What To Do When Bad Things Happen To Good Customers

It happens to all of us. No matter how much we prepare, anticipate or practice, something unexpected happens that brings your well-oiled marketing machine to a heart-stopping halt. And more often than not, your customers are the ones who let you know about it!

Handling unforeseen disasters is part of any marketing executive’s job. But it involves more than just saying “I’m sorry” and handing off to PR to clean up. There are three principals that, if employed, can not just redeem your reputation but increase your business – from the very customer you thought you’d lost!

Following these three steps will ensure at the very least that you’ve put in place a proven and honorable process for managing mistakes, and at the very best, reaps you far more benefit (read: business) in the long run.

Principal One: Own it – fully.

One of the most frustrating things we encounter is a customer service representative (defined as anyone on the other end of the phone with a customer) who is apathetic or worse, defensive. AOL was famously outed for their pejorative tactics when customers called to have their service discontinued. When one frustrated subscriber recorded AOL’s customer service rep verbally spanking him for wanting to cancel, it hit the mass media (the national morning TV shows, no less!) and sent shock waves through AOL, who immediately fired the rep and stated this was “not their standard business practice.” Unfortunately, there had already been a substantial number of reports that it was not only normal, but an approved practice by AOL management! That was bad enough, but can anyone remember how AOL redeemed themselves afterward? Me neither.

Be honest – if your customer service person messed up, admit it and take full responsibility for it. Then fix it. Then tell everyone how you fixed it. You may not have control of the way an issue comes to light, but you most definitely can and should take control of what happens afterward.

Principal Two: Manage the issue beyond expectations.

If you’ve messed up, admit it fully and apologize, sure. Then, explain, publicly if necessary, exactly how you are handling those who have been harmed or affected by your error, what you are doing to prevent a recurrence, as well as any effort you are making to go out of your way to regain trust.

In one of my businesses I had spent a great deal of money on marketing and publicity to advertise an exclusive and expensive new product we were bringing to market. In fact, we did such a great job building buzz that we pre-sold nearly the entire shipment before it arrived from China. As we prepared for the first container to ship from the U.S. port of entry to our warehouse, it was discovered all the products had been packaged without a key component.

Though this would not affect the product’s usability, it very much affected our brand and our reputation – not to mention our customers! Upon discovering the problem, we immediately contacted every customer individually (yes, we called them) and personally explained what had happened: the manufacturing facility made a mistake and their product would arrive sans one piece. We apologized in earnest, then explained what we were doing to make it right: once the missing parts arrived, they would be express-mailed to each customer the same day! When the parts did arrive at our warehouse, we already had mailing labels printed, another hand-signed letter from myself (the owner), and a surprise gift certificate worth $20 at our e-commerce store. This let the customers know how much we value their business, and that they were worth the extra time and money it took to keep them.

As a result, we tracked hundreds of dollars of new sales to the coupon we’d included, and we monitored conversations on blogs that included high praise for the way we handled this issue, pointing to our actions as a blueprint for a perfectly executed “apology” by a company. Not only did we generate revenue, we gained the loyalty and great word of mouth all companies strive to attain.

Principal Three: Adopt a new mantra: Transparency = Trust.

Inviting the customer deeper into the repair process requires forethought, fortitude and courage. We are so ingrained with corporate secrecy lest anyone find out how we actually do business it’s a wonder why any customer would trust us in the first place. What if your doctor told you what was wrong with you, but refused to tell you how to get well? Tell everything that can be told without doing harm.

Once we understood how the error occurred in the shipments we received, we were able to adjust the way we communicated with those responsible for packing and shipping the boxes. We found out who was in charge of that particular process and made friends with him (as opposed to simply reaming him out!).

Yes, the manufacturer bore the responsibility of making good on their mistake, but working together we figured out how to prevent this type of thing from happening again. In the letter I included with each re-shipment, I explained how the error occurred and what we were doing to prevent it from happening again. Can you imagine if AOL exposed the internal steps and processes that led to the reform of their entire customer service department? Whether it worked or not would bear out eventually, but wouldn’t you be more inclined to trust a company with that level of transparency?

Exposing one’s flaws is a hard pill to swallow, and sometimes it’s not necessary or possible. But, being transparent is the new business mantra, as witnessed by President Obama’s recent statements about holding government and banks accountable for how they spend their bailout money, and putting the expenditures on his web site for all to see.

In these times, shattered trust and suspect accountability by those in charge of our money has never been more poignant a topic. But human nature is to trust once again in those institutions, people, businesses and ways of life we’ve always trusted. That trust, if it comes, comes slowly and at a cost we may not realize for years. The only control we have is to ensure that we practice what we expect our government, business and society as a whole to practice, and not just preach.