The Special Ops Podcast is launching a new spinoff show! Join host Emma Rainville opposite Ryan Poteet from Gordon Reese as they delve into FTC compliance for direct response marketers, online sellers, and e-commerce brands.
Deceptive advertising has cost businesses over $5 billion in recent years, and many marketers don't even know they're at risk. In this debut episode of 'Marketing On Trial,' they discuss common misconceptions about compliance, the magnitude of FTC fines for deceptive advertising, and how to avoid being the next target.
Discover the most common misconceptions around FTC regulations, actionable insights on avoiding fines, and strategic steps to audit your marketing for legal risks. From misleading claims to false urgency tactics, we break down what you need to know to keep your business safe.
Be sure to grab yourself a copy of the free FTC Compliance Checklist available at the Special Ops Podcast website and subscribe for more expert insights to protect and scale your business. https://specialopspodcast.com/visionary-vault
(00:00) Introduction to FTC Fines and Compliance
(00:10) Common Misconceptions in Marketing Compliance
(00:44) Welcome to Marketing On Trial
(01:22) Understanding FTC Consumer Protection Laws
(04:28) Subscription Billing Compliance
(06:55) Deceptive Advertising and Misleading Claims
(08:16) Proving Claims with Evidence
(13:11) Risk Tolerance in Marketing
(16:09) Leveraging Survey Data for Marketing Claims
(16:42) Legal Considerations for Health Products
(17:45) Weight Loss Supplements and GLP-1 Activators
(18:37) False Urgency in Marketing
(21:13) Effective and Legal Urgency Tactics
(24:53) Pricing Strategies and Legal Pitfalls
(32:13) Conclusion and Action Steps
Get in Touch with Ryan Poteet:
Website: https://www.grsm.com/
LinkedIn: https://www.linkedin.com/in/ryan-poteet-43098ba
Get in Touch with Emma Rainville:
Website: https://specialopspodcast.com/
YouTube: https://www.youtube.com/@specialopspodcast
Instagram: https://www.instagram.com/emma_rainville512/
LinkedIn: https://www.linkedin.com/in/emmarainvilleoperationsguru
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Did you know that the FTC hasfined businesses over 5 billion?
(00:04):
That's billion with a B in recentyears for deceptive advertising.
Could you be next?
Very often marketers havemisconceptions about compliance and
their duty to uphold the regulationsthat the FDC has put forth.
So what do you see the most?
What is the most commonmisconception in our industry?
(00:25):
Everybody else is doing it.
Everybody else is out theredoing it, so why can't I?
The problem is think about when you'respeeding on the highway, you're going
nine, five and you get pulled over.
It doesn't matter if 10 carsaround me are doing nine, five.
I can't tell.
The cop
Welcome to the Special Opspodcast where we give actionable
insights to entrepreneurs today.
We're gonna be shaking thingsup and doing something new.
Ryan Pott from Gordon Reese and Ihave decided to create a spinoff.
(00:47):
Welcome to Marketing On Trial.
Here we're gonna break downcompliance, particularly for
direct response marketers, onlinesellers, and e-commerce brands.
Oftentimes, legal compliance can beoverwhelming, but Ryan and I have helped
hundreds of entrepreneurs navigate thewaters of compliance with over three
decades of experience between us.
(01:09):
We are here to share what we know.
And how to execute it.
So let's dive in.
Today we're gonna betalking about the FTC.
Did you know the FTC has finedbusinesses over 5 billion?
That's billion with a B inrecent years for deceptive.
Advertising, could you be next?
Today we're sitting down to discusswhat marketers aren't being told
(01:31):
about consumer protection laws andhow to make sure you are not next.
Don't forget to like and subscribebecause when you do, you get notifications
every time we put out a new episode.
Also, if you're interested, weco. Authored checklist called
the FTC Compliance Checklist.
You can head over towww.specialopspodcast.com and
sign up for a visionary vault.
(01:51):
There you'll get loads of tools,including that FTC compliance
checklist, which is gonna help youaudit your marketing for legal risks.
So why your marketing might.
Be illegal.
I'd love Ryan for us to talkabout first misconceptions.
Very often marketers havemisconceptions about compliance and
(02:11):
their duty to uphold the regulationsthat the FTC has put forth.
So what do you see the most, what is themost common misconception in our industry?
Everybody else is doing it.
Huh?
Everybody else is doing it.
So I, without even a pause, you say this.
No, it comes up.
I hear you've heard that quite a bit.
Quite a bit.
No it's every client call, they'relike this company's doing it.
(02:31):
This company's doing it.
So they're doing a hundredmillion dollars, 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.
No, and it's a crap shoot.
'cause enforcement actions arejust like a roll of the dice Why?
Some people get picked.
Yep.
Some we will never know for mostof them, but yeah, it really is.
Everybody else is out theredoing it, so why can't I?
The problem is you know, think aboutwhen you're speeding on the highway,
(02:52):
you're going 95 and you get pulled over.
It doesn't matter if 10cars around me are doing 95.
I can't tell the cop,you can't pull me over.
No.
I drove up here from Houston, likephone number people left and right.
It didn't matter how fast we were going.
Yeah.
So I mean that, that's the biggest one.
And I think the other misconceptionis if I plug it into ChatGPT or Google
or something like that, I'm just gonnaget some answer that I can basically
(03:12):
hobble along with and that'll be fine.
Problem is, it's a lot,usually a lot more complex.
Think of environmentalclaims and things like that.
But, and so people just don'treally know where to look or they
can rely on Google or chat GPT.
Yeah.
So pretty much everyaspect of our businesses.
Is regulated by some law tangentially, atleast whether or not it's the FTC has an
(03:33):
opinion on everything we do, pretty much.
It doesn't matter what verticalyou're in, the marketing channel
that you're using, there's somethingout there that's gonna govern what
you're saying and how you can say it.
So as consequence of notfollowing their guidelines.
Their rules, their regulations.
You can end up with a letter, a take downletter, millions in fines, even jail time.
I wanna focus for a moment 'causethere's some new things that have
(03:55):
happened in January and there arejust like some, they've got a heart
on right now for certain components.
So I'd love to just walk through whatare some of the things people don't know
that could cost them millions a second?
They get caught doing it.
Yeah.
I think the easiest one out there,subscription billing compliance.
I mean it, it's continuity.
Continuity.
Our continuity products.
Yeah.
Okay.
I think it's not difficult to do.
(04:15):
What are people doing wrong?
They're either not disclosingthat people are enrolling into a
subscription, or it's a membershipprogram that is not fully disclosed.
Basically, you get to the checkout pageand you're enrolling in a subscription.
Nobody really knows that they'reenrolling in a subscription.
I think a lot of people don't understandthe rules around subscriptions and
forced continuity and the pre-checkedbox versus the not pre-checked
(04:36):
box versus the pre-checked box.
That can't be unchecked.
And if you've been listening to me longenough, I've talked about this quite a bit
and we'll probably talk about it quite abit in the coming months on this podcast,
but I wanna know, I wanna be compliant.
I don't wanna get in trouble.
I wanna make a lot of money andI wanna have a subscription.
What is your advice to me on how I makesure that my subscription part of my
(04:56):
product is on the up and I'm not gonnaget in a whole lot of trouble for it.
So the example besides callingyou and having you review
it for a gazillion dollars?
No.
The example I use is goask your grandmother.
Go ask your parents.
Give them your enrollment path.
Okay.
Okay.
I was like, go ask grandmawhat the FTC thinks.
Gonna be fine with that.
No.
Give your enrollment path tosomebody who's older than you.
(05:16):
Preferably over 65, right?
Not super tech savvy.
Have them walk through it, havethem make a test purchase, or they
don't need to click the button.
Oh, that's smart.
But basically get to the end andthen start asking 'em questions.
Be like, Hey grandma, what'd you buy?
That's smart.
How often are you being billed?
And if the answer is I think I only boughtone bottle you're gonna have a problem.
'cause that's the lens that regulators,and to be honest, consumer protection
(05:38):
attorneys are gonna be using.
You're gonna get, grandma from Nebraskaenrolled in dietary supplement and she
thinks that she's buying one time andthen suddenly she's in a subscription.
So at the end of the day, youwant your subscription billing
disclosure or just your continuitymodel to be clear, unavoidable.
