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How to Push the Envelope and Still Stay Safe

How to Push the Envelope and Still Stay Safe

December 29, 2009

Practical, no-nonsense guidance to comply with the FTC rules

In the November issue, I told you about new FTC Guides that change the rules about the use of testimonials. I promised you then that you'd be hearing more about this topic, first because it has the potential to totally change the way we promote our businesses, but also because we're just not sure yet how it will be interpreted and applied.

Fortunately, I have a lot more information to share with you this month. This is lawyer territory, and as I've said before, I'm no legal expert. But lucky for us, I've teamed up with one of the country's leading attorneys on marketing law. And in this issue's monthly audio conference, he talks with me extensively about how marketers can continue to launch powerful campaigns while remaining in compliance with the new Guides, what we call, 'How to Push the Envelope and Still Stay Safe.'

His name is Kevin Houchin, and he has many years of experience in advertising, marketing and sales before he even went to law school. Since then, he's combined the two skill sets into a flourishing career helping people navigate the legal aspects of branding and promoting their businesses.

Businesspeople across the country would be happy to pay Kevin thousands of dollars for this information, but as a YourBusinessGPS member, this month you get an hour of his expertise for free! (Plus, he's offering our members a bonus - details in a moment.)

I provided all the background on the FTC Guides in the November article, but here's the real meat of the matter: marketers can't continue to use what Kevin calls 'aspirational testimonials' without some significant changes. All those great quotes saying, 'I started using this program and made $30,000 in three weeks!' or 'This supplement helped me lose 40 pounds in two months!', won't fly anymore, even with the standard 'your results may vary' disclaimer. As Kevin says in the audio conference, 'You can't claim any numbers unless it can be backed up by research as a 'generally expected performance result'.'

So you're left with a few choices. 'You can go through your testimonials and cut out quantifiable result claims,' says Kevin. This basically means deleting any numbers, leaving with you lame testimonials like 'This is the best product I ever bought!'

Or, 'you can use numbers if you clearly and conspicuously disclose the generally expected performance results. Do the market research, survey your customers and aggregate the data. The 'generally expected performance result' is basically an average of what your customers experience with your product or service; this data must then be included in a disclaimer in the offer, replacing the old 'results not typical.'

This may sound daunting, but in the audio conference we talked about some simple ways to do this. We even talked about some creative ways to turn a survey into another marketing opportunity ' be sure to listen to the conference to learn these great ideas.

Kevin also talked about other implications of the FTC Guides, such as its effect on affiliate programs and endorsements. Basically, this rule requires any affiliate or endorser to disclose a 'material connection' - monetary payment or free products received in return for promotion. If you have any arrangements like this, whether you're the affiliate or the marketer, you'll want to check out what Kevin has to say.

His basic message was this: despite some 'experts' claims that this change signals the 'death of affiliates,' there is still plenty of room for this powerful marketing tool. 'It just can't exist in the same way,' Kevin said. He predicts that marketers will discover artful ways to include this in a conversational manner, and over time consumers will accept it just as they did the 'results will vary' disclaimer for the past 30 years.

We didn't have anywhere near enough time to hear everything Kevin has to share on these subjects, but there's more available on his Web site, www.HouchinLaw.com and more from him specifically on the FTC Guides at www.SiteCompliant.com. Kevin offers an FTC Toolkit and other resources there that can help you steer clear of trouble. 

Your Quick Reference for Complying with the new FTC Guides

It's not enough for your testimonials to be true - they have to be transparent.

Testimonials now have to represent a customer's typical results OR be accompanied by a disclaimer reporting actual data on your customers' average results. Don't bury that disclosure in 10 point type at the bottom of the page - it must be 'clear and conspicuous'.

Testimonials should be kept fresh - don't use a testimonial that is over two years old. The FTC wants testimonials that reflect customer's current experience.

The FTC expects you to make a reasonable effort to survey your customers about their performance result. There is no hard and fast rule on what makes a representative sample - use your best judgment. And don't cherry pick results - use them all, or pick a random sample.

If you market through affiliates, add a 'material connection' disclaimer to your swipe copy to make it clear that the affiliate has a vested interest in the sales of the product or service. If you're an affiliate, make sure a disclaimer is included on your Web site and materials.

Remember, you won't get into trouble if you've made an honest attempt to comply. What will get you into trouble is patently ignoring the Guides, so get up to speed now!

Some of this information is from a great Webinar I found on Jim Edwards' Web site, where Jim talked with Rich Cleland, Assistant Deputy at the Federal Trade Commission. Check it out for yourself at www.igottatellyou.com/blog/ftc-change-interview. Important: This information is not meant to serve as legal advice.