Crisis Management -- Winning Back Angry Customers

August 12, 2011 — It’s 2:00 am and my phone was ringing. This is never a good sign, so I braced myself and was informed we had a company crisis on our hands. Every single customer with a free account of our SaaS solution had received an email informing them that their account was no longer active. If they wanted to continue accessing our SaaS product, and view their IT operational data, they would need to enter their credit card to regain service.

I’ll back up a few days, so I can share with you how we got here, and how we managed to get hundreds of angry customers back on our side.

We were experimenting with different levels of product offerings and pricing models, and what customers would get in return at the new levels. We worked through how best to communicate it and how to grandfather customers both to and from the free offerings. We toiled meticulously because in this age of social media, if you screw up and anger a customer, Twitter bombs will start exploding before you even know what you did. We worked through an exhaustive process to not screw this up. And then my phone rang at 2:00 a.m. All that we had so carefully planned not to happen, just happened by accident through an unintentional execution.  My first thought was “holy crap,” then I went into damage control mode, and spent the next four days there.

“We toiled meticulously because in this age of social media, if you screw up and anger a customer, Twitter bombs will start exploding before you even know what you did.”

We could not just blast out another email telling our customers, “Sorry.” These accounts were cancelled! If someone was in the middle of running our solution, they were dumped out. Worse, we couldn’t even remotely turn their accounts back on. If our customers wanted to keep using our solution, they had to forgive us and go back to follow a process to restart our product themselves.

How Company Culture Guides You

Many of you are probably thinking ‘they’re not paying customers – so you really weren’t losing anything.” However, our business model depended on giving customers free service, and then upgrading them to a paid service as they grew to love and depend on our solution, and expand its use. And I’ll be honest: The speed at which this audience could hit social media with broad-based, negative rants against our company scared me. And, just as importantly, it was absolutely not how we wanted to do business. I didn’t want us to be perceived as having an ‘oh well’ attitude toward people feeling screwed.

I quickly decided that every single customer impacted needed to receive an email clarifying what happened and apologizing for our mistake, and they needed to receive a phone call from me personally. I mobilized a team to cross-reference SalesForce.com to get any customer phone numbers there, and then I dedicated members of our staff to researching missing phone numbers. We set up a common online system that could be updated live by multiple people. I sorted my phone lists by appropriate time zone, and then I started dialing. I spent the next few days glued to the phone. I called hundreds and hundreds of companies and didn’t stop until I reached every single company that was affected by our mistake.  If I didn’t have a direct line, I’d go through an exhaustive automated phone tree to reach the right person. Yet, far from being fatigued, my motivation grew from each call because it was a rare opportunity to find out exactly how much our free service was valued. Nearly every company felt impacted by losing our service, and this proved that the free version of our product had real value to them.

I learned that the loss of service didn’t upset these customers as much as the feeling that we were scamming them. I took the time to explain to them what happened. I told them that as the CEO and co-founder, I was personally apologizing, and I made it clear that we were not trying to sell them anything and that I hoped we would continue to have them as a customer of our free level of service. Then I had to ask them for a favor – to not just accept my sincere apology, but to take the steps needed to re-start their account.

“I learned that the loss of service didn’t upset these customers as much as the feeling that we were scamming them.”

The first person I spoke with was a guy in Indiana, and he was frustrated. We talked, and it was my first of hundreds of conversations where I was contrite, transparent and honest in sharing how badly I felt that this had happened. He said he found it really amazing that the CEO was calling to personally apologize and talk this through. And THAT was our first of many positive Tweets and social media posts on the topic. Again and again, honesty and taking the time to communicate it won customers back. It also turned into a really valuable product management opportunity. I talked to the users about what they liked and didn’t like about our service. How could we make our product better? If they were to pay for additional service, what would they want to pay for?

Was this exhausting and time-consuming? You bet it was. It’s exhausting to even think about again. But as leaders we need to know when to fall on our sword. As in life, a crisis is the true test — of both people and of companies. The competitive climate of today’s business is brutal. Everything is replaceable. Repeating success is not near as challenging as stepping into a crisis, solving it and making it better. Just ask Maynard Webb, who turned eBay around when it’s frequent outages were national news. He has great advice on identifying the crises that really matter.

The Biggest Measure of All

A few days after completing all of the customer calls, the software engineer who made the original mistake that cancelled accounts and pushed out the email approached me. He was obviously very emotional about what had happened, and thanked me for all I had done to get the customers back on our side. “I made the mistake,” he said, “and I’ll never forget it.” I told him we were able to address it successfully because he was transparent with the mistake — that as soon as he realized what had happened, he let the team know so that it could be addressed. This is core to our company culture, which I have written about before.

Within a week of the mistake, nearly every customer had come through the restart process to re-initiate our service. Social media comments focused on how well we handled things. The net result was that not one single negative social media post came out of the crisis, but many positive things did. It was yet another reminder that honesty and transparency wins, and it applies to companies large and small. Fellow Forbes contributor Anthony Wing Kosner wrote about how Target fumbled managing its recent holiday season credit card breach because it played down the very facts that its customers most needed to hear. Be honest, be humble, be transparent, and do what you can to fix it. All customers deserve that, and they will thank you for it with their loyalty.