Like all the, you're gonna pay me$49 a month, I'm gonna send you X
product every month on the third ofthe month, and this is how you cancel.
(06:00):
Yep.
And if we're hiding the ball,then that's gonna be a problem.
If there's any question, especially nowwith the new regulations in place, okay.
If there's any question, by the timeyou get by, you hit that either buy
now button or whatever you're usingat the end on the checkout page, if
there's any question whatsoever, whatyou're buying, how often you're gonna
be billed, there's gonna be an issue.
And it's not reallydefensible anymore, really.
That's great to know.
(06:21):
Terrifying, by the way.
I'd like to go into deceptive advertisingto me means misleading claims.
It means exaggeration of claims andit means improper evidence of claims.
So I'd love to dive into that becauseI think that for the most part,
people who are selling understandwhat they absolutely cannot say.
What they don't understand ishow to say what they can say.
(06:44):
And so just because it's truedoesn't mean that I can say it.
I'd love to.
Yeah.
Go please.
No, like just getting thebrass tacks of it all.
You summed it up.
An advertisement needs to be truthful, notmisleading, and properly substantiated.
And so you can have a statementthat is perfectly truthful.
I've got 5,005 star reviews.
Look at how great I am.
Okay.
But just because that is true, if youhave 10,001 star reviews quoting that,
(07:06):
Hey, I've got 5,001 star reviews.
It's true.
No, but okay, becausethe So I didn't know.
I didn't know this.
It's all gonna be coming.
Can I try and play with words?
Sure.
Okay.
So just ask one of the 5,000 peoplethat left me a five star review
doesn't matter because the impression.
The net impression of thatstatement is gonna be a majority of
consumers really like my product.
And so you're hiding the fact thatthere's all these, an overwhelming number
(07:29):
of one star reviews out there twice?
Yeah.
Wow.
Okay.
So I would've guessed thatI could have said that.
That's really interesting.
I wanna move on to lack ofevidence of what's true.
And I wanna just go through.
What the rules are of whatyou need to keep for evidence.
And then I wanna play around a little biton how we've made those things happen in
the past and share some of those things.
(07:50):
So yeah, I have a ton of clients whocall all the time, and my customer
service clicks a button and ittells me that nine 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.
Yes, but no.
What you need to, how doI 100% get a yes from you?
Let's go there.
Pay me.
I've given you a lot of money.
(08:11):
I'm pretty sure that'show you get your car.
No, which by the way has never takenme for a ride in, one of these days.
One of these days.
So there is usually always a way tosay something that you wanna say very.
Rarely will we say Absolutely not.
You cannot say that.
Okay.
There's usually a compliant way to say it.
Okay.
The devil's just in the details.
So if you wanna talk about how yourproduct works or how efficacious it is.
(08:34):
So let's go over efficacy for a minute.
'cause I had this conversationthe other day for 40 minutes.
You looked at me andsaid, what's efficacy?
So what is efficacy?
What's maximum efficacy?
What does efficacy mean?
So if you say your product does X, Y,and z. You were saying that your product
is gonna do it, so if you say at whatyou've prescribed your product as.
Yeah.
So if it says take twotablets twice a day.
(08:56):
And it will support healthy liverfunction or something like that.
Sure.
But all of the claims say that youhad to take nine times what you put
in your product because you're acheapskate or because they had to take
four of the capsules and you didn'twant it to be confusing copywriters.
So yeah.
So whenever your dietary supplementsis a great example, so whether
(09:17):
it's white label or you formulatedthis, most often people go out and
they just Google and they're like,ashwagandha, what does Ashwagandha do?
It's oh, I see it has somestress relieving properties.
Great.
And they look at a bunch of studies.
Typically, they're from overseas, right?
And they'll say 86% of peoplesuffer less stress, depression, and
anxiety when taking ashwagandha.
(09:39):
Not even that.
I'd go a step further.
It's an animal study where they're givingthem six grams of ashwagandha in one day.
One, and they're chilling likethey're stoned and it's a mouse.
Exactly.
Exactly.
Or even in the human studies, they'regiving 'em six grams or whatever a day,
but your product has 500 milligrams.
But no.
Anyway, there's just a massive disconnectbetween what science says will support
(10:00):
your claim, what you were advertisingyour product will actually do.
It depends on what vertical you're in,what product you're trying to sell.
If you're selling a healthproduct, you need competent and
reliable scientific evidence.
If you're getting into green claimsor recyclability composting, you
need to be able to prove that yourproduct actually does it right?
And there's usually a statute out there.
So let's talk about how to prove it.
(10:20):
Let's do it.
Okay.
I'm gonna go through acouple different products.
That way we can give some good examples,and I'm actually going to utilize
some things that you and I have donein the past few years to help our
mutual clients achieve these things.
The first thing I wanna talk about,and I'm just gonna go over here
to bring it back so you can havethese double blind studies done.
We've talked about this is very expensive.
That will allow you to makea lot of claims, right?
(10:43):
But one of the easiest, cheapest ways thatwe found that's super effective is to do
a true survey on our own customer base.
And so you and I have done this onan ED product, which is a class two
medical device, water pump member.
Okay.
And so I want you to walk me through,I wanna be able to say, so as a class
(11:07):
two medical device, there's lotsof things I can say and can't say.
So I can say, where are some things I got?
So I can say it supports a male.
Erectile function.
Okay.
Can I say that?
So I always do it on camera.
I will say a erectile Absolutely.
Okay.
'cause that class two medical devices.
We'll restore.
We'll restore sexual health.
(11:27):
Probably Okay.
Will increase your size by two inches.
Absolutely not.
And the reason, the FDA hassaid that these products are
approved for certain purposes.
Mail enhancement is not one of 'em.
Okay.
So setting aside the regulatory issues,and this is where it gets into, because
here's how we do it, here's why youget paid, the money you get paid.
How do we do that?
No, but so everything, even beforewe go here for a second, okay.
(11:49):
Everything is gonna be on a risk scale.
Yep.
Some businesses are verycomfortable with the risk.
Some businesses are not.
Some businesses like to makemillions of dollars and some billions
like to make tens of thousands.
Yeah.
you want to be on this risk tolerancescale, typically probably around a seven
or eight where you get to keep most money.
So let's talk about the risk tolerancescale, because most people, in my
mind, most people would think 10is a, oh God, I'm going to jail.
(12:12):
And one is perfectlyfine, but it's actually.
the opposite.
So 10 is I'm brick and mortar.
I'm making my own knit productsand I'm selling them for cash only.
'cause no online seller is a 10,our one is, yo, you gotta stay
in Spain for a couple more days.
'cause you might get arrested onyour way back into the country.
Yep.
We've had that happen.
(12:32):
So most businesses wannabe around a seven or eight.
It means that they're competitive, they'retaking on a certain amount of risk,
but they're not gonna get huge fines.
They're not gonna get take down notices.
They're not gonna, yeah.
They're nipping in the bud.
Some of the, like the classaction liability risks.
They're still being aggressive enoughto be competitive in the market.
But.
The FTC could still always find anissue because the FTC could always
find an issue with something.
But you wanna make sure that youfall somewhere on that risk out.
(12:53):
And taking it back to what we werejust talking about with the ED
pumps, the FDA very clearly saysthat this class two medical device
is approved for this purpose.
You can advertise it for X, Y, and z.Mail enhancement is not one of those.
Okay.
And so business has tomake that judgment call.
I thought you're gonna say thebusiness has to make that up.
I was gonna say, Brian, no.
The business has to make thatjudgment call if they feel comfortable
(13:14):
with a little bit more risk.
But you can do it.
How do you do it?
'cause there's a way to do it.
The more compliant ish way to do itwould be to run a consumer survey.
So I can create.
40 questions.
I saw one inch or more of growth.
I saw two inches or more growth.
I was able to functionsexually 90% of the time.
I was able to functionsexually 80% of the time.
(13:35):
I can send my previous 10,000 customers.
The survey, right?
You send it to everyone.
And then I get statisticalsignificant back.
I disclose how many people it wentto, what percentage responded.
and then let's say 94%say they grew two inches.
Now I can say 94% of my customersgrew two inches technically.
Yeah.
So assuming that we put the surveytogether and we're not just randomly
(13:58):
picking, as opposed to we knowthese 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 or Consumer survey or lubricant.
