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Follow The Yellow Brick Road
Your Marketing Might Be ILLEGAL and Here’s What the FTC Won’t Tell You
00:31:11
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- [00:00]
A
Did you know the FTC has fined businesses over 5 billion, that's billion with a B in recent years for deceptive advertising? Could you be next? Very often marketers have misconceptions about compliance and their duty to uphold the regulations that the FTC has put forth. So what do you see the most? What is the most common misconception in our industry?
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B
Everybody else is doing it. Everybody else is out there doing it. So why can't I? The problem is think about when you're speeding on the highway, they're going 95. Then you get pulled over. Doesn't matter.
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A
10 cars around me are doing 95. I can't tell the copy. Welcome to the Special Ops podcast where we give actionable insights to entrepreneurs. Today we're going to be shaking things up and doing something new. Ryan Poteep from Gordon Reese and I have decided to create a spin off. Welcome to Marketing on Trial. Here we're going to break down compliance, particularly for direct response marketers, online sellers and e commerce brands. Oftentimes legal compliance can be overwhelming. But Ryan and I have helped hundreds of entrepreneurs navigate the waters of compliance with over three decades of experience between us. We are here to share what we know and how to execute it. So let's dive in. Today we're going to be talking about the FTC. Did you know the FTC has fined businesses over 5 billion, that's billion with a B in recent years for deceptive advertising. Could you be next? Today we're sitting down to discuss what marketers aren't being told about consumer protection laws and how to make sure you're not next. Don't forget to like and subscribe because when you do, you get notifications every time we put out a new episode. Also, if you're interested, we co authored checklist called the FTC Compliance Checklist. You can head over to www.specialopspodcast.com and sign up for our visionary vault. There you'll get loads of tools including that FTC compliance checklist where you can which is going to help you audit your marketing for legal risks. So why your marketing might be illegal. I'd love Ryan, for us to talk about first misconceptions. Very often marketers have misconceptions about compliance and their duty to uphold the regulations that the FTC has put forth. So what do you see the most? What is the most common misconception in our industry?
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B
Everybody else is doing it. Everybody else is doing it.
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A
So without even a pause you say this?
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B
No, it comes.
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A
I hear you've heard that quite a bit.
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B
Quite a bit. No, it's every client call, they're like, this company's doing it. This company's doing it.
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A
They're doing $100 million, Emma, and they're doing it. Why aren't they in trouble? Can't we just tell on them? No, that's not how this works.
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B
No. And it's a crapshoot because enforcement actions are just like a roll of the dice. Why some people get picked.
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A
Yep.
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B
Some will never know for most of them. But yeah, it really is. Everybody else is out there doing it, so why can't I? The problem is, you know, think about when you're speeding on the highway, you're 95 and you get pulled over.
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A
It doesn't matter if 10 cars around me are doing 95, I can't tell the cop. You can't pull me over.
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B
No. I drove up here from Houston, like for people left and right, it didn't.
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A
Matter how fast we were going.
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B
Yeah. So I mean that, that's the biggest one. And I think the other misconception is if I plug it into Chat, GPT or Google or something like that, I'm just going to get some answer that I can basically hobble along with and that'll be fine. The problem is it's a lot, usually a lot more complex think of environmental claims and things like that but. And so people just don't really know where to look or they can rely on Google or ChatGPT.
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A
Yeah. So pretty much every aspect of our.
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B
Businesses is regulated by some law, tangentially, at least, whether or not it's.
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A
The FTC has an opinion on everything we do.
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B
Pretty much. It doesn't matter what vertical you're in, the marketing channel that you're using, there's something out there that's going to govern what you're saying and how you can say it.
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A
So as consequence of not following their guidelines, their rules, their regulations, you can end up with a letter, a takedown letter, millions in fines, even jail time. I want to focus for a moment because there's some new things that have happened, happened in January and there are just like some, they've got a hard on right now for certain components. So I'd love to just walk through what are some of the things people don't know that could cost them millions a second they get caught doing it.
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B
Yeah, I think the easiest one out there, subscription billing compliance.
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A
I mean it's continuity.
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B
Continuity.
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A
Our continuity products.
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B
I think it's not difficult to do.
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A
What are people doing wrong they're either.
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B
Not disclosing that people are enrolling into a subscription, or it's a membership program that is not fully disclosed. Basically, you get to the checkout page and you're enrolling in a subscription. Nobody really knows that. Enrolling in subscription.
