November 30, 2009 – Kentucky startup blog interviews Peritus VP, Gary Gerdemann
See below for an interview with Peritus’ Vice President of Account Services, Gary Gerdemann on crisis management for startups. Gerdemann has been involved in several high-profile startups including eToys.com, Homestore.com, Gamefly.com, Boston Market and Einstein Bros. Bagels.
On the tech and startup side of your experience, what was a major Public Relations issue you encountered?
A very interesting example was eToys.com. At the time I was the Senior Director of Corporate Communications and Investor Relations for E-Toys.com. One major hurdle we faced was a reputational issue that faced the online industry. The previous Holiday season was marred by spectacular market failures. Toys ”R” Us not only failed to deliver toys by Christmas, they failed to alert customers about the delay. The FTC opened an investigation on the industry and fined Toys “R” Us. Angry mom’s and major public skepticism ensued.
What did you do to counter public skepticism?
Our solution: radical openness. Typically, in our business, the logistics and fulfillment system are secret from the public because of inside / proprietary information. But this time we knew that our ‘trust us’ system wasn’t going to be enough for mom. We needed to show people how awesome our delivery process was so that they could formulate their own opinion.
We worked with NBC on a ‘how does it work?’ segment on NBC Nightly News (10 million weekly viewers). We had someone place an order from NBC’s studio office in New York as a camera crew tracked the whole process. From when the order was received in California, to when it was shipped and finally received by the customer in Denver.
Our message was that all of our employees were serious about every order every time. For example, our head of Logistics was a Vietnam War veteran. His job was to make sure the package was packed, shipped and delivered on time. NBC loved this. They even asked for his old war photos to air. During the segment, we interviewed all employees involved and discussed all high-tech machinery used in the process.
What was your success from this?
Well, our overall success was a real time result:
A) No government intervention and no restrictions on business.
B) Put customer concerns to rest.
Any other words of wisdom in handling PR crises?
The lesson is that sometimes in a difficult business position, you have to make a move that is well beyond what you may normally consider prudent. It’s worth doing some mental computation and asking yourself: What if we took an idea and blew it up 100 times larger? What if we did the exact opposite of that which most would consider “safe”? When we originally approached NBC with a standard pitch, they weren’t interested. But, we doubled down and offered unfettered access and they jumped at the chance. It was a hit and the piece the aired was a gem.