Sure.
You can get that kind of critical mass.
I promise I'm not gonnamake all of these this.
Uncomfortable just trying toloosen you up a little bit.
So once you get all these survey responsesback, you know you're gonna look at 'em,
(14:22):
you're gonna pull out the data that youlike, and you frame it in a truthful way.
It's a survey of 10,000 customerswith, X number responding, observed,
whatever you're trying to say.
as long as it's true.
That is one way to make the claim thatyou want to be making without spending.
$2 million on study that some scientistis gonna do on your behalf of the product.
Correct?
No, I will caveat that.
(14:42):
Okay.
Of course you will because you knowwe're talking about health 'cause you
don't like phone calls or nasty comments.
Because it's all gonna come down to theproduct you're selling and whether or not,
like if you're selling a health product,can we disclaim it in a different way?
If you have an attorney, you shouldcall your attorney and ask your
attorney, can I do it this way?
This is what I wanna doand help them guide you.
If you don't have anattorney, contact Ryan Poti.
You can go to Gordon Reese's websiteand look him up, and he probably
(15:05):
won't answer your phone callbecause your name is in Emma, but.
But contact Ryan Poti we can drophis email in the show notes and just
contact an attorney to walk you through.
But this is a basic idea of howyou can get these things done
and you're gonna pay an attorneyto help you do a proper survey.
Way less than you are going topay for an actual site to be done.
(15:27):
Correct.
Can we move on to the next product?
Do you feel comfortable with that?
We're good.
See, he's an attorney, so he isgoing to cover his ass all the time.
It's crazy to me.
Okay.
I wanna.
Just move on to one more product typebecause we've talked a lot about CLP ones.
I don't wanna necessarily talk aboutthose because they're already approved
by the FDA and there's like loss,so much weight loss, they get to do
so much more than everybody else.
(15:48):
But let's talk aboutweight loss supplements.
So how about GLP one activators?
Perfect.
Great example.
All over social media.
Yep.
Take this GLP one with beta, it's adietary supplement with random collection
of dietary ingredients in there.
Take this, it's gonnaactivate the GLP one protein.
Okay.
That will help you lose weight, dietarysupplements regulated by the FDA.
If you're out there saying that thisproduct is gonna help you lose weight,
(16:09):
you actually have to back it up.
And like we were talkingabout the ashwagandha.
Yeah.
It's same thing.
Same principle.
If you're gonna say your productdoes this, you're gonna need at the
very bare minimum ingredient studies,technically human ingredient studies.
And then the best evidence wouldbe actually random clinical
trial on your own product.
But if you're gonna be able to goout there and say, this product
helps you lose X amount of weight,you need to have something on
(16:30):
file that's gonna back that up.
Not just simply, I know thisthing is gonna work, which
we've seen before, couple times.
Love it.
I wanna move on though, because.
We have a lot to cover.
So the next thing that I wouldreally like to cover is false urgency
Marketing 101 is create urgency.
We don't survive if wedon't create urgency.
So people put countdown timers.
(16:51):
People say Big pharma is shutting me down.
People say 200 bottles left.
No, the FTC hates it.
Absolutely conservative, right?
But what do we get for?
What is that in your number scale?
I'm gonna move into pricing next, butlet'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?
So here's the thing,when we're looking at.
Word salad.
(17:11):
He's never gonna commit.
No, but here's the thing.
So in isolation not a big deal.
Okay.
Ryan's saying not a big deal.
Okay.
You put that on top of falseand deceptive efficacy claims.
Hidden continuity and all that.
It's just you put it all in a salad bowland it's like this's, it's burg of, yeah.
How many things are you doing that arenot compliant that you don't even realize?
'cause most marketers, most onlinesellers because the FTC complaint will
(17:35):
read, online marketer, deceptivelyor deceived consumers into buying
this limited supply of, oh, thisa product that doesn't even work.
Oh we've read them, deceived theelderly Oh and defrauded them out of
$2.1 million because you put a count ontown and that, that timer, that's real.
That's a real thing.
That's a real thing.
Yes.
When you're getting the FTC isgonna calls all this a dark rat.
(17:58):
It's if you are using these marketingtactics to create this false sense
of urgency because you really wantthese people to buy these products.
It's material to their decision making.
It pretty much usurps their ability tomake a rational purchasing decision.
Because if they knew they can getthis sale later, or it's not really
gonna run out, then they mightnot actually buy it right now.
They might actually do a little bit moreresearch, but we've all been there and
we've seen, oh my gosh, thick airplanes.
(18:19):
I think, it's gotten a little bit betterin the past couple years, but when you go
to, Google flights and all of a sudden youjust see the prices creeping up, you start
buying your flight a little bit earlier.
Do you think that it's gottenbetter corporate travel?
I was just gonna say your company'sclearly paying your flights, but.
You're sitting there oh my God,I can't go to this conference.
I can't go to this meeting.
Or if I don't do this now, or youroperations and you plan four months
(18:40):
ahead, or my kids' vacation is gonna be injeopardy if I don't buy these tickets now.
So you buy it now.
If you had a little bit more time tosearch, you probably would've found
that, Southwest is flying there for99 bucks or something like that.
But you paid way more over here, right?
Because you're worried aboutthat opportunity disappearing.
So FEC hates it.
consumer protection attorneys love it.
Great.
We can't do it, can't do it, can't do it.
How do we do it?
How do we create urgency?
(19:00):
And I'd love to give you, I'dlove to play a game again.
I'd love to give you some of my ideas.
Fast acting premiumsthat actually go away.
Absolutely.
So I'm going to give you Product Aand your first month in my membership
free, which will actually help yourconversions on your continuity product,
making sure that you disclose that you'regonna charge them and all that others.
Put that little caveat in there.
(19:21):
You come from me, but I'm gonna giveyou my first me membership free.
It's if you buy in the next 15 minutes.
Count time timer's there.
Yeah.
and it actually goes away.
Even if I retarget them with thesame thing over and over again.
It goes away in thatmoment for that truly.
I bet if you tested that, I've testedit where it worked and where it didn't
work, but I, most of the time it works.
They buy it on the retargeting and thenyou're not gonna pay the affiliate.
(19:44):
Sorry, Phil.
Okay.
So I'm gonna have somany comments over that.
So another way to create asense of urgency, they're
gonna scroll off the page.
And you see this all the time.
I'm sitting at a, on A productthat's for, we'll say, weight loss.
And I go to scroll off andyou see the popup come up.
Big pharma is shutting me down.
I don't know if I'mgonna be here tomorrow.
(20:05):
What's another way I can do that?
Don't lie to consumersand create an incentive.
Just I a hundred percent.
But how can I give you some ideason how, and you can tell me.
I don't even know ifit's gonna be illegal.
We'll see.
Let's see how much I actually know.
Okay, I'm going to scroll offthe page and I scroll to the top.
And instead of saying big pharma, itsays, wait, are you sure you wanna
(20:28):
go click here for an extra 15% off?
That would be fine, but youalways gotta a no, that's fine
in isolation, totally fine.
Okay.
If you want to incentivizeconsumers to buying now.
That's fine.
Scaring people into buyingnow is a different thing.
I agree.
The big pharma, no, you just wanna go.
We already said that's bad, but hey,if you wanna buy this now, you'll
get an extra 15% off your order.
(20:50):
The counter argument to that is it'sstill deceptive because you're trying to
lean on consumers, emotional fear, thatthey 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 encourageconsumers to make a purchase.
So I'll give you another one.
Okay, so I go to scroll offthe page and a lot of times
you'll see and don't come at me.
(21:10):
I've never ever done this, but you go toscroll off the page and it says, wait, big
pharma is trying to shut this page down.
I don't know if thiswill be here tomorrow.
Absolutely.
Can't do that, right?
Can't do it.
That's bad.
Gone.
Sure.
Here's a way that I thinkpossibly you could do it.
Perhaps maybe they go to scroll offthe page and it says, wait, this
product is really amazing at X. Ifyou try it today, we'd like to offer
(21:31):
you an additional 15% off fine.
No problems there.
Because you're not trying to convey like,Hey, if you don't do this now right.
You're not gonna be able toget it again in the future.
It's just, here's one moreincentive of why you should make
a purchase, why you should buy it.
