One morning last January, a franchisee of Nurse Next Door in Edmonton, Alberta, sent an e-mail to company headquarters in Vancouver, British Columbia. John DeHart, Nurse Next Door's co-founder and co-CEO, clicked on a link in the message, which led to the website of Eldercare, a competing company based in Toronto. Like most other players in Canada's home health care industry, Eldercare was small, localized, and owned and run by trained nurses rather than business professionals. In fact, DeHart would soon learn, Eldercare's nursing pedigree was the point of its posting.

"Why choose Eldercare Home Health?" the posting asked, and then provided an answer: "Eldercare Home Health is not a franchise and we do not sell franchises. All our care comes from a registered nurse's perspective." Then the tone turned belligerent. "Many other companies," it went on, "are run by people with little, if any, formal health care training or credentials."

The posting continued in that vein, pointing out that, "at one company," the franchise owners came from careers in coffee shop and call center management, while another owner "specializes in entrepreneurship." The piece concluded by asking, "Are these really the people you want to entrust with the care of your loved ones?"

Though the text didn't mention the "other company" by name, its identity was unmistakable: Nurse Next Door is the largest franchised, nationwide home health care service in Canada. DeHart, a tech entrepreneur, and his partner, Ken Sim, a former investment banker, founded the company in 2001, shortly after each had moved to Vancouver. The idea was born when Sim's wife, pregnant with the couple's first child, was confined to bed rest. Sim called a home care nursing service for help. Chatting with the woman sent by the service, Sim learned that she had been employed by the company for only one day and had never met her bosses. Sim was appalled, but the entrepreneur in him sniffed an opening.

DeHart was enduring similar trials finding help for his grandmother, who suffered from dementia. The two young men decided to go into business in the Vancouver area, running a stable of handpicked home health care workers. The venture proved successful. After five years and mindful of an exploding population of senior citizens throughout North America, they decided to franchise their model across Canada. The franchisees would be responsible for hiring caregivers and marketing their services locally, while scheduling, billing, and all other customer service and logistics were handled back at the mother ship in Vancouver. This idea also took off, and the company is projecting revenue of $30 million for 2011.

The Eldercare posting, Sim recognized, showed that his company's success had seriously ruffled the feathers of its more traditional competitors. The implicit smears turned starkly explicit as Sim read on: The authors had pasted a photo of the distinctive pink car driven by Nurse Next Door caregivers nationwide, with the company's logo in clear view on the door. "As you might have guessed," the message concluded, "the focus of these companies may be on selling franchises."

This struck Sim, 40, as defamatory. The question was how to respond to it. "My first thought was to let it go. Here was this small company with an obscure website that was probably read by about a dozen people. Did we want to call attention to it?" But DeHart, 38, reacted more emotionally. "That posting hit me like a punch in the gut," he says. "I took it personally. We'd been building our brand for 10 years. Now here was this competitor questioning, in a cheap-shot manner, our integrity, our quality, and our decision to franchise."

The management team consulted an attorney, who said Nurse Next Door had a strong case. DeHart drafted a letter to Lisa Wiseman, the head of Eldercare (Wiseman did not respond to repeated e-mails and phone calls requesting comment for this article), warning that if the company didn't take down the posting or at least remove the photo of the car, Nurse Next Door might take legal action. But Sim and DeHart, along with Arif Abdulla, Nurse Next Door's marketing director, hesitated before sending the letter.

"From a tactical point of view, we thought we might be giving our competitor too much control," Abdulla says. "What if they took our letter and ran it on their own blog? They could portray us as being thin-skinned and vindictive—a Goliath threatening David. Also, something about the letter just didn't feel right. It wasn't quite consistent with how we go about our business."

For the next few days, a debate ensued at the company's headquarters, where the walls are emblazoned with the company's core values—Passionate about making a difference and Finding a better way—and where, in efficient yet exhaustive fashion, the management team weighs every decision. In this case, Sim came around to agreeing with DeHart: They couldn't just let the offense pass. Jamie Birch, the company's CFO, also felt that action was warranted but thought that the letter, backed by legal muscle, would be sufficient. Abdulla, for his part, sensed that the affront might actually be an opportunity in disguise. "We started thinking about the other tools at our disposal," Abdulla says, "and one was social media." That path appealed to the co-founders.

