Do you use endorsements or testimonials from customers in your marketing or advertising? Many business owners do. The power of referrals and quotes from customers can mean the difference between success and failure. However, you need to be aware of truth-in-advertising and endorsement laws. Likewise, if you use ask bloggers to write about your products, you need to be clear and transparent about your affiliations.

The Federal Trade Commission (FTC) oversees consumer protection laws in a number of areas, truth-in-advertising being one of them. So, if you intend to use customer quotes or endorsements from others to help sell your products and services, here’s what you need to know to ensure you comply with the law:

All Endorsements Must Be Truthful and Not Misleading

What does this mean? In essence, they must reflect the endorser’s actual experience and opinion. You also can’t use endorsements or testimonials that make claims about your products or service that you can’t back up with clear proof. We’ve all seen the ads that promise weight-loss miracles, often backed by quotes from customers testifying to their success. However, if there isn’t scientific evidence to prove that this is true, then you are effectively misleading your customers. The FTC can hold both you and your endorser responsible for deceptive marketing practices.

Endorsements Must Reflect Typical Experiences

In addition to being truthful and not misleading, endorsements must reflect the typical experience of consumers who use the product – not the experience of just a few satisfied customers. If an endorsement doesn’t meet this requirement, the ad must clearly disclose either what consumers can expect their results to be or the limited applicability of the endorser’s experience. It’s not enough to simply add a disclaimer like “Not all consumers will get these results” or “Your results may vary.”

So what are your options? Well, if the endorser’s experience isn’t typical, then you can go ahead and use the endorsement, but you must have adequate proof to back up the results that the consumer claims to have gained. Alternatively, you must clearly disclose the results that people can expect.

Example: Let’s say you manufacture or sell a product for which you want to make very specific claims – backed by a customer endorsement, such as a cosmetic wrinkle-reducing cream. Any quotes, testimonials or endorsements used must also be accompanied by a statement that clearly discloses the results that most people could expect in similar circumstances. And be specific: “Most users of this product saw a 50 percent reduction in the appearance of fine lines and wrinkles after using this product for 12 weeks.” It would also be a good idea to have a link to any data that backs up this claim, such as a scientific research study.

Tip: Let’s look at a real life scenario that many small business owners might encounter. Say you run a hair salon or landscaping business and you want to use a few customer quotes on your website – what should you do? Well, it’s a good idea to get permission from endorsers before you post their comments (and an absolute must if you intend to post their names). Likewise, it would also be a good practice to check that they are willing to be contacted for a reference if a potential customer wants more information about their experiences. Before and after pictures are also a great way to back up the validity and truthfulness of any endorsements or claims.

Disclose Any Connections or Affiliations to Your Endorser

If you have any material connection with an endorser of your product, you must disclose it. So if you pay bloggers or affiliate marketers, or even give them free samples in return for a review, you must disclose that relationship. It’s OK to use these endorsements in your marketing or advertising, but be sure to add a disclaimer. For example:

• Encourage bloggers or affiliates to follow the law by adding a disclaimer to their blogs or endorsements: “ABC Company gave me this product and here’s what I think…”
• In your own ad, state the material connection you have with a paid or compensated endorser: “We provided John Doe with a trial product for review, here’s what he had to say…”

What About Using Online Reviews?

Referrals and recommendations are an essential part of the small business owners marketing mix. Today, those reviews are increasingly part of the post-sales experience thanks to the popularity of independent online review sites like Yelp, Google+ Local, Service Magic, Angie’s List and more.

But can you lift quotes from these sites and use them in your marketing? If you check the Terms of Service of most these sites, user-generated content (i.e. reviews) are the property of the person who wrote the review. To use these reviews without permission of the reviewer may infringe copyright laws. There are other ways, however, to incorporate customer reviews into your website. Consider the following:

• Add links or plug-ins to your website that take people directly to your page on crowdsourcing review sites like Yelp.
• Use third-party rating and review tools, such as Shopzilla or BazaarVoice, on your site so that consumers can review products post-sale. Don’t forget to add a disclaimer notifying your customers that the review may be posted online and used for marketing purposes.  By using these services, your reviewers are subject to Terms of Service, which often includes giving consent to you as the website operator to use and publish their reviews, as well as certain biographical information such as name, alias, or location.

Because these reviews aren’t technically endorsements or testimonials and the reviewer has previously agreed to the Terms of Service, businesses (including many notable brands) often lift quotes from online reviews (remembering to strip out any biographical information that could identify the reviewer) and use them in email marketing, fliers and so on. If you have any doubt about the claims you may be making by using these reviews, consult an attorney.

More Information

For more information, consult the FTC’s Endorsements guide for businesses and check out this quick video from the FTC that summarizes what you need to know: