Feb 16, 2010, post by
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.
Next time we’ll talk about disclosures, stay tuned.
References and recommended reading:
http://www.ftc.gov/bcp/edu/pubs/business/ecommerce/bus41.pdf
http://www.joelcomm.com/new_ftc_rules_for_testimonials_1.html
http://www.igottatellyou.com/blog/ftc-change-interview
Jan 19, 2010, post by
For those who run an online business or use e-mail marketing as part of their marketing strategy, using analytical tools is important because how else are you going to know if you are on track and meeting your marketing goals? Or how are you supposed to know if your e-mail campaigns are working?
Now I don’t think the average small business owner intentionally overlooks this necessary part of his or her business on purpose. I think the owner understands that it has to be done but perhaps he or she is unsure of what it is that is to be measured. Or perhaps he or she is measuring statistics but doesn’t know what is considered to be a “good” statistic. For example, do you know what is an acceptable e-mail broadcast open rate and what is an exceptional open rate for your industry?
Whether it’s a newsletter or a simple broadcast e-mail, most of the autoresponder programs have a tracking feature so that you can see statistics of your e-mail campaigns. For this article, I’m going to explain a few marketing metrics using Aweber.
In Aweber, click on the Messages tab, then click on Broadcast. You will see all of the sent broadcasts. This one screen can tell you many things. First, you can see if your e-mails are bouncing (unable to be delivered due to software and/or hardware issues of the receiver), complaints, percentage of “Opens,” and number of “Clicks.”
Bounces
Bounces (and unsubscribes for that matter) are part and parcel of e-mail marketing and will occur even with the cleanest and most targeted lists. If the rate is too high, it is good to understand why these bounces are happening and to take steps to minimize the percentage rate.
There are two types of bounces: soft bounce and hard bounce. A soft bounce means that the address was found but the delivery attempt failed due to other factors. A soft bounce may include: inactive account, temporary domain failure, out of office reply, mailbox full, and e-mail limit has been exceeded.
A hard bounce is an attempt to send an e-mail to an address that has failed typically because of bad address syntax (missing the “@” or period), unknown user, unknown domain, or invalid address.
Just realize that soft bounces can occur for a variety of reasons: people move, change jobs, graduate college, change e-mail addresses, try out a new free e-mail service, change their ISPs, etc. and they don’t always remember to update their account information with their newsletter providers. In fact, statistics from the research marketing firm NFO WorldGroups show that there is a 31% turnover rate in e-mail addresses over a 12-month period.
An average bounce back rate for a list that is mailed regularly (at least once per month) can range from 2% – 5%. An average bounce back rate to a list that is mailed less regularly can range from 5% – 13%. My advice is to just monitor this statistic to make sure your e-mails are being delivered.
Opens
Opens refer to the percentage of people who were sent the e-mail actually opened the e-mail. Also, an open rate is only valid for people who receive HTML e-mails.
It is not as easy to provide “average” statistics for open rates because industry averages vary and because each list has its unique characteristics. However, industry metrics at least let you see if you’re way off with your numbers. If the average open rate in your sector is 40% and you’re getting 10%, you know you have a problem. If you’re getting 70%, you know you’re doing quite well.
According to Epsilon.com (October 2009), the average open rate is 22.2% across multiple industries. Here are stats from one e-mail broadcasting company showing that the e-mail open rate for the average freelancer is 32.95%. Check out the list to see what the average is for your specific industry.
If your open rates are pretty low for your industry average, then there are some things you can look at.
1. Subject lines – In Aweber, you can do a “split test” using different subject lines to see how one performs against the other. It could be that your subscribers prefer personalization (adding a first name in the subject line), the subject lines are not motivating them to open the e-mail, or they may be too spammy.
2. Timing – I wouldn’t suggest that you all of a sudden change your newsletter delivery day as you may throw off subscribers, but you can always do a split test with the time of day you are sending your newsletters or e-mails. For example, in one split test noticed that when I sent an e-mail later in the afternoon, around 2-3 pm Eastern Time, I enjoyed a higher open rate (perhaps for the simple fact that I am not competing with the morning “spam” mails).
3. Try adding images – Try adding a little color or images if you are just sending out HTML e-mails that contain only texts and hyperlinks. Try adding your picture!
Aweber has a lot of good blog posts and articles about this topic, so just check your list manager’s knowledgebase for tips. To get started, get familiar with your program’s analytics and reporting features so that you can gauge the effectiveness of your e-mail broadcasts and campaigns. Just remember not to follow every single suggestion or you may break your readers’ expectations by changing a lot at once.
Learn more about marketing metrics, as well as measuring click-through rates and how to use Google Analytics, in my Quick Start Marketing Your Online Business training program – get it today!