Yep.
Instead of, scaring people intooh my gosh, is gonna go away.
I'm not gonna be able to get it again.
This is in such low quantity thatI'm not gonna be able to get it
in the future I have to buy today.
It's just if you wanna makea purchase today, we'll give
(21:52):
you an additional incentive.
You want people to feel not scaredabout their purchase or not worried
that if I don't want, As a marketer,you want them to feel scared.
Yeah.
PC doesn't want people to feel skeleton.
So you have to find the balancein making them feel like it's
going to solve a problem thatthey have not been able to solve.
That they feel like their life is notgoing to be what it could be without it.
(22:12):
And that they are incentivizedto buy today without making them
feel like the product is goingto go away if it's really not.
Correct.
Okay.
All right.
So that was fun.
I wanna talk about pricing 'causeI 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 aboutpricing and I'm gonna, actually, after our
(22:33):
conversation yesterday, we went to dinnerwith some friends of ours and before
dinner we were talking and you told methat you can't use strikeouts on pricing.
So we're gonna gothrough that in a second.
But then I thought of some other things.
So I'm gonna segue us into that.
I do split testing on pricing, so Ifeel 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 mytraffic go to a $47 price point, and on
(22:57):
50% of my traffic go to a $69 price point.
Is there any issue in pricingwith that split testing pricing?
No.
Split testing.
Pricing is fine.
Okay.
It's the strike through pricing component.
Okay.
Perfect.
Yeah.
So this is how, by the way, Idon't pay him the $715 an hour
to ask him a simple question.
I'm just kidding.
So now let's talk about strikethrough, because I have not seen a
(23:19):
checkout page in a really long time.
For supplements, for gadgets, fortools even where it didn't have the
price a strike through the priceand a cheaper price even on tv.
I can't think of a checkoutpage that You're not gonna
pay, you're not gonna pay.
This is what you're gonna pay.
So walk us through why thisis wrong and how we, and then
(23:40):
you let me know how we do it.
So when you're advertising a sale ora strike through you need to advertise
the prevailing market price and inleast California the prevailing market
price for the last three months.
And so you actually need to the pricethat you're striking through the
full retail price, you actually needto sell the product at that price.
Not only do you need to sellit, regulators are gonna say.
You need to sell it and we needto see a substantial number
(24:02):
of unit sales at that price.
And we've seen a ton of class actions.
I've got a couple of them rightnow on strike through pricing.
And it is, you have falsely representedthat this retail price was the purchase
price and that these consumers aregetting this deal that never existed.
And what you're actually sellingis the, this product at full price,
but misrepresenting it as a sale.
And the way to do this isone you were talking about.
(24:26):
Split testing on pricing.
Yep, totally fine to do that.
You can also have different channelswhere you're selling products,
and so you might have your Amazonaccount or your Amazon storefront.
That is where things arelisted at full price.
You might run a promotion onYour main website or sales
page or something like that.
Okay?
But what you need to be ableto show is that you're actually
(24:46):
selling the product at the saleprice or at the full retail price.
And so often people don't do that.
they come up with some number thatthey think sounds great, they slash
it through and then say, 9 todaythat you can't do, how do I do that?
How do I make that same outcome happen?
Yeah.
So you need to be advertisingit and selling it somewhere
for the full retail price.
Okay?
Now.
I know where you're going.
(25:07):
Light bulbs are all over the place.
So your next question is what if Ionly drive my traffic to, I don't
drive any sort of traffic to myAmazon sales storefront or Shopify
or, so I have a storefront, Shopify orAmazon where I just put something up.
I have no traffic to.
That price is $149.
That's the strike through price that Iuse on where I actually send my traffic.
(25:30):
So that's where you are.
Why or why not?
That's where you're gonna get intoan argument over whether or not that
is actually the prevailing marketprice 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 andforth with opposing counsel or regulators
of saying yeah, I get that you're,advertising at a Walmart or Etsy or
any of these storefronts, but you have.
10 sales.
(25:50):
Like how?
How can you use that?
As this is the prevailing market price.
This is what most consumers havepaid over the last three months,
that you get into a difficult spotand you start having to do some word
gymnastics to try to argue around that.
But so long, defendable.
Depends on how many sales you have.
A lot of people will go and buya ton of stuff off of Amazon.
I mean I do it all the time.
I don't search around'cause it's just easier.
(26:12):
And so some Amazon storefrontswill have a ton of sales just
because they make it so easy.
So it's a lot more easyto substantiate that.
Yeah.
your product is 99, 95 a month or 99.
95, whatever the price is.
And so can I tell you why I like Amazon?
Why?
Couple of reasons.
Number one, I don't worryabout some BS and I'll even go
look at terms and conditions.
I don't have to worry about some BS chargecoming in that wasn't disclosed to me.
(26:34):
'cause a lot of people do that.
I buy one time and that's it.
Number two, I don't have topay shipping and handling.
I don't know why, but I would ratherpay Amazon $10 more for a product than
pay you $4 for shipping and handling.
I have no idea why, and I have noidea where the package is either Yeah.
At least with Amazon, I knowit's gonna be there in two days.
Not only do I know it's gonnabe there in two days but I know
it's actually gonna show up.
Yep.
And if it doesn't, I'mnot gonna call anybody.
(26:56):
I'm going to send a quick chat and I'mgonna get my money back immediately.
So there's just so manyaspects to this, but, okay.
So the answer on Amazon is youcan't or Amazon, or, and I don't
wanna just say Amazon because.
I would probably not do Amazon.
I would probably do Shopify.
Okay.
The takeaway from all of this is ifyou're really running a fake sale, it's,
we're not gonna call it a fake sale.
We're no.
(27:17):
You should know better than this.
We're not running a fake sale.
We hope to sell on Amazon, but our.
Traffic dollars are going intoa funnel with an upsell flow.
Whereas Amazon, I don't havea funnel with an upsell flow.
As my attorney, I would advise you toadvise the FTC that on Amazon, I can't
gather their data, so their lifetimevalue isn't worth as much to me.
(27:40):
But it's also on that becauseI can't retarget them.
That's true, but it's also on the.
The prevailing price of that product.
I don't care about the lifetime valueof the customer, it's the product.
Fair enough.
So I tried, if it is fine to dothis, but you need to be able to show
that you're actually making sales.
Okay.
And so there's, there are whatpercentage of sales that's gonna
(28:01):
depend on, okay, how much trouble doI get in for strike through pricing?
So consumer class, action liabilityyou typically broad in California.
You're looking at statutory penalties byway, you just don't sell in California.
It's the 13th largesteconomy in the world.
People need to sell there.
I would say a good 30% of your sales,just picking a number outta a hat,
a good 30% of your sales needs to becoming from, the full blown retail price.
(28:23):
The problem is that actually prevailing?
'cause if you're only getting30%, I think it's more defensible.
If it really is like single digitpercentage, you're gonna have you're
gonna be facing an uphill battle.
Because it's gonna look likean ephemeral or a false sale.
Okay.
This has been great.
I wanna just close with one more question.
Health, beauty and finance,they're under the most scrutiny.
(28:43):
Easy.
Why?
Because it's what everybody wants.
Everyone wants to be healthier.
Everybody wants to be morebeautiful, and then everybody wants
to be financially independent.
And so it's just that people arebuying more in those categories.
Exactly.
it's what everybody'sconstantly looking for.
Got it.
Everybody wants to work fourhours a week and be a millionaire.
Nobody wants wrinkles.
You know how you get money, youwork really hard for it, or daddy.
Alright, so Ryan, this has been awesome.
(29:06):
This is our first of hopefullymany marketing on trial.
It's been fun.
I'm gonna just run through someaction steps for our listeners.
And so step one, audit yourcurrent marketing for risky claims.
That's gonna be like really important.
Actually read through.
You wouldn't believe the amountof business owners haven't
actually read through whattheir copywriters have posted.
(29:28):
Step two, ensure all your testimonialsand endorsements are FTC compliant.
So meaning, you know you're followingtheir guidelines and you have evidence
of what you're saying is true.
Step three, avoid misleading pricing.
Scarcity tactics or deceptivefee trials or anything like that.
(29:49):
We didn't really go into that, butI wanna throw that one in there.
Step four, get legalapproval for your marketing.
