The 90s and early 00s were full of this. Windows having serious crashes frequently, while Microsoft talked about how great they were.
Did they know these issues were happening? Of course. And I truly believe that they were working hard to resolve these issues.
Here's the problem: as customers, we suffered through these issues and never got any indication that Microsoft knew, cared, or was doing anything about it. They may have had every engineer on the job, for all we know. But we didn't know, so Windows grew to be a name we associated with low quality. We trash-talked Microsoft (even though there was no Twitter!), we dabbled in Linux, and a great many of us moved to Apple. Microsoft hasn’t disappeared, but they may never regain their stranglehold on the operating system market.
You need to admit to your customers when something goes wrong – because they value honesty more than they hate issues.
People prefer honesty from their partners, their friends, and their companies. An honest company is one you can trust…even if they do have some problems. When you tell customers that something went wrong, why it went wrong, and what you’re doing about it, it helps reassure them that you care and are paying attention. It assuages their fears and potentially even makes them like you even more than they did before you had an issue.
Want proof? According to our Argyle Social reports, outage & issue posts have MADE us money on social media…in fact, they’ve made us more money than feature announcements and press.
Want more proof? Check out the insanely positive comment thread on Balsamiq's outage post today.
Sure, talking about your problems in public /can/ make users who weren’t affected by the problems aware of them. But guess what? The same thing can happen when your affected customers tell their friends about how unreliable your service is, and how unaware you seem to be of the issues.
Honesty and transparency is the only way to deal with issues if you want to retain your customers (that’s why it’s one of our values). That, or never having any bugs. Good luck with that.