New FTC Rules for Testimonials and the Death of

The Federal Trade Commission (FTC) is making the world wide web a safer place and I for one am happy about it. This is good news for those of us who do use ethical marketing practices and play by the rules. I don’t believe the FTC is out to meddle in our businesses, but rather has a big job to do – protect consumers and give them the tools to make informed decisions on their own.
 
One of the new rules that has received a lot of attention has to do with testimonials. Testimonials are usually in the form of written words, audio, or video, extolling the virtue of some product or service.

Testimonials have a firm place in advertising and can definitely accelerate your sales as it helps to add credibility and social proof. I love it when someone has used my product and attained great results, and you can bet that I’m going to use that testimonial on my website and blog. The problem, as the FTC sees it, is that this testimonial may not reflect the “generally expected results” for which a typical user can expect by using this product.

For example, someone is viewing your sales page in which you are selling an e-book. You posted a testimonial you received from a customer who claimed “I made $5,000 the first month after reading this e-book and you can too.” This person viewing the page reasonably expects to achieve the same results. But in reality, perhaps only .5% of the people who purchased your e-book achieved those results, 4.5% made a modest amount of money ($10 to $100 dollars), and the other 95% didn’t even read it.
Trust me, this is true for many marketers of information products and — talk about killing the message — the “typical” scenario is that most people don’t even read the book let alone make any money! No one is going to highlight that fact. Duh.

In the 1980 version of the guidelines, which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical,” the revised guidelines no longer contain this safe harbor.

You need to know the “typical results” and disclose what these general results are and the depicted circumstances. You cannot just throw up the best case example.

This is a problem for a lot of marketers because they may not have data to support a testimonial and realize it will cost a lot of money to obtain that data.
When using a testimonial in your marketing, you now need to:

• Verify that the person giving the testimonial has actually achieved the stated results
• Verify the typical results a consumer can expect to achieve, and state them
• Verify that the testimonial still stands if you make a change to the product being endorsed

If you cannot substantiate the “typical results” you have three options: not use the testimonial, do research to find the typical results, or use the testimonial anyway and take a risk.
 
However, there is another option.

During an interview with Jim Edwards (igottatellyou.com), FTC assistant deputy Mr. Rich Cleveland clarified that you could create a relevant sub-group for which you CAN collect the data you need in order to make the disclosure. Using Mr. Cleveland’s webinar example, let’s say you have created a “how-to product” with a program that teaches people “how to increase your sales in door-to-door selling.”

You define what the criteria is, ie., willing to go out and knock on 100 doors a day, willing to work at it for five days a week, willing to sell a product that costs at least $50.

“So, if you are willing to do this, this, and this, then based on this sub-group of 100 people (we’ve sold a 1000 of these courses) we have 100 people who have submitted their results. We’ve averaged them out, and these are the results that are average for this group.”

You are defining the criteria for the sub-group. Note that the sub-group cannot be just one person – it has to be a relevant group.

To sum it up, yes, you can use testimonials. But you should avoid using testimonials that are an extreme example instead of those that are closer to typical.

If you have these on your website right now, you can modify them and delete the “I made this much money and you can too” language, remove the testimonial entirely, substantiate the claims, provide data from a sub-group/define the criteria, or risk having the FTC in your face.