If you're selling online, whetherit's health, fitness, or finance,
or anything, if you're following allthese guidelines, it isn't gonna take
that long for your attorneys to runthrough everything and give you a,
Hey, here's where your risks are.
(30:10):
So take the time to do that.
Step five, keep updated.
Stay in, in touch with what theFTC's guidelines are today and
what they're going after today.
Whether it's that you listen to thispodcast or other podcasts, you just
simply read on the interwebs, and makesure you are educated in what you're
selling and what your requirements arefor the products that you're selling.
(30:32):
So we hope you enjoy this episode.
the FTC doesn't care if you don't know.
Ryan said, if you're driving 95 milesan hour down the street and there are
10 other cars driving 95 miles an hour,the only person getting fined is you.
'cause you're the onethat got full pulled over.
So protect yourself.
Now.
Get the free FTC compliance checklistthat Ryan and I co-wrote at www do special
(30:54):
ops podcast.com in our visionary vault.
Subscribe for expert insightsto marketing compliance.
And business protection right here,and we will see you next time.
See you guys.
Did you know that the FTC hasfined businesses over 5 billion?
(00:04):
That's billion with a B in recentyears for deceptive advertising.
Could you be next?
Very often marketers havemisconceptions about compliance and
their duty to uphold the regulationsthat the FDC has put forth.
So what do you see the most?
What is the most commonmisconception in our industry?
(00:25):
Everybody else is doing it.
Everybody else is out theredoing it, so why can't I?
The problem is think about when you'respeeding on the highway, you're going
nine, five and you get pulled over.
It doesn't matter if 10 carsaround me are doing nine, five.
I can't tell.
The cop
Welcome to the Special Opspodcast where we give actionable
insights to entrepreneurs today.
We're gonna be shaking thingsup and doing something new.
Ryan Pott from Gordon Reese and Ihave decided to create a spinoff.
(00:47):
Welcome to Marketing On Trial.
Here we're gonna break downcompliance, particularly for
direct response marketers, onlinesellers, and e-commerce brands.
Oftentimes, legal compliance can beoverwhelming, but Ryan and I have helped
hundreds of entrepreneurs navigate thewaters of compliance with over three
decades of experience between us.
(01:09):
We are here to share what we know.
And how to execute it.
So let's dive in.
Today we're gonna betalking about the FTC.
Did you know the FTC has finedbusinesses over 5 billion?
That's billion with a B inrecent years for deceptive.
Advertising, could you be next?
Today we're sitting down to discusswhat marketers aren't being told
(01:31):
about consumer protection laws andhow to make sure you are not next.
Don't forget to like and subscribebecause when you do, you get notifications
every time we put out a new episode.
Also, if you're interested, weco. Authored checklist called
the FTC Compliance Checklist.
You can head over towww.specialopspodcast.com and
sign up for a visionary vault.
(01:51):
There you'll get loads of tools,including that FTC compliance
checklist, which is gonna help youaudit your marketing for legal risks.
So why your marketing might.
Be illegal.
I'd love Ryan for us to talkabout first misconceptions.
Very often marketers havemisconceptions about compliance and
(02:11):
their duty to uphold the regulationsthat the FTC has put forth.
So what do you see the most, what is themost common misconception in our industry?
Everybody else is doing it.
Huh?
Everybody else is doing it.
So I, without even a pause, you say this.
No, it comes up.
I hear you've heard that quite a bit.
Quite a bit.
No it's every client call, they'relike this company's doing it.
(02:31):
This company's doing it.
So they're doing a hundredmillion dollars, 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.
No, and it's a crap shoot.
'cause enforcement actions arejust like a roll of the dice Why?
Some people get picked.
Yep.
Some we will never know for mostof them, but yeah, it really is.
Everybody else is out theredoing it, so why can't I?
The problem is you know, think aboutwhen you're speeding on the highway,
(02:52):
you're going 95 and you get pulled over.
It doesn't matter if 10cars around me are doing 95.
I can't tell the cop,you can't pull me over.
No.
I drove up here from Houston, likephone number people left and right.
It didn't matter how fast we were going.
Yeah.
So I mean that, that's the biggest one.
And I think the other misconceptionis if I plug it into ChatGPT or Google
or something like that, I'm just gonnaget some answer that I can basically
(03:12):
hobble along with and that'll be fine.
Problem is, it's a lot,usually a lot more complex.
Think of environmentalclaims and things like that.
But, and so people just don'treally know where to look or they
can rely on Google or chat GPT.
Yeah.
So pretty much everyaspect of our businesses.
Is regulated by some law tangentially, atleast whether or not it's the FTC has an
(03:33):
opinion on everything we do, pretty much.
It doesn't matter what verticalyou're in, the marketing channel
that you're using, there's somethingout there that's gonna govern what
you're saying and how you can say it.
So as consequence of notfollowing their guidelines.
Their rules, their regulations.
You can end up with a letter, a take downletter, millions in fines, even jail time.
I wanna focus for a moment 'causethere's some new things that have
(03:55):
happened in January and there arejust like some, they've got a heart
on right now for certain components.
So I'd love to just walk through whatare some of the things people don't know
that could cost them millions a second?
They get caught doing it.
Yeah.
I think the easiest one out there,subscription billing compliance.
I mean it, it's continuity.
Continuity.
Our continuity products.
Yeah.
Okay.
I think it's not difficult to do.
(04:15):
What are people doing wrong?
They're either not disclosingthat people are enrolling into a
subscription, or it's a membershipprogram that is not fully disclosed.
Basically, you get to the checkout pageand you're enrolling in a subscription.
Nobody really knows that they'reenrolling in a subscription.
I think a lot of people don't understandthe rules around subscriptions and
forced continuity and the pre-checkedbox versus the not pre-checked
(04:36):
box versus the pre-checked box.
That can't be unchecked.
And if you've been listening to me longenough, I've talked about this quite a bit
and we'll probably talk about it quite abit in the coming months on this podcast,
but I wanna know, I wanna be compliant.
I don't wanna get in trouble.
I wanna make a lot of money andI wanna have a subscription.
What is your advice to me on how I makesure that my subscription part of my
(04:56):
product is on the up and I'm not gonnaget in a whole lot of trouble for it.
So the example besides callingyou and having you review
it for a gazillion dollars?
No.
The example I use is goask your grandmother.
Go ask your parents.
Give them your enrollment path.
Okay.
Okay.
I was like, go ask grandmawhat the FTC thinks.
Gonna be fine with that.
No.
Give your enrollment path tosomebody who's older than you.
(05:16):
Preferably over 65, right?
Not super tech savvy.
Have them walk through it, havethem make a test purchase, or they
don't need to click the button.
Oh, that's smart.
But basically get to the end andthen start asking 'em questions.
Be like, Hey grandma, what'd you buy?
That's smart.
How often are you being billed?
And if the answer is I think I only boughtone bottle you're gonna have a problem.
'cause that's the lens that regulators,and to be honest, consumer protection
(05:38):
attorneys are gonna be using.
You're gonna get, grandma from Nebraskaenrolled in dietary supplement and she
thinks that she's buying one time andthen suddenly she's in a subscription.
So at the end of the day, youwant your subscription billing
disclosure or just your continuitymodel to be clear, unavoidable.
Like all the, you're gonna pay me$49 a month, I'm gonna send you X
product every month on the third ofthe month, and this is how you cancel.
(06:00):
Yep.
And if we're hiding the ball,then that's gonna be a problem.
If there's any question, especially nowwith the new regulations in place, okay.
If there's any question, by the timeyou get by, you hit that either buy
now button or whatever you're usingat the end on the checkout page, if
there's any question whatsoever, whatyou're buying, how often you're gonna
be billed, there's gonna be an issue.
And it's not reallydefensible anymore, really.
That's great to know.
(06:21):
Terrifying, by the way.
I'd like to go into deceptive advertisingto me means misleading claims.
It means exaggeration of claims andit means improper evidence of claims.
So I'd love to dive into that becauseI think that for the most part,
people who are selling understandwhat they absolutely cannot say.
What they don't understand ishow to say what they can say.
(06:44):
And so just because it's truedoesn't mean that I can say it.
I'd love to.
Yeah.
Go please.
No, like just getting thebrass tacks of it all.
You summed it up.