Nurse Next Door had been employing the standard social media tools—Facebook, Twitter, blogs—but with no clear digital marketing strategy. That was about to change. With Abdulla's help, DeHart drafted a response to be posted on his blog on the Nurse Next Door website. The aim was both specific (to persuade Eldercare to take down the offensive posting) and general (to open a conversation about franchised home health care). In the freewheeling, transparent spirit of the medium, DeHart opened his piece with a link to the Eldercare posting.

"When we realized how serious the implications were (the competitor actually questioned our trust!), we were definitely taken back," DeHart wrote below the link. "But it got me thinking about why we decided to franchise our concept in the first place: in order to provide consistent customer service; a centralized 24/7 call center; and a truly national brand. All we can do is stand by our systems and service and let our customers speak for themselves. We want to hear from you."

The Decision Another round of in-house debate ensued, during which Birch joined the consensus: Responding through a blog, rather than legal channels, would allow the company to take control of the narrative and, in effect, use the momentum of the aggressor to create its own fall. Three days after reading the Eldercare posting, the Nurse Next Door team set aside the conventional letter referring to possible legal action and posted the blog entry. "We didn't know if we'd hear from anybody," DeHart says. "I really had no idea who was reading my blog."

The posting didn't draw an enormous volume of responses—12 as of presstime—but the conversation was passionate and thoughtful. A reader named Sean Costello, for instance, who had no connection to either company, posted a response defending Nurse Next Door. "How the caregiver engages and treats others in their everyday life is more important for this role than any particular training," he wrote. Responding to Eldercare's denigration of Nurse Next Door franchise partners coming from backgrounds in coffee shops and call centers, Costello continued, "Ummm, is it just me, or does this not read like a dream team of customer service providers?"

The responses that proved most gratifying, though, and most beneficial to Nurse Next Door as it seeks to add franchises throughout Canada and enter the U.S. market this year, were the half a dozen notes posted by Nurse Next Door franchisees from around Canada: impassioned comments riffing on DeHart's principled defense of the company and its entrepreneurial model.

Eldercare declined to take part in the online conversation. The company did, however, take down the original blog posting and did so without Nurse Next Door resorting to legal steps (which would have cost tens of thousands of dollars, Sim estimates).

"When I sent my post out into the blogosphere, we learned that the nature of social media is that you can't control it," says DeHart. "The most pleasant surprise was how the posting served as a rally point for the people in our company. The conversation reminded us why we're in this business."

The Experts Weigh In

Stick to Business

I agree with the decision not to litigate, because that almost always costs a lot of time and money and usually accomplishes little. But at the same time, I don't see the point of fragmenting your attention, and taking on the angst, by calling attention to your competitor's behavior. We've had competitors say anything and everything about us, and we respond by sticking to business and continuing to grow.

Larry Meigs
CEO | Visiting Angels
Havertown, Pennsylvania

Stay Neutral

I liked Nurse Next Door's thinking. It was almost like an op-ed piece in a newspaper. I also liked how DeHart led his blog posting with a link to the negative posting. He put the issue out in the front yard, rather than trying to spin or suppress any of the information. He built on the social capital he had developed with followers on his blog, on Twitter, and on Facebook.

Chris Burdge
President | bWEST Interactive
Victoria, British Columbia

Fight Back

Nurse Next Door should have pursued legal action. The type of "Internet graffiti" that their competitor engaged in arguably rises to the level of criminal behavior: deliberately making false statements for pecuniary gain. How many potential customers read that malicious posting and decided to call another nursing provider? This is a serious issue that affects almost every small-business owner. Eventually, the regulatory agencies will have to step in, but, until then, if you have the resources, legal recourse is entirely justified.

George Nikolaou
Attorney | Nikolaou Law Offices
King of Prussia, Pennsylvania