Following the saga of Nerd Block—the comic, sci-fi, and gamer-focused subscription box service—has been a roller coaster in terms of crisis management.

Like Loot Crate and similar services, Nerd Block offered customers a themed monthly assortment of toys, books, and other fun items for genre fans. However, the company went from a fast-growing player in the subscription space to vanishing seemingly overnight.

Nerd Blocks’s main site went offline on August 1, with further reports that the company had laid-off all staff and would not be shipping any more boxes. By October, the company was in the process of filing for bankruptcy. Their site remained offline for months with only a message explaining that the disruption is due to scheduled maintenance. There was no acknowledgment via social media, and no response to the company’s thousands of confused and angry customers wondering what will happen to their prepaid subscriptions…until now, that is.

The Nerd Block site suddenly came back online in March, announcing new leadership, new convention appearances, and “a very new approach” to doing business.

Regaining customers’ trust may be an uphill battle, though, if the social media conversation is any indicator. Most responses via Twitter and Facebook seem focused on boxes that customers paid for but never received.

Nerd Block’s status—and that of their customers—remains up in the air as of this writing. However, the company’s experiences offer some very valuable crisis management lessons for other businesses.

A Case Study in What NOT to Do

Let’s assume you find yourself with a sudden disruption of service. You probably won’t have to try too hard to imagine this; at a certain point, just about every business faces a crisis that puts a serious strain on the organization. For example, one of the teams I work with was without power for several days last year due to Hurricane Irma. However, we had a game plan ready to get access to the internet (and most importantly, air conditioning), to keep things running and get back online as quick as possible.

When a crisis like this happens, you can’t simply disappear without communicating the situation to customers. People will get worried that they will not see their funds or their merchandise and start panicking. In response, those customers will:

  1. File a chargeback, cutting off revenue streams that you desperately need.
  2. End the relationship, meaning a loyalty customer is lost even if service comes back online.
  3. Share their experience, creating a lasting negative reputation to turn-off future customers.

That’s where Nerd Block’s response came up disastrously short in 2017. The business suddenly went silent across all lines of communication and remained that way for months, leading to widespread anger at the company which may still haunt the brand even after relaunch.

It didn’t have to go this way; with just a little planning and communication, Nerd Block’s sudden disruption of service could have been a much smoother process. This begs the question: if you find yourself in an emergency, how can you best handle the situation and retain your customers’ trust?

#1. Calculate Your Risk

You can’t wait until the storm is on top of you. In fact, the first step takes place well-before any dark clouds start gathering on the horizon.

Begin by putting your organization under the microscope. Consider all the threats most likely to impact operations at some point, including natural and man-made disasters, as well as conditional factors based on the specifics of your business. Most of these threats fall into one of four basic crisis categories:

  • Consumer: Defective or dangerous products, bad PR campaigns, or a social media misstep can bring the hammer of public opinion down fast.
  • Facility: Anything from a warehouse fire or natural disaster to a burst water pipe can wreak havoc on your operations.
  • Technology: If you handle a large quantity of personal consumer information, hackers will probably try to gain access to your systems, compromising that data.
  • Staff: You could face operational challenges if something happens to an employee on the job. Plus, any work stoppage, whether intentional or accidental, will also cause problems.

The dynamics of your business will impact how susceptible you are to each potential crisis trigger. For example, if you’re a B2B company, you won’t have as much exposure to consumer scrutiny—or consumer backlash—as a big-name retailer.

A business structured in a decentralized network can avoid facility problems and may have less exposure to the threat of a major hack. But, that same organization could still face major challenges if communications, electricity, or other services are interrupted across a wide region.

#2. Have the Necessary Infrastructure At-Hand

You wouldn’t wait until after a natural disaster to start collecting bottled water and batteries around the house, so don’t make that same mistake with your business.

From the Legal department to Sales and Marketing, every part of your organization should be trained in crisis management lessons, and each team member should know which part they need to play. If an interruption of service occurs, you need to know how the organization will address every step of order fulfillment and customer service.

