There is really no greater insult to a customer than the feeling of being ignored.” Don’t assume the customer will forget over time and play dead, as we say colloquially. Don’t let your customers unload all their anger and frustration on the frontline employees who absorb the shocks — you’ll lose both your customers and your employees.
Empathize With the Customer
Even if the issue is outside your sphere of influence, show some empathy. Tell the customer you feel for them, that you’re sorry for what they’re going through, and they’ll accept this empathy as an apology. A short story: a while ago I made an international wire transfer, and it came back due to an error in the recipient’s account — but it returned short by about $100. I complained, knowing in advance that it might be fees deducted by an intermediary bank when returning the funds. The employee called me to explain that very point, empathized with me, told me he felt for me, and that they were looking for a permanent solution to this problem. I understood and recognized he had no recourse. But if he hadn’t empathized, I might have pushed back, escalated, and wasted both my time and theirs.
Defer Responsibility When Warranted
If fulfilling the customer’s request is outside your scope because it relates to a regulator’s policy (such as the Communications and Information Technology Commission with telecoms, or SAMA with banks), then attribute the matter to that regulator and show the customer proof so they don’t think you’re just deflecting. This differs from blame-shifting because here you’re giving the customer a reason to believe your claim that the matter is beyond your control. Nothing prevents you from tallying claims or objections regarding the decision’s impact and sending a report to the responsible authorities — your duty is to communicate.
Don’t Raise Expectations
If a customer demands something, don’t promise to do it or even promise to “look into the matter” just to buy their silence under the assumption that it’s a passing tantrum. A short story: someone once told me a customer was complaining that I had broken my promise when I told them, “God willing, we’ll make sure you’re satisfied.” I told him: the customer has the right to complain because you were the one who raised their expectations with an open-ended promise.
Offer Multiple Alternatives
Offer one or several options to anyone who doesn’t accept the change. Be careful not to fall into the earlier trap of asking the customer, “How can I make you happy?” — because they may come back with an impossible request. Better to agree on the available options with all stakeholders in advance. Some companies offer proactive options by analyzing customer usage/consumption habits and suggesting alternative packages or products that meet the customer’s needs while keeping them satisfied.
Some practitioners give the customer the worse alternative first, then tell them they’ll try their best to secure a better option — this happens with airlines, where the employee might tell the passenger, “I’ve canceled the flight and the next available one is in two days, but I’ll try to find you a seat on a flight leaving in 12 hours.” Psychologically, the customer accepts the lesser of two evils. Of course, in cases like this the better option should actually be available, not just possible. With that said, this method falls under ethical scrutiny in terms of professionalism.
A Hypothetical Apology Letter Regarding a Price/Fee Increase
Dear customer, we are always committed to delivering a certain level of quality, and this requires raising prices/fees starting January 1, 2018, due to recent decisions related to lifting fuel subsidies and applying VAT, which will directly affect our operating costs and sustainability. Although the matter is beyond our control, we ask you to accept our apology. In our commitment to your satisfaction, we are pleased to share this increase with you so that our prices will rise by only 30%, and we will absorb the remainder out of our profitability. We share this notice with you in the spirit of transparency, and we ask for your understanding. For any feedback, please contact… [phone or email].
The more such messages are supported with numbers, the better. If it includes some infographics showing the change to the business model and its sustainability, even better. This is just a suggestion you can enrich by reflecting on the advice in this article.
In Closing
Always remember that the reaction isn’t about what you say so much as how you say it. Take a step back, put yourself in the customer’s shoes, and think about what message and method you would accept from a service provider in their position. Then act accordingly. Wait — check yourself one more time: imagine the person you’re about to tell this news to is your mother. Would your response change? Now you’re ready.
And since we’re heading into a confirmed period of inflation and people are facing inevitable austerity plans, this is an opportunity for business owners to think: how can they deserve the money of people whose view of money will change (toward not spending it on anything that isn’t truly worth it)? Standing out from others by delivering distinctive customer experience is the answer. The first step is to apologize for the certain rise in your product’s or service’s prices.
May God spare you bad news and fill your lives with good tidings.
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