The Delivery of Bad News to Customers in Service Encounters: An Employee Perspective

During service encounters, customer contact employees often need to deliver bad news: unexpected information contrary to the customer’s wellbeing. For example, technicians regularly tell customers that none of the data on their computer hard drive can be retrieved, veterinarians often inform owners that a beloved pet has cancer and cannot be cured, and airline staff regularly tell travelers that their flights have been cancelled due to bad weather. For some customer-contact employees, delivering bad news is an unavoidable, delicate, and emotionally-charged task that occurs regularly.

Disclosing bad news can be highly stressful and perhaps detrimental for (1) customers, (2) customer- contact employees, and (3) service firms in general. Accordingly, it is crucial for service organizations to better understand bad news encounters (i.e., situations during which customer contact employees must deliver negative information) to better equip their managers and employees to deliver such news to customers.

The topic of how to best deliver bad news has been broached in various disciplines, including the medical literature (e.g., Baile et al. 2000, 2002; Rosenbaum et al. 2004), the management literature (e.g., Bies 2013; Kothari, Shu, and Wysocki 2009), and the sociology literature (e.g., Clark and LaBeff 1986). These
literatures have (1) examined the attitudes and emotions of the discloser of extreme bad news in very specific contexts, (2) identified the tactics used by disclosers, and (3) developed protocols for delivering extremely negative information. Surprisingly, studies of bad news delivered by contact employees are scarce in service research. Service failure and service recovery have received much attention, but this literature has two major gaps when it comes to understanding the delivery of negative information. First, service recovery research generally skips over the initial part of the process where employees first communicate bad news to customers, and instead focuses primarily on the process involved to resolve the situation. Second, there are many situations in which employees must deliver negative information to customers where it is clear that a service failure has not occurred (e.g., informing a customer that his 30-year old dishwasher is beyond repair).

We use the critical incident technique (CIT) (Flanagan 1954; Gremler 2004) to analyze 200 incidents where service employees from a wide range of service sectors had to deliver bad news to a customer.