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A
I think a lot of people don't understand the rules around subscriptions and force continuity. And the pre checked box versus the not pre checked box versus the pre checked box, that can't be unchecked. And if you've been listening to me long enough, I've talked about this quite a bit and we'll probably talk about it quite a bit in the coming months on this podcast. But I want to know. I want to be compliant. I don't want to get in trouble. I want to make a lot of money and I want to have a subscription. What is your advice to me on how I make sure that my subscription part of my product is on the up and I'm not going to get in a whole lot trouble for. So the example, besides calling you and having you review it for a gazillion dollars.
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B
No, the example I use is go ask your grandmother, go ask her. Give them your enrollment path.
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A
Okay, okay. I was like, go scramble with the FTC thing.
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B
Going to be fine with that. No, give your enrollment path to somebody who's older than you, you know, preferably over 65.
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A
Right.
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B
Not super tech savvy. Have them walk through it, have them make a test purchase or they don't need to click the button, but basically get to the end and then start asking questions. Be like, hey, Grandma, would you buy? How often are you being billed? And if the answer is, I think I only bought one bottle, you're going to have a problem. Because that's the lens that regulators and to be honest, consumer protection attorneys are going to be using. You're going to get grandma from Nebraska enrolled in dietary supplement and she thinks that she's buying one time and then suddenly she's in a subscription. So at the end of the day, you want your subscription billing disclosure or just your continuity model. Be clear, unavoidable.
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A
Like all the, you're going to pay me $49 a month. I'm going to send you every month and the third of the month and this is how you cancel.
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B
Yep. And if we're hiding the ball, then that's gonna be a problem. If there's any question, especially now with the new regulations in place. Okay, if there's any question, by the time you get by, you hit that. Either buy now button or whatever you're using at the end on the checkout page, if there's any question whatsoever what you're buying, how often you're gonna be billed, there's gonna be an issue and it's not really defensible anymore.
- [06:20]
A
Really? That's great to know. Terrifying. By the way, I'd like to go into. Deceptive advertising to me means misleading claims, it means exaggeration of claims and it means improper evidence of claims. So I'd love to dive into that because I think that for the most part, people who are selling understand what they absolutely cannot say. What they don't understand is how to say what they can say. And so just because it's true doesn't mean that I can say it. I'd love to. Yeah, go.
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B
No, just getting the brass tax of it. You summed it up. An advertisement needs to be truthful, not misleading, improperly substantiated. And so you can have a statement that is perfectly truthful. I've got 5,000 five star reviews. Look at how great I am. Okay, but just because that is true, if you have 10,000 one star reviews quoting that, hey, I've got 5,000 one star reviews.
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A
But it's true. No, but okay.
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B
Because the.
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A
I didn't know. I didn't know this.
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B
It's all going to be coming.
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A
Can I try and play with words?
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B
Sure.
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A
Okay, so just ask one of the 5,000 people that left me a five star review.
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B
Doesn't matter because the impression, the net impression of that statement is going to be a majority of consumers really like my product. And so you're hiding the fact that there's all these. An Overwhelming number of 1 star reviews out there.
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A
Twice. Yeah. Wow. Okay, so I would have guessed that I could have said that. That's really interesting. I want to move on to lack of evidence of what's true. And I want to just go through what the rules are of what you need to keep for evidence. And then I want to play around a little bit on how we've made those things happen in the past and share some of those things. So yeah, I have a ton of clients who call all the time and my customer service clicks a button and it tells me that 9 out of 10 of the people who call in love the product. But I've kept no record of this. Can I say it? Yes, but no.
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B
Yes, but no. What you need to.
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A
How do I 100% get a yes from you? Let's go there.
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B
Pay me.
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A
I've given you a lot of Money. I'm pretty sure that's how you get your car.
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B
And huh, no.
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A
Which by the way has never taken me for a ride in one of these days.
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B
So there is usually always a way to say something that you want to say. Very rarely will we say absolutely not. You cannot say that.
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A
Okay.
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B
There's usually a compliant way to say it.
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A
Okay.
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B
The devil's just in the details. So if you want to talk about how your product works or how efficacious it is.
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A
So let's go over efficacy for a minute because I, I had this conversation the other day for 40 minutes. He looked at me and said, what's efficacy? So what is efficacy? What's maximum efficacy? What does efficacy mean?
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B
So if you say your product does X, Y and Z, you're saying that your product is going to do it.
