Get Customers With Endorsed Reciprocal Promotions

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endorsed reciprocal promotions

Grow your company with endorsed reciprocal promotions

Last week, I shared with you the strategy of sampling, one of 7 powerful methods for growing your business on the Internet.

As an Internet lawyer, I see many of my clients use samples successfully to acquire new clients and have used sampling myself in businesses that I own.

Today, let’s talk about a second strategy for growing your company.

Strategy # 2 – Endorsed Reciprocal Promotions.

How do they work?

Find complementary businesses online and set up a cross-promotion to each other’s clients.

Why are they effective?

The endorsement by a seller of a complementary product or service offered by you carries far more weight with the vendor’s clients than you trying to reach out cold to the same prospects. The same holds true when you endorse that business’ offering to your clients.

This only works where both offers deliver value. Don’t set up a reciprocal cross-promotion with a business that sells crap or provides inferior client service. It’s your reputation on the line.

Whether or not you get a cut of sales to your clients of the other business’ products, you still need to disclose the existence of a your reciprocal relationship to prospects who receive the offers so that informed purchasing decisions can be made. This isn’t only a good business practice. It’s also U.S. federal law.

In order to ensure that a reciprocal endorsed promotion goes well, you’ll want to have a signed written agreement with the other business’ owner that describes who is doing what and when as part of the promotion. Your Internet lawyer can draft an agreement to protect you.

Won’t a verbal agreement work? Rarely.

Without a written contract in place, there’s likely to be hard feelings or a sense of being cheated because one side believes the other has not performed as informally promised.

Next week, I’ll share with you a third method for growing your company this year. In the meantime, decide how you’ll apply sampling (Strategy #1) and endorsed reciprocal promotions (Strategy #2) in your business right now.

Deceptive Endorsements: Spokeo and the FTC

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There’s been a lot of focus in the $800,000 Spokeo settlement with the U.S. Federal Trade Commission (FTC) on alleged violations of the Fair Credit Reporting Act (FCRA).

However, it’s important to note that the FTC also went after Spokeo for purportedly engaging in deceptive trade practices with regard to endorsements. This is a big no-no, particularly after the FTC’s revised guidelines concerning endorsements and testimonials went into effect on December 1, 2009.

Here’s what the FTC had to say about Spokeo endorsement issue…

The FTC also alleged that Spokeo deceptively posted endorsements of their service on news and technology websites and blogs, portraying the endorsements as independent when in reality they were created by Spokeo’s own employees. In addition to imposing the $800,000 civil penalty, the FTC’s settlement order bars Spokeo…from making misrepresentations about its endorsements or failing to disclose a material connection with endorsers.

As an Internet lawyer, I see this issue all the time even though the FTC has made it clear that you can’t engage in a campaign of deceptive endorsements and testimonials. Expect the Federal Trade Commission to continue making examples until companies finally “get it” that such misbehavior is anti-consumer.

Online marketer makes costly legal mistake

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Internet attorney material connections disclosure

Are you disclosing material connections?

Here’s a recent case that your Internet attorney is probably talking about. There’s a company that sells how-to-play-the-guitar DVDs online that goofed up and got nailed by the U.S. Federal Trade Commission (FTC).

Because of the mistake, the business will fork over $250,000 to settle the charges the FTC brought against it.

Here’s what happened…

To boost credibility, the company used “consumer” testimonials and positive “independent” reviews that promoted the products online.

Unfortunately, the endorsements weren’t by consumers or independent. Instead, the positive endorsements were by affiliates who got paid commissions when sales occurred. According to the FTC, the company’s affiliates wrote “endorsements in articles, blog posts, and other online editorial material…”

Since December 1, 2009, the FTC has made it very clear that material connections, such as affiliate status, must be disclosed when promoting online. If you have any questions about material connections and disclosures, be sure to discuss them with your Internet attorney.

What’s the lesson?

You can’t pretend to be impartial when you’re actually getting paid commissions on the products and services you promote. Deception just begs for the FTC or your state attorney general to launch an investigation or even file a lawsuit.

Material connections extend beyond affiliate status. For example, if you’re promoting something because of your friendship with the seller, that needs to be disclosed too.

The goal is to give consumers all relevant facts so they can make an informed decision whether or not to purchase what’s being piked.

To your online success!

-Mike the Internet Attorney

Web Lawyer: Gaming your testimonials and reviews

By | Website Lawyer | No Comments

As a Web lawyer, I run into gurus who still make wild claims online in their sales copy, testimonials, and reviews because they haven’t been nailed yet by the Federal Trade Commission (FTC). The key word in this sentence is “yet.”

The FTC is cracking down against Internet claims based on the guidelines that went into effect last December.

Here’s an example of what not to do…

A public relations company was hired to post positive reviews of their client’s games. The PR business’s employees would write fake reviews of the software developer’s games in the iTunes store and then give the software 4 or 5 stars.

When the FTC got wind of this, they went after both the company as a corporation and the company’s owner as an individual. In other words, the PR business’s owner got put on the hook too for the testimonials without the corporate shield offering protection.

What went wrong?

Under the FTC guidelines, you’re supposed to fully disclose the material connections between the testimonial provider and product/service being promoted. Because this didn’t happen in this case, people reading the PR business’s positive reviews of the games could falsely assume the reviews were independent and unbiased.

If there’s a material connection that can taint a review or testimonial (such as being an affiliate for the product or service), that information must be disclosed so that readers can make an informed decision before buying. Your web lawyer can help you use choose the right words.

To your online success!

-Mike the Web Lawyer