When and how to deliver bad news

April 2021

When markets are fairly smooth and volume is moderate or low, surprises are rare. We anticipate outcomes, help with the process of a transaction and everything works out more or less predictably.

There are times – such as right now – when the unexpected seems to happen every day and we can find ourselves dreading a stack of difficult calls to make, some of which might be due to things completely outside of our control. I read an excellent piece that gives advice on how to do that by Warwick Brown, a seasoned business development leader and founder of Account Manager Tips.

I’ve summarized it here:

  1. Don’t delay. Rip the band-aid off and tell your client as soon as possible. The longer you leave it the more chance they’re going to find out from someone else. Bad news only gets worse when it becomes second-hand bad news.
  2. Prepare. Do your homework and get the background to the situation. Understand what happened and what immediate steps will be taken in response.
  3. Come clean. It’s far better to tell the truth than hide the facts. Do not make up a story or whitewash what happened.
  4. Phone first, then email. If possible, deliver bad news over the phone first. It’s easier to explain what happened and you can say things over the phone that you might not want to commit in writing. It’s also courteous and shows respect for your client. I’ve had many issues that escalated way out of proportion just because my client was offended a letter was sent instead of calling.
  5. Explain yourself. When you’re breaking bad news to clients be prepared to provide details. If it’s unavoidable, you need to justify what has led to the situation and the options they have (if any). If the bad news is a mistake, let your client know what happened and what solutions you’ve put in place.
  6. Don’t blame the client. Even if it’s their fault, avoid pointing the finger at your client. You want to deliver bad news in a positive way, not start the blame game. Focus only on the issue and what you can do to minimize the impact and support your client through the situation.
  7. Listen. Let your client say what they feel and don’t interrupt or get defensive. When they’re finished, acknowledge their reaction and be sympathetic to any disappointment. Invite your client to take some time to think about what you’ve discussed.
  8. Follow up. Just because your client said they understand the bad news doesn’t mean they’re fine with it. Keep in touch and monitor any solutions you’ve implemented to address the problems that led to the bad news to make sure they’re actually working.

I want you to know that as we navigate the next stretch of potentially challenging waters in our industries, I will do my best to be the kind of professional partner who communicates in this way with you.

Please drop me an email or call if you have any questions – or someone you know is in need of expert advice. I love to help those you care about. If you have a referral please click the button down below. Your referrals are the heart and lifeblood of my business.

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Omar Khamisa
Owner
Mission San Jose Mortgage
2111 W. March Lane, Suite B100
Stockton, CA 95207
Office: 209-651-2000
Mobile: 510-648-5535
Fax: 209-434-2311
NMLS: 369325
Omar@MSJMortgage.com

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