BUS 305 Module 3 Bad-News Messages Example

Declining a Rate Freeze: Writing Bad News a Customer Can Accept

Student Name

Business Administration Program, Aspen University

BUS 305: Business Research and Communications

Instructor Name

Month Day, Year

Declining a Rate Freeze: Writing Bad News a Customer Can Accept

Tallgrass Logistics, a composite freight company, has moved furniture for a Kansas City retailer for nine years. The retailer's operations manager wrote asking Tallgrass to freeze its rates for another year, citing slow sales. Tallgrass cannot: its driver wages rose 7% last year, insurance premiums rose 18% and it has already absorbed one year of higher costs. It will raise the retailer's rates by 6.5% on July 1. This paper explains how to deliver that news in a way that keeps a valued customer and presents the finished letter.

Direct or Indirect?

Bad news can be delivered directly, with the news first, or indirectly, with reasons before the news. The direct strategy suits routine refusals, readers who prefer bluntness and situations where the news must not be missed. The indirect strategy suits news that will disappoint someone whose goodwill matters, because it lets the reader understand the reasons before reaching the decision. A long-time customer who has asked for a favor is a classic case for the indirect approach, provided the news is still stated clearly and not buried.

What Research Says About Explanations

Research on organizational justice supports giving reasons. People judge the fairness of a decision not only by the outcome but also by how they are treated and whether they receive adequate information about it; these interpersonal and informational aspects of fairness are distinct from the outcome itself (Colquitt, 2001). An early study found that a credible account of mitigating circumstances raised people's judgments of how fairly they had been treated, even when the outcome did not change (Bies & Shapiro, 1987). A meta-analysis found that explanations improved fairness judgments and reduced negative reactions, and that the adequacy of an explanation mattered more than simply offering one (Shaw et al., 2003). The letter must therefore give real, specific reasons, not vague references to market conditions.

Planning the Letter

The letter has five parts. A buffer opens with something both parties agree on, without implying a yes. The reasons explain the cost increases with specific figures. The bad news follows the reasons in a clear sentence, placed in the middle of a paragraph rather than at its start. An alternative shows Tallgrass wants to help within its limits. The close looks forward to the relationship without repeating the refusal or apologizing excessively.

The Finished Letter

"Dear Mr. Okafor, For nine years, your furniture has moved through our Kansas City network, and we value both the business and the way your team works with ours. We understand this has been a hard year for retail, and we have looked carefully at your request. Over the past eighteen months, our driver wages have risen 7%, and our cargo and liability insurance premiums have risen 18%. Last year we held your rates flat and absorbed those increases. This year we cannot do that again and continue to provide the on-time service you rely on, so your rates will increase by 6.5% beginning July 1, less than our own cost increase. To help offset the change, we can offer two options. If you consolidate your twice-weekly deliveries into one larger weekly load, your total freight cost would fall by about 4% compared with today. We can also lock the new rate for eighteen months rather than twelve. I would like to walk through the numbers with you; I will call Thursday afternoon, or you can reach me at the number below. We look forward to many more years of working together. Sincerely, Marcus Hale, Account Manager."

How Each Part Works

The table shows what each part of the letter does.

Choices in Wording

The letter never says "unfortunately," "we regret" or "we must deny your request," phrases that signal bad news before the reader reaches the reasons and sound defensive. It uses "we cannot do that again and continue to provide the on-time service you rely on," linking the decision to a benefit the customer values. The increase is presented with context, "less than our own cost increase," which is true and relevant. The consolidation option includes a specific figure so the customer can see the saving. The close does not apologize again or restate the refusal.

Common Mistakes

Bad-news letters fail in predictable ways. Some bury the news so deeply that the reader is unsure what was decided, which damages trust more than the news itself. Others offer reasons so vague, such as "rising costs," that they sound like excuses. Some apologize repeatedly, which invites the reader to push back. Others end with "please do not hesitate to contact us," a phrase that says nothing. And some are sent by email without a call, when a relationship this valuable deserves a conversation.

Delivering the Letter

The channel matters too. The account manager will call before the letter arrives so the customer does not learn of the increase in writing first, then send the letter as a formal record. This combination respects the relationship and ensures the terms are documented.

Following Up

The account manager will record the customer's response to the call and to the options. If the customer chooses consolidation, operations will confirm the new weekly pickup day in writing within two business days. If the customer asks for more time, the manager will offer a meeting with the operations director rather than a new concession, keeping the decision firm while showing continued attention.

Conclusion

A rate increase to a long-time customer is bad news best delivered indirectly, with specific reasons before a clear decision, real alternatives and a forward-looking close. Research on fairness shows that adequate explanations and respectful treatment shape how people react even when the outcome is unwelcome. The finished letter applies those findings and gives the customer both the reasons and the means to reduce the impact.

References

Bies, R. J., & Shapiro, D. L. (1987). Interactional fairness judgments: The influence of causal accounts. Social Justice Research, 1(2), 199-218. https://doi.org/10.1007/BF01048016

Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86(3), 386-400. https://doi.org/10.1037/0021-9010.86.3.386

Shaw, J. C., Wild, E., & Colquitt, J. A. (2003). To justify or excuse? A meta-analytic review of the effects of explanations. Journal of Applied Psychology, 88(3), 444-458. https://doi.org/10.1037/0021-9010.88.3.444