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A
So if you say at what you've prescribed your product as, so if it says take two tablets twice a day.
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B
And it will support healthy liver function or something like that.
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A
But all of the claims say that you had to take nine times what you put in your product because you're a cheap skate or because they had to take four of the capsules and you didn't want it to be confusing copywriters. So yeah.
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B
So whenever your dietary supplements is a great example. So whether it's white label or you formulated this, most often people go out and they just google and they're like, ashwagandha, what is ashwagandha do? And so I see it has some stress relieving properties. Great. And they look at a bunch of studies, typically they're from overseas.
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A
Right. And they'll say 86% of people suffer less stress, depression and anxiety when taking Ashwagandha.
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B
Not even that. I'd go a step further. It's an animal study where they're giving them 6 grams of ashwagandha in one day.
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A
They're chilling like they're stoned and it's a mouse.
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B
So. Or even in the human studies they're giving them 6 grams or whatever a day. But your product has 500 milligrams. But no, there's just a massive disconnect between what science says will support your claim. What are you advertising your product will actually do? It depends on what vertical you're in, what product you're trying to sell. If you're selling a health product, need competent and reliable scientific evidence. If you're getting into green claims or recyclability composting, you need to be able to prove that your product actually does It.
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A
Right.
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B
And there's usually a statute out there.
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A
So let's talk about how to prove it. Okay. I'm going to go to a couple of different products that we can give some good examples. And I'm actually going to utilize some things that you and I have done in the past few years to help our mutual clients achieve these things. The first thing I want to talk about, and I'm just going to go over here to bring it back so you can have these double blind studies done We've talked about. This is very expensive. That will allow you to make a lot of claims. Right. But one of the easiest, cheapest ways that we found that's super effective is to do a true survey on our own customer base. And so you and I have done this on an ED product, which is a Class 2 medical device water pump, remember? Okay. And so I want you to walk me through. I want to be able to say, so as A class 2 medical devices, lots of things I can say and can't say. So I can say, where are some things I got. So I can say it supports male erectile function. Okay. Can I say that? So I always do it on camera. I will say erectile, absolutely.
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B
Because that Class 2 medical devices will.
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A
Restore sexual health probably. Okay. Will increase your size by 2 inches.
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B
Absolutely not. And the reason the FDA said that these products are approved for certain purposes, male enhancement is not one of them.
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A
Okay.
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B
So setting aside the regulatory issues, and this is where it gets into.
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A
Because here's how we do it. Here's why you get paid the money. You get paid. How do we do that?
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B
No, but so everything, even before we go here for a second, okay, everything is going to be on a risk scale. Some businesses are very comfortable with the risk. Some businesses are not.
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A
Some businesses like to make millions of dollars and some billions like to make tens of thousands.
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B
Yeah, you want to be on this risk tolerance scale, typically probably around a 7 or 8 where you get to keep most.
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A
So let's talk about the risk tolerance scale. Because most people, in my mind, most people would think 10 is, oh God, I'm going to jail, and one is perfectly fine. But it's actually the opposite. So 10 is, I'm Brick and mortar. I'm making my own knit products and I'm selling them for cash only. Because no online seller is a 10 or a one is, yo, you gotta stay in Spain for a couple more days because you might get arrested on your way back into the country.
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B
Yep, we have that. So most businesses want to be Around a seven or eight means that they're competitive, they're taking on a certain amount.
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A
Of risk, but they're not going to get huge fines. They're not going to get takedown notices. They're not going to.
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B
Yeah, they're nipping into some of the, like the class action liability risk. They're still being aggressive enough to be competitive in the market. But the FTC could still always find an issue. Because the FTC could always find an issue with something. But you want to make sure that you fall somewhere on that risk. And taking it back to what we were just talking about with the ED pumps, the FDA very clearly says that this Class 2 medical device is approved for this purpose. You can advertise it for X, Y and Z. Male enhancement is not one of those.
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A
Okay.
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B
And so business has to make that judgment call.
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A
I thought you were going to say the business has to make that up. I was going to say, Ryan, no. The business doesn't make that judgment call if they feel comfortable with a little bit more risk. But you can do it. How do you do it? Because there's a way to do it.
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B
The more compliant is ish way to do it would be to run a consumer survey so I can create 40 questions.
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A
I saw one inch or more of growth. I saw two inches or more growth. I was able to function sexually 90% of the time. I was able to function sexually 80% of the time. I can send my previous 10,000 customers the survey. Right.
