How to deliver bad news to customers - Part 1

Survive the pitchforks!

Most companies make money by selling something of value to customers. Software, services, devices, etc. Understandably, when those products don’t work, customers get upset. Depending on who your company is selling to, you will get different levels of hate from customers when things break. The strategy for delivering bad news also differs from customer type. Let’s break down the major types of customers first.

First up, individual consumers. These are people like you and me who buy products for personal use and the dollars they spend on these products typically range from ~500-1000 dollars per year. Companies that cater to individual consumers are commonly known as Consumer Businesses. Examples of consumer businesses are Netflix, Amazon Prime, Apple, etc.

Next up, enterprise customers. These are large companies that buy products and services for commercial purposes. Enterprise customers tend to spend millions (and in some cases billions) of dollars every year on products and services. Examples of companies that sell to enterprise customers are, IBM, Microsoft, Amazon Web Services, Salesforce, etc. Note that some of these companies also have consumer businesses as well. E.g Microsoft sells tablets to consumers and Office 365 products to enterprises.

Lastly, small and medium businesses, or SMBs. These are smaller companies with a staff of mostly one or two employees including the founders. They typically spend ~1000-10,000 dollars per year on products and services. Examples of companies that sell to SMBs are Airtable, Asana, Squarespace, Patreon, etc. 

Ostensibly, one might think that the customers spending the most on products will complain the loudest, but that is not necessarily true.