An advertisement needs to be truthful, notmisleading, and properly substantiated.
And so you can have a statementthat is perfectly truthful.
I've got 5,005 star reviews.
Look at how great I am.
Okay.
But just because that is true, if youhave 10,001 star reviews quoting that,
(07:06):
Hey, I've got 5,001 star reviews.
It's true.
No, but okay, becausethe So I didn't know.
I didn't know this.
It's all gonna be coming.
Can I try and play with words?
Sure.
Okay.
So just ask one of the 5,000 peoplethat left me a five star review
doesn't matter because the impression.
The net impression of thatstatement is gonna be a majority of
consumers really like my product.
And so you're hiding the fact thatthere's all these, an overwhelming number
(07:29):
of one star reviews out there twice?
Yeah.
Wow.
Okay.
So I would've guessed thatI could have said that.
That's really interesting.
I wanna move on to lack ofevidence of what's true.
And I wanna just go through.
What the rules are of whatyou need to keep for evidence.
And then I wanna play around a little biton how we've made those things happen in
the past and share some of those things.
(07:50):
So yeah, I have a ton of clients whocall all the time, and my customer
service clicks a button and ittells me that nine 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.
Yes, but no.
What you need to, how doI 100% get a yes from you?
Let's go there.
Pay me.
I've given you a lot of money.
(08:11):
I'm pretty sure that'show you get your car.
No, which by the way has never takenme for a ride in, one of these days.
One of these days.
So there is usually always a way tosay something that you wanna say very.
Rarely will we say Absolutely not.
You cannot say that.
Okay.
There's usually a compliant way to say it.
Okay.
The devil's just in the details.
So if you wanna talk about how yourproduct works or how efficacious it is.
(08:34):
So let's go over efficacy for a minute.
'cause I had this conversationthe other day for 40 minutes.
You looked at me andsaid, what's efficacy?
So what is efficacy?
What's maximum efficacy?
What does efficacy mean?
So if you say your product does X, Y,and z. You were saying that your product
is gonna do it, so if you say at whatyou've prescribed your product as.
Yeah.
So if it says take twotablets twice a day.
(08:56):
And it will support healthy liverfunction or something like that.
Sure.
But all of the claims say that youhad to take nine times what you put
in your product because you're acheapskate or because they had to take
four of the capsules and you didn'twant it to be confusing copywriters.
So yeah.
So whenever your dietary supplementsis a great example, so whether
(09:17):
it's white label or you formulatedthis, most often people go out and
they just Google and they're like,ashwagandha, what does Ashwagandha do?
It's oh, I see it has somestress relieving properties.
Great.
And they look at a bunch of studies.
Typically, they're from overseas, right?
And they'll say 86% of peoplesuffer less stress, depression, and
anxiety when taking ashwagandha.
(09:39):
Not even that.
I'd go a step further.
It's an animal study where they're givingthem six grams of ashwagandha in one day.
One, and they're chilling likethey're stoned and it's a mouse.
Exactly.
Exactly.
Or even in the human studies, they'regiving 'em six grams or whatever a day,
but your product has 500 milligrams.
But no.
Anyway, there's just a massive disconnectbetween what science says will support
(10:00):
your claim, what you were advertisingyour product will actually do.
It depends on what vertical you're in,what product you're trying to sell.
If you're selling a healthproduct, you need competent and
reliable scientific evidence.
If you're getting into green claimsor recyclability composting, you
need to be able to prove that yourproduct actually does it right?
And there's usually a statute out there.
So let's talk about how to prove it.
(10:20):
Let's do it.
Okay.
I'm gonna go through acouple different products.
That way we can give some good examples,and I'm actually going to utilize
some things that you and I have donein the past few years to help our
mutual clients achieve these things.
The first thing I wanna talk about,and I'm just gonna go over here
to bring it back so you can havethese double blind studies done.
We've talked about this is very expensive.
That will allow you to makea lot of claims, right?
(10:43):
But one of the easiest, cheapest ways thatwe found that's super effective is to do
a true survey on our own customer base.
And so you and I have done this onan ED product, which is a class two
medical device, water pump member.
Okay.
And so I want you to walk me through,I wanna be able to say, so as a class
(11:07):
two medical device, there's lotsof things I can say and can't say.
So I can say, where are some things I got?
So I can say it supports a male.
Erectile function.
Okay.
Can I say that?
So I always do it on camera.
I will say a erectile Absolutely.
Okay.
'cause that class two medical devices.
We'll restore.
We'll restore sexual health.
(11:27):
Probably Okay.
Will increase your size by two inches.
Absolutely not.
And the reason, the FDA hassaid that these products are
approved for certain purposes.
Mail enhancement is not one of 'em.
Okay.
So setting aside the regulatory issues,and this is where it gets into, because
here's how we do it, here's why youget paid, the money you get paid.
How do we do that?
No, but so everything, even beforewe go here for a second, okay.
(11:49):
Everything is gonna be on a risk scale.
Yep.
Some businesses are verycomfortable with the risk.
Some businesses are not.
Some businesses like to makemillions of dollars and some billions
like to make tens of thousands.
Yeah.
you want to be on this risk tolerancescale, typically probably around a seven
or eight where you get to keep most money.
So let's talk about the risk tolerancescale, because most people, in my
mind, most people would think 10is a, oh God, I'm going to jail.
(12:12):
And one is perfectlyfine, but it's actually.
the opposite.
So 10 is I'm brick and mortar.
I'm making my own knit productsand I'm selling them for cash only.
'cause no online seller is a 10,our one is, yo, you gotta stay
in Spain for a couple more days.
'cause you might get arrested onyour way back into the country.
Yep.
We've had that happen.
(12:32):
So most businesses wannabe around a seven or eight.
It means that they're competitive, they'retaking on a certain amount of risk,
but they're not gonna get huge fines.
They're not gonna get take down notices.
They're not gonna, yeah.
They're nipping in the bud.
Some of the, like the classaction liability risks.
They're still being aggressive enoughto be competitive in the market.
But.
The FTC could still always find anissue because the FTC could always
find an issue with something.
But you wanna make sure that youfall somewhere on that risk out.
(12:53):
And taking it back to what we werejust talking about with the ED
pumps, the FDA very clearly saysthat this class two medical device
is approved for this purpose.
You can advertise it for X, Y, and z.Mail enhancement is not one of those.
Okay.
And so business has tomake that judgment call.
I thought you're gonna say thebusiness has to make that up.
I was gonna say, Brian, no.
The business has to make thatjudgment call if they feel comfortable
(13:14):
with a little bit more risk.
But you can do it.
How do you do it?
'cause there's a way to do it.
The more compliant ish way to do itwould be to run a consumer survey.
So I can create.
40 questions.
I saw one inch or more of growth.
I saw two inches or more growth.
I was able to functionsexually 90% of the time.
I was able to functionsexually 80% of the time.
(13:35):
I can send my previous 10,000 customers.
The survey, right?
You send it to everyone.
And then I get statisticalsignificant back.
I disclose how many people it wentto, what percentage responded.
and then let's say 94%say they grew two inches.
Now I can say 94% of my customersgrew two inches technically.
Yeah.
So assuming that we put the surveytogether and we're not just randomly
(13:58):
picking, as opposed to we knowthese 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 or Consumer survey or lubricant.
Sure.
You can get that kind of critical mass.
I promise I'm not gonnamake all of these this.
Uncomfortable just trying toloosen you up a little bit.
So once you get all these survey responsesback, you know you're gonna look at 'em,
(14:22):
you're gonna pull out the data that youlike, and you frame it in a truthful way.
It's a survey of 10,000 customerswith, X number responding, observed,
whatever you're trying to say.
as long as it's true.
That is one way to make the claim thatyou want to be making without spending.
$2 million on study that some scientistis gonna do on your behalf of the product.
Correct?
No, I will caveat that.
(14:42):
Okay.
Of course you will because you knowwe're talking about health 'cause you
don't like phone calls or nasty comments.
Because it's all gonna come down to theproduct you're selling and whether or not,
like if you're selling a health product,can we disclaim it in a different way?
If you have an attorney, you shouldcall your attorney and ask your
attorney, can I do it this way?
This is what I wanna doand help them guide you.
If you don't have anattorney, contact Ryan Poti.