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B
Send it to everyone.
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A
And then I get statistical significance back. I disclose how many people went to what percentage responded. Let's say 94% said they grew two inches. Now, now I can say 94% of my customers grew two inches, technically.
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B
So assuming that we put the survey together, we're not just randomly picking, as opposed to, we know these people are posting all over Instagram that they really like it. We send it to most of our customers. We could even incentivize it, saying, hey, we'll give you an Amazon gift card if you use a consumer survey or lubricant, sure, you can get that kind of critical mass.
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A
I promise I'm not going to make all of these this uncomfortable. Just trying to loosen you up a little bit.
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B
So once you get all these survey responses back, you know, you're going to look at them, you're going to pull out the data that you like. You frame it in a truthful way. It's a survey of 10,000 customers with X number responding observed. Whatever you're trying to say as long as it's true. That is one way to make the claim that you want to be making.
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A
Without spending $2 million on study that some scientist is going to do on your behalf of the product.
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B
Now, I will caveat that.
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A
Okay, of course you will.
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B
Because you know we're talking about.
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A
Because you don't like phone calls or nasty comments.
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B
Because it's all going to come down to the product you're selling and whether or not. Like if you're selling a health product.
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A
Can we disclaimer in a different.
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B
Sure.
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A
If you have an attorney, you should call your attorney and ask your attorney, can I do it this way? This is what I want to do and help them guide you. If you don't have an attorney, contact Ryan Potee. You can go to Gordon Reese's website and look him up and he probably won't answer your phone call because your name is an Emma. But. But contact Ryan Potee. We can drop his email in the show notes and just contact an attorney to walk you through. But this is a basic idea of how you can get these things done. And you're going to pay an attorney to help you do a proper survey way less than you are going to pay for an actual study to be done. Can we move on to the next product? Do you feel comfortable with that?
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B
We're good.
- [15:31]
A
See, he's an attorney, so he's going to cover his ass all the time. It's crazy to me. Okay, I want to just move on to one more product type because we've talked a lot about CLP ones. I don't want to necessarily talk about those because they're already approved by the FDA and there's like so much that they get to do. So much more than everybody. Let's talk about weight loss supplements.
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B
So about GLP1 activators. Great example. All over social media.
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A
Yep.
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B
Take this GLP1 with Vader. It's a dietary supplement. Random collection of dietary ingredients in there. Take this. It's going to activate the GLP1 protein.
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A
Okay.
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B
That will help you lose weight. Dietary supplement regulated by the fda. If you're out there saying that this product is going to help you lose weight, you actually have to back it up. It's like we were talking about the Ashwagandha.
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A
Yeah, yeah, yeah.
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B
It's same thing, same principle. If you're going to say your product does this, you're going to need, at the very bare minimum, ingredient studies, technically, human ingredient studies. And then the best evidence would be actually random clinical trial on your Own product. But if you're going to be able to go out there and say this product helps you lose X amount of weight, you need to have something on file that's going to back that up. Not just simply. I know this thing is going to work. Which we've seen before a couple times.
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A
Love it. I want to move on, though, because we have a lot to cover. So the next thing that I would really like to cover is false urgency marketing, one on one is create urgency. We don't survive if we don't create urgency. So people put countdown timers. People say, big Pharma shutting me down. People say, 200 bottle left.
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B
No, the FTC hates it.
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A
Right. But what do I get for what Is that in your number scale? I want to move into pricing next, but let's just go into urgency right now. What's that on your number scale? Yeah, like I got a countdown timer. What's that on your number scale?
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B
So here's the thing.
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A
When we're looking at word salad, he's never.
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B
No, no, here's the thing. So in isolation, not a big deal. Ryan saying not a big deal.
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A
Okay.
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B
You put that on top of false and deceptive efficacy claims, hidden continuity and all that. It's just. You put it all in a salad.
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A
Bowl and it's like Marcus Spargov. Yeah. How many things are you doing that are not compliant that you don't even realize? Because most marketers, most online sellers.
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B
Because the FTC complaint will read online marketer deceptively or deceived consumers into buying this limited supply of.
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A
We. We've read them, deceived the elderly.
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B
Oh.
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A
And defrauded them out of $2.1 million. Because you put a countdown town. That timer. That's real. That's a real thing. That's a real thing.
