FTC’s new rules mean business for Direct Sellers

In a recent post by twitter pal and Direct Sales Social Media blogger, Jennifer Fong, she discusses the FTC’s new rules about disclosure on blogs.

But there’s another rule that appears to be slipping under the radar right now – how using testimonials to market your services has changed.

Here’s a link to the full article from the FTC:

It’s worth it to take the time to read this. It appears on the surface to be a messge aimed at the advertisers – and as a direct seller, you are “advertising” on behalf of your company each time you do a demonstration or recommend your products and services to a potential customer.

These guides haven’t been updated since 1980, and in light of the recent rush to blogging for dollars, advertisers have capitalized on this “loose” method of endorsement, and the FTC is tightening up to cover this “new” media.

Most importantly, note the following paragraph:

“Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.”

So saying things like “this is an unusual case” or “results not typical” isn’t gonna fly anymore.

So if you’ve got a weightloss product, and a customer lost 48 pounds in 2 weeks, that doesn’t mean you can’t share that testimonial. On the contrary, you SHOULD – particularly because a lot of people won’t anymore. But when you share that, you ALSO have to share what the TYPICAL user experience will be.

For example, “most people lose about a half a pound a week, but Sally from Oregon lost an incredible 48 pounds in 2 weeks using our program.”

It’s in the wording – and advertisers will be held at their word. Just be sure you’re clear on what the typical results are for people.

The other area (that Jen addressed in her blog post) is a little more tricky – particularly for direct sellers doing product reviews for their own company products. In a newsletter or “closed door” communication, where a person has opted in to receive your content, it is easy to tell your readers that you are a consultant for XYZ company. On a blog, website or other online, public, “open door” type communication, many of the long-standing direct sales companies still have rules that outright forbid you from revealing any affiliation to their company, because they consider it “online advertising”.

There are a couple of ways to work this:

1. Don’t do product reviews on your blog – save them for your newsletter. It sounds silly, but instead of making public recommendations about your company products, offer tips and strategies they can use with any product, and then encourage readers to opt in to your private list so you can give full disclosure. This is a grey area, and because you’re not outright endorsing or recommending a particular product, you can safely get around this issue.

2. Brand yourself first. This really should be number one, since it’s my mantra. You are the most important product your company has to offer – and it doesn’t matter what company you represent. Your public presence should be used to further your OWN reputation, not that of your company or your products. Direct sellers that rely on product review type articles will never fully get their business off the ground. It’s a great place to start, but there are a variety of topics that surround your product line to which you should familiarize yourself. Become an expert in a topic related to your product line. Then you become known as “the expert”, not just the “xyz product expert”.

3. Get permission from your home office. A lot of copanies that say “no online advertising” put those rules in place to keep the mass of consultants from doing “dumb stupids” and posting erroneous info online. If you present a clear, focused proposal to your home office (someone that has authority to approve, not just a help center rep), you might be surprised at what you can accomplish. I was able to get authorization from The Body Shop at Home to do an entire online television series – when national advertising and online advertising were strictly prohibited.

There are other ideas I have on this topic as well, and I would love to hear your thoughts – particularly if your company has the same strict rules as many of the pillars of the industry do.

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