FTC’s New Ruling: Putting Evidence Behind Your Messages

Decoding the FTC New Rules on Testimonials
There's been a lot of talk in marketing circles lately about the Federal Trade Commission's new rules on endorsements and testimonials, which went into effect December 1 of last year. In a nutshell, the new rules require marketers to back up their testimonials with a clear explanation of how the results were achieved. To help us understand the new rules, the FTC provides an example of a testimonial that's no longer acceptable:

"I lost 50 pounds in six months with WeightAway."

What's wrong with this statement? Well, the FTC says it could be misleading because there's no way to tell if this particular result was typical. To remedy this situation, the FTC says testimonials need to provide context for the claim -- in this case, a description of all the factors contributing to the weight loss. Thus it suggests the following re-write:

"Every day, I drank two WeightAway shakes, ate only raw vegetables, and exercised vigorously for six hours at the gym. By the end of six months, I had gone from 250 pounds to 140 pounds."

What does all this mean for high tech marketers? We're not lawyers -- and we're not offering legal advice here -- but our guess is there's no need to panic. According to Michael Fortin in his excellent blog, it may just mean that you should "make sure that you accurately portray the steps that led to success -- which may be more than just your solution."

You may also want to tighten up some your publication processes. For example, Richard Cleland, assistant director of advertising practices at the FTC, said in a webinar that companies should consider asking customers to sign an affidavit to vouch for the accuracy of their testimonials. And he advises companies to update their customer endorsements regularly.

In the short term, though, we think the FTC's main targets are likely to be business-to-consumer firms -- like weight loss product manufacturers -- rather than B2B companies, which will probably have more time to adjust to the rules. What's more, penalties for first offenders is light: you get a warning and a chance to fix the issue.

On the upside, the new rules are likely to benefit companies that make a point of backing their customer stories with hard numbers and supporting detail. It may even breathe new life into an old art form: the customer case study. "Case studies are more powerful than blatant testimonials," Fortin says. "They give testimonials clarity, context, measurability, and weight. And best of all, case studies make testimonials more believable and concrete, which may even boost your sales."

Mainstay Partners has long promoted evidence-based case studies as an effective sales driver and we've built a practice around producing credible studies based on industry-standard ROI methodologies. It's no surprise, then, that many of our clients welcome the new FTC rules. "We've made it a priority to show the value of our solutions in the context of objective, fact-based studies," a client told us recently. "Customers prefer this approach, and now the FTC is telling us that's the right way to go to market."