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B
When you're getting. The FTC calls all this a dark ride. It's. If you are using these marketing tactics to create this false sense of urgency because you really want these people to buy these products, it's material to their decision making. It pretty much usurps their ability to make a rational purchasing decision. Because if they knew they can get this sale later or it's not really going to run out, then they might not actually buy it right now. They might actually do a little bit more research. But we've all been there and you've seen, oh my gosh, think airplanes. I think it's gotten a little bit better in the past couple years. But when you go to Google flights and all of a sudden you just see the prices creeping up. You start buying your flight a little bit earlier.
- [18:27]
A
Do you think that it's gotten better corporate travel? I was just going to say your company's clearly banging your flight but you're.
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B
Sitting there, oh my God, I can't go to this conference. I can't go to this meeting or if I don't or your operations you plan for or my kids vacation is going to be in jeopardy if I don't buy these tickets now. So you buy it now. If you had a little bit more time to search, you probably would have found that Southwest is flying there for 99 bucks or something like that. But you paid way more over here.
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A
Right.
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B
Because you're worried about that opportunity disappearing. So FEC hates it. Consumer protection attorneys love it.
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A
Great. We can't do it. Can't do it, can't do it. How do we do it? How do we create urgency? And I'd love to give you, I'd love to play a game again. I'd love to give you some of my ideas. Fast acting premiums that actually go away.
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B
Absolutely.
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A
So I'm going to give you product A and your first month in my membership free which will actually help your conversions on your continuity product. Making sure that you disclose that you're going to charge them and all that others. Put that little caveat in there for you, come for me. But I'm going to give you my first membership free if you buy in the next 15 minutes. Countdown timers there.
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B
Yeah.
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A
And it actually goes away even if I retarget them with the same thing over and over again. It goes away in that moment for that.
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B
Truly.
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A
I bet if you tested that. I've tested it where it worked and where it didn't work. But most of the time it works. They buy it on the retargeting and then you don't got to pay the affiliate. Sorry, affiliate. Okay. So I'm going to have so many comments over that. So another way to create a sense of urgency. They're going to scroll off the page and you see this all the time. I'm sitting at a product that's for we'll say weight loss and I go to scroll off and you see the pop up come up. Big Pharma is shutting me down. I don't know if I'm going to be here tomorrow. What's another way I can do that?
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B
Don't lie to consumers and create an incentive 100%.
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A
But can I give you some ideas on how and you could tell me I Don't even know if it's going to be illegal. We'll save. Let's see how much I actually know. Okay, I'm going to scroll off the page and I scroll to the top and instead of saying big Pharma, it says, wait, are you sure you want to go? Click here for an extra 15% off.
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B
That would be fine.
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A
But you always get a.
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B
That's fine in isolation. Totally fine. If you want to incentivize consumers to buying now, that's fine. Scaring people into buying now is a different.
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A
I agree. The big pharma. No, you just want to go. But we already said that's bad.
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B
But hey, if you want to buy this now, you will get an extra 15% off your quarter. The counter argument to that is it's still deceptive because you're trying to lean on consumers emotional fear that they could not get the same offer in the future for the same amount of money or at least less money. I think incentivizing is fine. Continue to try to encourage consumers to make a purchase.
- [21:05]
A
So I'll give you another one. Okay. So I go to scroll off the page and a lot of times you'll see and don't come at me. I've never ever done this. But you go to scroll off the page and it says, wait, Big pharma is trying to shut this page down. I don't know if this will be here tomorrow. Absolutely. Can't do that, right? Can't do it, Right. Sure. Here's a way that I think possibly you could do it. Perhaps maybe they go to scroll up the page and it says, wait, this product is really amazing at X. If you try it today, we like to offer you an additional 15% off.
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B
Fine. No problems there. Because you're not trying to convey like, hey, if you don't do this now right, you're not going to be able to get it again in the future. It's just, here's one more incentive why.
- [21:41]
A
You should be, why you should buy it. Yep.
- [21:43]
B
Instead of scaring people and oh my gosh, it's going to go away. I'm not going to be able to get it again. This is such low quantity that I'm not going to be able to get it in the future. I have to buy today. It's just if you want to make a purchase today, we'll give you an additional incentive.
- [21:53]
A
You want people to feel not scared about their purchase.
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B
You're not worried that if I don't.
- [21:57]
A
As a marketer, you want them to.
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B
Feel scary, doesn't want people to feel scalable.
