How to Break Bad News to Clients

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Delivering bad news to a client is an unpleasant task for any small business owner, but we all face tough conversations such as asking for a budget increase or deadline extension. Learning to do it effectively can turn an uncomfortable situation into one that improves your relationship with the client and boosts your credibility.
Problems and mistakes are common during any project, so how you handle them is the true test of your mettle. "(Small business owners) are human beings dealing with other human beings," says Deborah Bosley, owner of the Plain Language Group, a communications consulting firm. “It’s not business to business; it’s people to people.”
When you break bad news to clients, you want them to feel that you understand their concerns and can be trusted to handle the fallout -- that you’re apologetic but proactively taking control.
Here are three tips to help you do that without harming your relationship or your reputation.
1. Acknowledge the impact on the client. When you deliver bad news, start by putting yourself in the other person’s shoes. “Recognize the impact it’s going to have on the client,” Bosley says. For example, your client may be under pressure to meet certain benchmarks, so if you’re behind schedule, you may add an emotional and financial burden by extending the project.
Show that you understand the client’s position at the beginning of your conversation. That empathy communicates that the client’s satisfaction is still your first priority. You can then frame your conversation around meeting their goals and needs.
Related: Oops, My Bad! 5 Ways Your Business Can Improve by Admitting to Mistakes
2. Be honest and direct. During the conversation, get right to the point and explain the situation in clear terms. “It’s important that you not waste people’s time beating around the bush,” Bosley says. “It shows respect.” For example, if you are over budget, show a clear breakdown of the costs, explain why they were necessary, and offer a new estimate.
Your client isn’t looking for excuses or long-winded explanations--they’re looking to see that you can take responsibility and control the repercussions. “There’s nothing worse than a cascade of (apologies),” Bosley says. "Just say, 'I’m sorry about this, but here’s how we’re going to solve it." You appear more competent when you confront the problem head on.
3. Provide a viable solution. Before you bring a problem to a client, prepare a solution that would meet the client’s needs and allay any likely concerns. “If you’re going to create a problem, you’d better be able to solve it,” Bosley says. For example, if you’ve overcommitted and can’t complete a project, connect the client with a talented colleague who will be able to see it through.
Focusing most of the conversation on your solution creates a sense of confidence and trust. “The action you take to rectify the mistake is where you gain back credibility,” Bosley says. A client will be much more likely to work with you again if they know that you’re willing to manage the burden for any problems that arise.