You can go to Gordon Reese's websiteand look him up, and he probably
(15:05):
won't answer your phone callbecause your name is in Emma, but.
But contact Ryan Poti we can drophis email in the show notes and just
contact an attorney to walk you through.
But this is a basic idea of howyou can get these things done
and you're gonna pay an attorneyto help you do a proper survey.
Way less than you are going topay for an actual site to be done.
(15:27):
Correct.
Can we move on to the next product?
Do you feel comfortable with that?
We're good.
See, he's an attorney, so he isgoing to cover his ass all the time.
It's crazy to me.
Okay.
I wanna.
Just move on to one more product typebecause we've talked a lot about CLP ones.
I don't wanna necessarily talk aboutthose because they're already approved
by the FDA and there's like loss,so much weight loss, they get to do
so much more than everybody else.
(15:48):
But let's talk aboutweight loss supplements.
So how about GLP one activators?
Perfect.
Great example.
All over social media.
Yep.
Take this GLP one with beta, it's adietary supplement with random collection
of dietary ingredients in there.
Take this, it's gonnaactivate the GLP one protein.
Okay.
That will help you lose weight, dietarysupplements regulated by the FDA.
If you're out there saying that thisproduct is gonna help you lose weight,
(16:09):
you actually have to back it up.
And like we were talkingabout the ashwagandha.
Yeah.
It's same thing.
Same principle.
If you're gonna say your productdoes this, you're gonna need at the
very bare minimum ingredient studies,technically human ingredient studies.
And then the best evidence wouldbe actually random clinical
trial on your own product.
But if you're gonna be able to goout there and say, this product
helps you lose X amount of weight,you need to have something on
(16:30):
file that's gonna back that up.
Not just simply, I know thisthing is gonna work, which
we've seen before, couple times.
Love it.
I wanna move on though, because.
We have a lot to cover.
So the next thing that I wouldreally like to cover is false urgency
Marketing 101 is create urgency.
We don't survive if wedon't create urgency.
So people put countdown timers.
(16:51):
People say Big pharma is shutting me down.
People say 200 bottles left.
No, the FTC hates it.
Absolutely conservative, right?
But what do we get for?
What is that in your number scale?
I'm gonna move into pricing next, butlet'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?
So here's the thing,when we're looking at.
Word salad.
(17:11):
He's never gonna commit.
No, but here's the thing.
So in isolation not a big deal.
Okay.
Ryan's saying not a big deal.
Okay.
You put that on top of falseand deceptive efficacy claims.
Hidden continuity and all that.
It's just you put it all in a salad bowland it's like this's, it's burg of, yeah.
How many things are you doing that arenot compliant that you don't even realize?
'cause most marketers, most onlinesellers because the FTC complaint will
(17:35):
read, online marketer, deceptivelyor deceived consumers into buying
this limited supply of, oh, thisa product that doesn't even work.
Oh we've read them, deceived theelderly Oh and defrauded them out of
$2.1 million because you put a count ontown and that, that timer, that's real.
That's a real thing.
That's a real thing.
Yes.
When you're getting the FTC isgonna calls all this a dark rat.
(17:58):
It's if you are using these marketingtactics to create this false sense
of urgency because you really wantthese people to buy these products.
It's material to their decision making.
It pretty much usurps their ability tomake a rational purchasing decision.
Because if they knew they can getthis sale later, or it's not really
gonna run out, then they mightnot actually buy it right now.
They might actually do a little bit moreresearch, but we've all been there and
we've seen, oh my gosh, thick airplanes.
(18:19):
I think, it's gotten a little bit betterin the past couple years, but when you go
to, Google flights and all of a sudden youjust see the prices creeping up, you start
buying your flight a little bit earlier.
Do you think that it's gottenbetter corporate travel?
I was just gonna say your company'sclearly paying your flights, but.
You're sitting there oh my God,I can't go to this conference.
I can't go to this meeting.
Or if I don't do this now, or youroperations and you plan four months
(18:40):
ahead, or my kids' vacation is gonna be injeopardy if I don't buy these tickets now.
So you buy it now.
If you had a little bit more time tosearch, you probably would've found
that, Southwest is flying there for99 bucks or something like that.
But you paid way more over here, right?
Because you're worried aboutthat opportunity disappearing.
So FEC hates it.
consumer protection attorneys love it.
Great.
We can't do it, can't do it, can't do it.
How do we do it?
How do we create urgency?
(19:00):
And I'd love to give you, I'dlove to play a game again.
I'd love to give you some of my ideas.
Fast acting premiumsthat actually go away.
Absolutely.
So I'm going to give you Product Aand your first month in my membership
free, which will actually help yourconversions on your continuity product,
making sure that you disclose that you'regonna charge them and all that others.
Put that little caveat in there.
(19:21):
You come from me, but I'm gonna giveyou my first me membership free.
It's if you buy in the next 15 minutes.
Count time timer's there.
Yeah.
and it actually goes away.
Even if I retarget them with thesame thing over and over again.
It goes away in thatmoment for that truly.
I bet if you tested that, I've testedit where it worked and where it didn't
work, but I, most of the time it works.
They buy it on the retargeting and thenyou're not gonna pay the affiliate.
(19:44):
Sorry, Phil.
Okay.
So I'm gonna have somany comments over that.
So another way to create asense of urgency, they're
gonna scroll off the page.
And you see this all the time.
I'm sitting at a, on A productthat's for, we'll say, weight loss.
And I go to scroll off andyou see the popup come up.
Big pharma is shutting me down.
I don't know if I'mgonna be here tomorrow.
(20:05):
What's another way I can do that?
Don't lie to consumersand create an incentive.
Just I a hundred percent.
But how can I give you some ideason how, and you can tell me.
I don't even know ifit's gonna be illegal.
We'll see.
Let's see how much I actually know.
Okay, I'm going to scroll offthe page and I scroll to the top.
And instead of saying big pharma, itsays, wait, are you sure you wanna
(20:28):
go click here for an extra 15% off?
That would be fine, but youalways gotta a no, that's fine
in isolation, totally fine.
Okay.
If you want to incentivizeconsumers to buying now.
That's fine.
Scaring people into buyingnow is a different thing.
I agree.
The big pharma, no, you just wanna go.
We already said that's bad, but hey,if you wanna buy this now, you'll
get an extra 15% off your order.
(20:50):
The counter argument to that is it'sstill deceptive because you're trying to
lean on consumers, emotional fear, thatthey 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 encourageconsumers to make a purchase.
So I'll give you another one.
Okay, so I go to scroll offthe page and a lot of times
you'll see and don't come at me.
(21:10):
I've never ever done this, but you go toscroll off the page and it says, wait, big
pharma is trying to shut this page down.
I don't know if thiswill be here tomorrow.
Absolutely.
Can't do that, right?
Can't do it.
That's bad.
Gone.
Sure.
Here's a way that I thinkpossibly you could do it.
Perhaps maybe they go to scroll offthe page and it says, wait, this
product is really amazing at X. Ifyou try it today, we'd like to offer
(21:31):
you an additional 15% off fine.
No problems there.
Because you're not trying to convey like,Hey, if you don't do this now right.
You're not gonna be able toget it again in the future.
It's just, here's one moreincentive of why you should make
a purchase, why you should buy it.
Yep.
Instead of, scaring people intooh my gosh, is gonna go away.
I'm not gonna be able to get it again.
This is in such low quantity thatI'm not gonna be able to get it
in the future I have to buy today.
It's just if you wanna makea purchase today, we'll give
(21:52):
you an additional incentive.
You want people to feel not scaredabout their purchase or not worried
that if I don't want, As a marketer,you want them to feel scared.
Yeah.
PC doesn't want people to feel skeleton.
So you have to find the balancein making them feel like it's
going to solve a problem thatthey have not been able to solve.
That they feel like their life is notgoing to be what it could be without it.
(22:12):
And that they are incentivizedto buy today without making them
feel like the product is goingto go away if it's really not.
Correct.
Okay.
All right.
So that was fun.
I wanna talk about pricing 'causeI 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 aboutpricing and I'm gonna, actually, after our
(22:33):
conversation yesterday, we went to dinnerwith some friends of ours and before
dinner we were talking and you told methat you can't use strikeouts on pricing.
So we're gonna gothrough that in a second.
But then I thought of some other things.