Your HR and other internal teams need to be able to contact everyone in the organization as quickly and easily as possible. Designate who is responsible for which communications, then train those individuals thoroughly so they’re ready to jump into action when needed.

It’s also not a bad idea to consider third-parties as a resource in these situations. For example, you can contract an on-demand answering service to help if your internal team can’t keep up with call volume.

#3. Communicate Clearly & Quickly With the Public

The fact that Nerd Block was forced to file for bankruptcy is not why they experienced social backlash. The problem is that they failed to explain the situation to customers and reassure them about the status of their funds.

Failing to address a problem—or even the perception that you’ve failed to do so—is one of the biggest service blunders you can make. That’s why you need to be proactive about crisis management and acknowledge customers’ concerns even before they raise them.

You should provide an immediate response as soon as trouble starts brewing. Get the word out on social media that the organization is experiencing a temporary disruption, and clearly convey:

  • Why or how this situation developed.
  • What services will be impacted.
  • How long this interruption will last.

Even if the problem is outside your control, such as a storm or other natural disaster, it’s still your responsibility to set customers’ expectations. Define the problem, then layout a clear time frame in which you expect full service to resume.

#4. Be Empathetic

Remember: only 4% of public complaints follow a single service failure. The remaining 96% are due to failure to properly address that initial problem.

Take the time to write thoughtful, individually-crafted responses to each customer inquiry. It’s time-consuming, but it will pay off in terms of positive customer impressions and improved loyalty and trust. The courtesy and empathy you show toward customers’ concerns is especially important when dealing with a difficult situation on your end. If you’re willing to work with customers even when it’s hard to do so, they will be more open to grant you the same level of understanding.

It should go without saying that even when you are unable to agree to customers’ demands, you always want to be civil with them. Keep a level head, and don’t take anything personally, even when customers get angry. Whatever you say can and will be used against you in the court of public opinion.

#5. Try to Please Everyone…but Accept that You Won’t

You should do everything you can to make each customer interaction a positive one. This is entirely possible in most cases; that said, never forget there is a small segment of the population you will never be able to please.

Maybe a specific customer is having a bad day and decided to take it out on you, or maybe that person is actually looking to get something for free. Either way, you can only devote so many resources to satisfy one customer before it negatively impacts your ability to provide service to others. This is never truer than during a crisis, when resources are already stretched very thin.

Don’t use this as an excuse to write-off customers too quickly, but be willing to accept that you can’t please all the people all the time. Sometimes you need to cut your losses with one person to avoid alienating a larger group.

#6. Analyze & Regroup Once Things Calm Down

Even once the crisis ends, you can’t simply put it behind you. Now is the time to analyze your response and identify areas for improvement. Whether you want to admit it or not, both of the following are true:

  1. This is not the last time you’ll have to contend with a difficult situation.
  2. No matter how well your organization responded, there will always be something you could have done better.

Invite voices from all different levels of the organization to join the discussion. This will allow for a more in-depth conversation with a better, more precise view of how everything happened, where problems were identified, and how the process could have been better.

It could be helpful to ask everyone to analyze their experience at multiple levels: their personal and team performance, as well as their impression of the whole organization. Then, bring the organization together for one, even several large group meetings, where everyone can hash out issues and figure out what could be done better next time. This may even help you identify improvements you can make in your day-to-day operations.

Once you have the raw input, start pouring over it and revising processes as soon as possible—after all, you can never predict when the next crisis will evolve.

Everyone Makes Mistakes…But Not Everyone Recovers.

As I mentioned before, every business will be put in one of these situations sooner or later. The real determining factor is not how long you can put it off, but how well you can perform under pressure. Take a lesson from other businesses’ experiences: communication is key, and preparation is vital.

You don’t want to be caught off-guard, so start studying your crisis management lessons and get these practices in place as soon as possible.

Ready to learn how to protect your business, grow your customer base, and maximize your revenue? Download your free copy of the State of Chargebacks 2018 report and discover how much you could be saving.