- [22:00]
A
So you have to find the balance and making them feel like it's going to solve a problem that they have not been able to solve, that they feel like their life is not going to be what it could be without it, and that they are incentivized to buy today without making them feel like the product is going to go away if it's really not correct. Okay. All right. So that was fun. I want to talk about pricing because I actually learned something from you quite recently that has completely freaked me out, honestly, because I had no idea. There's a lot of different things about pricing and I'm going to. Actually, after our conversation yesterday, we went to dinner with some friends of ours and before dinner we were talking and you told me that you can't use strikeouts on pricing. So we're going to go through that in a second. But then I thought of some other things, so I'm going to segue us into that. I do split testing on pricing, so I feel like this is okay, but I feel like you might tell me it's not. So I may have the Same link on 50% of my traffic go to a 47 price point and on 50% of my traffic go To a 69 price point. Is there any issue in pricing with that? Split testing pricing?
- [23:03]
B
No, split testing pricing is fine.
- [23:05]
A
Okay.
- [23:05]
B
It's the strikethrough pricing component.
- [23:07]
A
Okay, perfect.
- [23:08]
B
Yeah.
- [23:08]
A
So this is how, by the way, I don't pay him the $715 an hour. That's a simple question. I'm just kidding. So now let's talk about strikethrough because I have not seen a checkout page in a really long time for supplements, for gadgets, for tools, even where it didn't have the price. A strike through the price at a cheaper price. Even on tv. I. I can't think of a checkout page that you're not gonna pay. You're not gonna pay. This is what you're gonna pay. So walk us through why this is wrong and how we. And then you let me know how we do it.
- [23:43]
B
So when you're advertising a sale or a strike through, you advertise the prevailing market price. And in lease California, the prevailing market price for the last three months. And so you actually need to the price that you're striking through the full retail price, you actually need to sell the product at that price. Not only do you need to sell it, regulators are going to say you need to sell it and we need to See a substantial number of unit sales at that price. And we've seen a ton of class actions. I've got a couple of them right now on strikethrough pricing. And it is you have falsely represented that this retail price was the purchase price and that these consumers are getting this deal that never existed. And what you're actually selling is the this product at full price, but misrepresenting it as a sale. And the way to do this is one you were talking about split testing on pricing. Totally fine to do that. You can also have different channels where you're selling products. And so you might have your Amazon account or your Amazon storefront. That is where things are listed at full price. You might run a promotion on your main website or sales page or something like that. But what you need to be able to show is that you're actually selling the product at the sale price or at the full retail price. And so often people don't do that. They come up with some number that they think sounds great. They slash it through and then say 99 today that you can't do.
- [24:57]
A
How do I do that? How do I make that same outcome happen?
- [24:59]
B
Yeah, so you need to be up advertising it and selling it somewhere for the full retail price. Okay, now I know where you're going.
- [25:07]
A
Light bulbs are all over the place.
- [25:09]
B
So your next question is, what if I only drive my traffic to. I don't drive any sort of traffic to my Amazon sales storefront or Shopify.
- [25:17]
A
Or do I have a storefront shopify or Amazon where I just put something up. I have no traffic to that price is $149. That the strike through price that I use on where I actually send my traffic.
- [25:30]
B
So that's where you, that's where you're going to get into an argument over whether or not that is actually the prevailing market price for the last three months. And so you might be actually selling, but it's not the prevailing price. And so you will get into a back and forth with opposing counsel or regulators of saying, yeah, I get that you're advertising in a Walmart or Etsy or any of these storefronts, but you have 10 sales. Like how, how can you use that as this is the prevailing market price? This is what most consumers have paid over the last three months that you get into a difficult spot and you start having to do some word gymnastics to try to argue around that. But so long, I mean, depends on how many sales you have. A lot of people will go and buy a ton of stuff off of Amazon. I mean, I do it all the time. I don't search around because it's just easier. And so some Amazon storefronts will have a ton of sales just because they make it so easy. So it's a lot more easy to substantiate that. Yeah, your product is 99.95amonth or 99,95. Whatever the price is.
- [26:24]
A
And so can I tell you I like Amazon.
- [26:25]
B
Why?
- [26:26]
A
A couple of reasons. Number one, I don't worry about some BS and I'll even go look at terms and conditions. I don't have to worry about some BS charge coming in that wasn't disclosed to me because a lot of people do that, that I buy one time and that's it. Number two, I don't have to pay shipping and handling. I don't know why, but I would rather pay Amazon $10 more for a product than pay you $4 for shipping and handling. I have no idea why.