So I'm gonna segue us into that.
I do split testing on pricing, so Ifeel 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 mytraffic go to a $47 price point, and on
(22:57):
50% of my traffic go to a $69 price point.
Is there any issue in pricingwith that split testing pricing?
No.
Split testing.
Pricing is fine.
Okay.
It's the strike through pricing component.
Okay.
Perfect.
Yeah.
So this is how, by the way, Idon't pay him the $715 an hour
to ask him a simple question.
I'm just kidding.
So now let's talk about strikethrough, because I have not seen a
(23:19):
checkout page in a really long time.
For supplements, for gadgets, fortools even where it didn't have the
price a strike through the priceand a cheaper price even on tv.
I can't think of a checkoutpage that You're not gonna
pay, you're not gonna pay.
This is what you're gonna pay.
So walk us through why thisis wrong and how we, and then
(23:40):
you let me know how we do it.
So when you're advertising a sale ora strike through you need to advertise
the prevailing market price and inleast California the prevailing market
price for the last three months.
And so you actually need to the pricethat you're striking through the
full retail price, you actually needto sell the product at that price.
Not only do you need to sellit, regulators are gonna say.
You need to sell it and we needto see a substantial number
(24:02):
of unit sales at that price.
And we've seen a ton of class actions.
I've got a couple of them rightnow on strike through pricing.
And it is, you have falsely representedthat this retail price was the purchase
price and that these consumers aregetting this deal that never existed.
And what you're actually sellingis the, this product at full price,
but misrepresenting it as a sale.
And the way to do this isone you were talking about.
(24:26):
Split testing on pricing.
Yep, totally fine to do that.
You can also have different channelswhere you're selling products,
and so you might have your Amazonaccount or your Amazon storefront.
That is where things arelisted at full price.
You might run a promotion onYour main website or sales
page or something like that.
Okay?
But what you need to be ableto show is that you're actually
(24:46):
selling the product at the saleprice or at the full retail price.
And so often people don't do that.
they come up with some number thatthey think sounds great, they slash
it through and then say, 9 todaythat you can't do, how do I do that?
How do I make that same outcome happen?
Yeah.
So you need to be advertisingit and selling it somewhere
for the full retail price.
Okay?
Now.
I know where you're going.
(25:07):
Light bulbs are all over the place.
So your next question is what if Ionly drive my traffic to, I don't
drive any sort of traffic to myAmazon sales storefront or Shopify
or, so I have a storefront, Shopify orAmazon where I just put something up.
I have no traffic to.
That price is $149.
That's the strike through price that Iuse on where I actually send my traffic.
(25:30):
So that's where you are.
Why or why not?
That's where you're gonna get intoan argument over whether or not that
is actually the prevailing marketprice 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 andforth with opposing counsel or regulators
of saying yeah, I get that you're,advertising at a Walmart or Etsy or
any of these storefronts, but you have.
10 sales.
(25:50):
Like how?
How can you use that?
As this is the prevailing market price.
This is what most consumers havepaid over the last three months,
that you get into a difficult spotand you start having to do some word
gymnastics to try to argue around that.
But so long, defendable.
Depends on how many sales you have.
A lot of people will go and buya ton of stuff off of Amazon.
I mean I do it all the time.
I don't search around'cause it's just easier.
(26:12):
And so some Amazon storefrontswill have a ton of sales just
because they make it so easy.
So it's a lot more easyto substantiate that.
Yeah.
your product is 99, 95 a month or 99.
95, whatever the price is.
And so can I tell you why I like Amazon?
Why?
Couple of reasons.
Number one, I don't worryabout some BS and I'll even go
look at terms and conditions.
I don't have to worry about some BS chargecoming in that wasn't disclosed to me.
(26:34):
'cause a lot of people do that.
I buy one time and that's it.
Number two, I don't have topay shipping and handling.
I don't know why, but I would ratherpay Amazon $10 more for a product than
pay you $4 for shipping and handling.
I have no idea why, and I have noidea where the package is either Yeah.
At least with Amazon, I knowit's gonna be there in two days.
Not only do I know it's gonnabe there in two days but I know
it's actually gonna show up.
Yep.
And if it doesn't, I'mnot gonna call anybody.
(26:56):
I'm going to send a quick chat and I'mgonna get my money back immediately.
So there's just so manyaspects to this, but, okay.
So the answer on Amazon is youcan't or Amazon, or, and I don't
wanna just say Amazon because.
I would probably not do Amazon.
I would probably do Shopify.
Okay.
The takeaway from all of this is ifyou're really running a fake sale, it's,
we're not gonna call it a fake sale.
We're no.
(27:17):
You should know better than this.
We're not running a fake sale.
We hope to sell on Amazon, but our.
Traffic dollars are going intoa funnel with an upsell flow.
Whereas Amazon, I don't havea funnel with an upsell flow.
As my attorney, I would advise you toadvise the FTC that on Amazon, I can't
gather their data, so their lifetimevalue isn't worth as much to me.
(27:40):
But it's also on that becauseI can't retarget them.
That's true, but it's also on the.
The prevailing price of that product.
I don't care about the lifetime valueof the customer, it's the product.
Fair enough.
So I tried, if it is fine to dothis, but you need to be able to show
that you're actually making sales.
Okay.
And so there's, there are whatpercentage of sales that's gonna
(28:01):
depend on, okay, how much trouble doI get in for strike through pricing?
So consumer class, action liabilityyou typically broad in California.
You're looking at statutory penalties byway, you just don't sell in California.
It's the 13th largesteconomy in the world.
People need to sell there.
I would say a good 30% of your sales,just picking a number outta a hat,
a good 30% of your sales needs to becoming from, the full blown retail price.
(28:23):
The problem is that actually prevailing?
'cause if you're only getting30%, I think it's more defensible.
If it really is like single digitpercentage, you're gonna have you're
gonna be facing an uphill battle.
Because it's gonna look likean ephemeral or a false sale.
Okay.
This has been great.
I wanna just close with one more question.
Health, beauty and finance,they're under the most scrutiny.
(28:43):
Easy.
Why?
Because it's what everybody wants.
Everyone wants to be healthier.
Everybody wants to be morebeautiful, and then everybody wants
to be financially independent.
And so it's just that people arebuying more in those categories.
Exactly.
it's what everybody'sconstantly looking for.
Got it.
Everybody wants to work fourhours a week and be a millionaire.
Nobody wants wrinkles.
You know how you get money, youwork really hard for it, or daddy.
Alright, so Ryan, this has been awesome.
(29:06):
This is our first of hopefullymany marketing on trial.
It's been fun.
I'm gonna just run through someaction steps for our listeners.
And so step one, audit yourcurrent marketing for risky claims.
That's gonna be like really important.
Actually read through.
You wouldn't believe the amountof business owners haven't
actually read through whattheir copywriters have posted.
(29:28):
Step two, ensure all your testimonialsand endorsements are FTC compliant.
So meaning, you know you're followingtheir guidelines and you have evidence
of what you're saying is true.
Step three, avoid misleading pricing.
Scarcity tactics or deceptivefee trials or anything like that.
(29:49):
We didn't really go into that, butI wanna throw that one in there.
Step four, get legalapproval for your marketing.
If you're selling online, whetherit's health, fitness, or finance,
or anything, if you're following allthese guidelines, it isn't gonna take
that long for your attorneys to runthrough everything and give you a,
Hey, here's where your risks are.
(30:10):
So take the time to do that.
Step five, keep updated.
Stay in, in touch with what theFTC's guidelines are today and
what they're going after today.
Whether it's that you listen to thispodcast or other podcasts, you just
simply read on the interwebs, and makesure you are educated in what you're
selling and what your requirements arefor the products that you're selling.
(30:32):
So we hope you enjoy this episode.
the FTC doesn't care if you don't know.
Ryan said, if you're driving 95 milesan hour down the street and there are
10 other cars driving 95 miles an hour,the only person getting fined is you.
'cause you're the onethat got full pulled over.
So protect yourself.
Now.
Get the free FTC compliance checklistthat Ryan and I co-wrote at www do special
(30:54):
ops podcast.com in our visionary vault.
Subscribe for expert insightsto marketing compliance.
And business protection right here,and we will see you next time.
See you guys.
Popular Podcasts
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.