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March 13, 2020 — Friday the 13th — was the worst day of my life. Donald Trump announced a U.S. travel ban, setting into effect a global shutdown of the travel industry that rapidly spread around the world. Within days, we went from a $55 million valuation, with lead venture capitalists fighting over bids, to total silence — and hundreds of customers stranded abroad.
As a travel company in the eye of the Covid storm, we faced a double whammy. Our business model revolves around not just global adventures, but also uniting small groups of strangers. Social mixing was our special sauce, and it went down the sink in an age of lockdowns, along with flights and everything else.
The worst was yet to come. After repatriating customers from over 20 locations worldwide, we pitched headfirst into the contentious issue of refunds. Our business was bootstrapped at that point; we\’d grown it from a bedroom startup to 55-plus staff using our own money and a small loan. Without an investor to turn to, we were unable to refund everyone straight away — and naturally, that sparked a backlash.
Related: Will Business Travel Ever Return to Normal?
Our experience throughout the Covid-induced economic crisis was representative of what so many other businesses went through. Even after Covid is over, crises will continue to be a part of the entrepreneurial experience. So what did we learn?
Own your worst problems
In a time when the cost of mistakes is writ large on social media, many companies live in fear of negative feedback, with the role of “community management” dedicated to nipping complaints in the bud. But this tiptoe approach won’t be an option for everyone — and it certainly wasn’t for us.
Overnight, our reviews plummeted as furious customers unleashed their frustration in the form of one-star ratings and Instagram vitriol. With our young team battling the stressful fallout, a bigger statement was called for.
We began by being completely honest. While the temptation in this situation may be to apply some serious spin in the form of a carefully worded stock response, we found that it was better to lay all our cards on the table.
We wrote open letters to customers via email and across our social-media channels, explaining that as a small business, we simply didn’t have the capacity to issue refunds to everyone straight away without potentially going insolvent. We admitted that we were caught off guard by Covid and had made mistakes.
Our fight for survival was laid bare and unfiltered for everyone to see. The same approach can work for any business that finds itself in a crisis: Own it, be honest and tell your customers what to expect next.
Related: How Travel and Tourism Brands Can Leverage Social Media to Attract New Customers
Face the storm
Our transparency had an immediate impact. With millions of jobs at risk from Covid, people could empathize with our battle; our posts talking about the challenges we faced racked up hundreds of supportive comments.
We quickly adopted another strategy too. As a co-founder, I decided to call each customer affected by the refund issue, explaining the situation and apologizing for the delay. On a personal level, this was daunting: It’s not easy picking up the phone to call someone who is incandescent with rage. But its effect was twofold.
Firstly, it took the edge off social-media anger. Often bad feedback is fueled by a sense of not being listened to, so customers appreciated being personally contacted and heard. Secondly, by taking the matter into my own hands, I aimed to shield my team from the worst of the kickback.
Not every founder can afford to call every customer himself or herself. But even if you have your team pitch in or use another means of contact such as emails or social-media outreach, the effect can be the same: Customers feel heard, which takes the edge off of the frustration.
Act with — not for — your community
This approach took on another dimension after the inevitable happened, and Flash Pack filed for administration last November. It was at that point that I decided to contact every customer who had not yet received a refund on his or her trip and guide him or her through the process.
This huge task quickly took over my life. As my wife and co-founder, Radha, went about re-mortgaging our house to buy back our business assets, I was working flat-out filing claims on behalf of the community. Some refunds were straight forward, but others took months of collecting evidence or writing to banks in multiple countries worldwide.
I had no idea whether we could even save the business at that point, but fighting on behalf of our customers felt like the right — and only — thing to do. Rather than saying “What can we do for you?,” we asked, “What can we do together?” By going to great lengths to answer this question, we won back hard-earned trust. Customers saw our failures, but they also saw we were there for them.
Speaking intensively to your client base can also be a great exercise in market research for your business. We learned that guide-tipping was a pain point, for example, so we’ve now included that in trip fees. We also refined our product with more extraordinary hotels, such as accomodations made from converted Land Rovers in the Serengeti bush. By speaking directly to customers about your crisis, you can begin to turn a negative into a positive.
Related: Post-Covid, the Federal Government Must Remain Committed to Helping Businesses
A new wave of customer loyalty
When things go wrong in a business, it can feel like your only option is to hide or divert attention. But for us, it ended up being an invitation to get closer to our audience than ever. By being totally open with customers — by bringing them along on our messy, vulnerable journey — we drew back their loyalty and respect.
As Flash Pack reopens for a new chapter this autumn, 93% of pre-Covid customers say they’d book with us again; hundreds have already done so. Dozens more have written content with us, as our guides and former staff also return to the helm. By uniting in the worst of times together, we’ve built strength for the best ahead.