Some Tips on Breaking Negative News to Customers

Most of us find the tough task of giving customers unwelcome news one of the most daunting tasks in business—especially when the customer expects nothing but good news. Obviously, some businesses must do this more often than others. For example, a loan officer in a bank will often have to refuse a certain number of applicants every month. A reservation clerk will have to break the “no vacancy” news quite often.
No matter how often we have to do it, many of us never get so we enjoy saying “no” to customers. But developing sound bad news skills is essential and makes the job less unpleasant.
At a large, busy service station, the main bad news problem was telling people from out of state that their credit cards from another company could no longer be used. This problem had arisen because of a recent change in the policy of the company that issued the cards. The problem was totally out of the control of anyone at the station, even the manager. Most of the teenagers who worked at the station found as soon as they told the customer, “Sorry, we can’t accept your card,” an argument started.
But one of the employees, Eric, was always able to go smoothly through his shift with no customer problems. Soon the others started asking Eric for help every time a customer presented the card in question. The customer would always leave satisfied.
What did Eric do that was so effective? In a very polite voice, he would say, “I’m really sorry, madam (or sir), but your company has apparently decided to stop dealing with ours. You know, we’d like them to come back probably a lot worse than you would. They really should have written to you, telling you about the change. I’m sorry they didn’t. Since I can’t change your company’s mind right now, is there anything else we can do to help? We do accept Mastercard, Visa and American Express.”
More than half of the customers would suddenly remember having received a notice in the mail. The others would ask a question or two, and most would actually say thanks to Eric before presenting another card or cash.
Four Steps in Giving the Customer Bad News
•Use a polite tone of voice. Make it a point to check on this. For many people, vocal tone is mostly unconscious, unless they try specifically to take notice of it.
•Don’t spend too much time and energy on apologies. Apologizing is fine, but most customers want reasons and action.
•Deal with why the problem exists. If you don’t know, let the customer know that you will find out, and mean it. If the cause of the problem is impossible to discover, go to step 4.
•Talk about what can be done to solve the problem. This includes alternatives and suggestions from which the customer can choose if that is possible. When only one possible course of action is available, sell the customer on why that action is the best.
Notice the steps that Eric took in delivering the bad news to customers. First, he used a polite tone of voice. Second, he didn’t dwell on long apologies. Although he said “I’m sorry” twice, his message wasn’t an apology. It was an explanation. Third, he dealt specifically with why the problem existed.
Of course, it was fortunate that he happened to know what had caused the problem. Fourth, he closed his remarks with a positive statement as to what could be done to make the situation better for both the business and the customer. Those four steps (as shown above) can help a great deal when giving customers messages that they would rather not hear.
Most customers would rather not hear the word “policy.” “We can’t do that because it’s against company policy” is one of the weakest refusals one can use. If you work for a manager who tells you that you must use that line, at least find out the reasoning behind the policy so you can explain it clearly to the customer.
Notice especially the type of situation. Where you can, really use Step Four to your—and the customer’s—advantage: whenever you can do something to make up for the negative situation.  With just a little creativity, you can often bring a “minus” situation not simply up to a zero, to a point where you have removed the source of pain, but to a PLUS.  With a plus, you will have a customer who tells his or her friends about the problem you solved and to what lengths you were willing to go to make up for it.  Here are a few examples: Coupons for future goods and services, a total refund along with some type of bonus, a well-timed letter or e-mail of apology and a promise of high-quality service in the future.
Once you get a handle on these four simple steps—especially the fourth one—announcing bad news to customers can actually become a rewarding part of running a business.
Lowell Lamberton is a professor of business at Central Oregon Community College. He can be reached at llamberton@bendcable.com for comments.