- [26:45]
B
Well, and I have no idea where the package is either. At least with Amazon, I know it's going to be there in two days.
- [26:50]
A
Not only do I know it's going to be there in two days, but I know it's actually going to show up. And if it doesn't, I'm not going to call anybody. I'm going to send a quick chat and I'm going to get my money back immediately. So there's just so many aspects to this. But okay, so the answer on Amazon is you can't or Amazon or. I don't want to just say Amazon because I would probably not do Amazon. I would probably do Shopify.
- [27:11]
B
Okay, the takeaway from all of this, if you're really running a fake sale.
- [27:15]
A
We'Re not going to call it a fake sale. We're usually no better than this. We're not running a fake sale. We hope to sell on Amazon, but our traffic dollars are going into a funnel with an upsell flow, whereas Amazon. I don't have a funnel with an upsell flow. As my attorney, I would advise you to advise the FT that on Amazon I can't gather their data. So their lifetime value isn't worth as much to me. But it's also because I can't retarget them.
- [27:43]
B
That's true, but it's also on the the prevailing price of that product. I don't care about the lifetime value of the customer. It's the product.
- [27:50]
A
Fair enough.
- [27:51]
B
So I tried if it is fine to do this, but you need to be able to show that you're actually making Sales.
- [27:58]
A
Okay.
- [27:58]
B
And so there's there what percentage of sales that's going to depend on.
- [28:02]
A
Okay. Probably get in for strike through pricing.
- [28:05]
B
So consumer class action liability you typically brought in California. You're looking at stats by the way.
- [28:10]
A
Just don't sell in cals.
- [28:11]
B
It's the 13th largest economy in the world. People need to sell there. I would say a good 30% of your sales just picking a number out of a hat. A good 30% of your sales needs to be coming from the full blown retail price. The problem is, is that actually prevailing because if you're only getting 30%, I think it's more defensible. If it really is like single digit percentage you're going to have, you're going to be facing an uphill battle because it's going to look like an ephemeral or a false sale.
- [28:35]
A
Okay, this has been great. I want to just close with one more question. Health, beauty and finance, they're under the most scrutiny.
- [28:44]
B
Easy.
- [28:44]
A
Why?
- [28:45]
B
Because it's what everybody wants. Everyone wants to be healthier, everybody wants to be more beautiful and then everybody wants to be financially independent.
- [28:51]
A
So it's just the people buying more in those.
- [28:53]
B
Exactly. It's what everybody's constantly looking for.
- [28:55]
A
Got it.
- [28:56]
B
Everybody wants to work four hours a week and be a millionaire. Nobody wants.
- [28:59]
A
You know how you get money? You work really hard for it. Or daddy. All right, so Ryan, this has been awesome. This is our first of hopefully many marketing on trial.
- [29:10]
B
It's been fun.
- [29:11]
A
I'm going to just run through some action steps for our listeners. And so step one, audit your current marketing for risky claims. That's going to be like really important. Actually read through. You wouldn't believe the amount of business owners haven't actually read through what their copywriters have posted. Step two, ensure all your testimonials and endorsements are FTC compliant. So meaning you know you're following their guidelines and you have evidence of what you're saying is true. Step three, avoid misleading pricing scarcity tactics or deceptive fee trials or anything like that. We didn't really go into that, but I want to throw that one in there. Step four, get legal approval for your marketing if you're selling online, whether it's health, fitness or finance or anything. If you're following all these guidelines, it isn't going to take that long for your attorneys to run through everything and give you a hey, here's where your risks are. So take the time to do that. Step five, keep updated. Stay in touch with what the FTC is guidelines are today and what they're going after today. Whether it's that you listen to this podcast or other podcasts, you just simply read on the interweb and make sure you are educated in what you're selling and what your requirements are for the products that you're selling. So we hope you enjoy this episode. FTC doesn't care if you don't know, ryan said. If you're driving 95 miles an hour down the street and there are 10 other cars driving 95 miles an hour, the only person getting fined is you because you're the one that got full pulled over. Protect yourself. Now get the free FTC compliance checklist that Ryan and I co wrote at www.specialopspodcast.com in our Visionary Vault. Subscribe for expert insights to marketing, compliance and business protection right here and we will see you next time.
- [31:06]
B
See you guys.