photo credit: rick

One of the things I’ve always counseled you to use in your marketing is testimonials: carefully chosen things your customers have said about their experiences using your products and services.

On Dec 1 2009, that changes a bit.

In some ways, it’s a good thing. It’ll make almost all those lame infomercials edit their fake testimonials.

In others, it’s a bad thing because it will punish (or frighten) good businesses by making them think they can no longer use testimonials or that the ones they can use have to be gutted.

Neither is true.

A great testimonial addresses…

…a common sales objection.

Getting a testimonial – particularly a strong, believable, honest one that directly addresses a common sales objection – can be difficult. Not so much because they are hard to get, but because people don’t always like to talk about their use of a product/service. A lot of that depends on what it is.

Not everyone understands what kind of testimonials are truly valuable. When people tell you they love the product or that they love working with you and your service is wonderful, those are nice and heartwarming comments, but they aren’t strong testimonials.

One type of strong testimonial states specific results, such as “We’re up 70% in same month, prior year sales after working with Mark to improve our marketing over the last 3 months”. That’s a good testimonial, and it’s (naturally) the exact type of thing the FTC doesn’t like.

Why? Because it states specific results that might be 100% factual for one person (or 100, if you have that many), but it still doesn’t mean that every single Joe Blow can achieve the same results by simply falling out of bed in the morning.

If everyone who buys your product can’t typically achieve a documented, 100% factual result stated in a testimonial when THEY use your product / service, you will have a problem using that testimonial EVEN IF 99% OF YOUR CUSTOMERS NEVER USE IT.

Isn’t that grand? “Lowest common denominator” comes to mind.

As you likely assume, these regulations came about mostly because of the bad apples out there. So be it. Let’s get to the details.

Bad apples beware

The new FTC regulations that take effect on December 1 2009 that will require you to be far more careful about the testimonials you use.

Quoting the hard-to-believe results of one highly-motivated person and then saying “these results are not typical” is no longer sufficient. You have to state typical results that your customers get when using your product or service. If those turn out to be difficult or impossible to achieve, expect the FTC to come calling – and not for dinner.

If you haven’t already done so, you need to check your marketing materials TODAY for any claims that – no matter how real and accurate – are not typical.

You can see the FTC-issued guidance on this at http://www.ftc.gov/opa/2009/10/endortest.shtm

This applies to bloggers, advertisers of products/services and many others, so I strongly suggest you give it a look. It’s not a game. Regardless of what party is running Washington, these folks seem to revel in making examples out of business people to ‘send a message’ to everyone else.

Sometimes, these things come down very unfairly. Don’t let it happen to you.

More details from the FTC are available here.

Be gone with you, Debbie Downer

Now that we have the “Debbie Downer” stuff out of the way, there is some good news in this because it does punish the slime in your market along with the good guys.

Several things come out of this, but one thing is clear – it makes measurement all that much more critical to your success.

If your product or service can somehow anonymously document what it does – easy for some products and services, almost impossible for others – you will be ahead of the game.

A lot of this applies to software businesses and those with automation in their products / services – but if testimonials are important to your business, measurement might become essential across your entire product line.

Implement results measurement into your products and services. Not only will it help your product / service, but it will help you sell them to those who REALLY need them AND it’ll be the evidence you need to prove the results of typical use.

NO, I’m not a lawyer. If testimonials are central to everything you do, I strongly urge you to consult your attorney about these regulations.

Meanwhile, you should be measuring results. Imagine what will happen if your products / services can prove to your customers what they are doing for them (and what they are not).

That’s why we’ve had this measurement conversation for years prior to the FTC forcing it upon you.

photo credit: NyYankee

While grumbling to myself about the effectiveness of the “Making CPSIA testing economics reasonable for small business” population (my name for a number of “us”, not a name this non-group group has adopted), I continue to be disappointed in the actions being taken by Congress to repair the Act.

With that, I think it’s a good time to announce that the political posts here will cease.

I’ve created another blog that is designed specifically to address political and regulatory issues faced by small business.

Why?

I simply don’t want to dilute the message that Business is Personal has stuck to for the last 4 years (yeah, I forgot to mention we had a birthday – what the heck am I thinking?) and frankly, I’ve done exactly that over the last several months.

While it has been a positive for the blog’s traffic, it isn’t the reason why BIP exists. I thought briefly that maybe it should be, as it resonated with a lot of folks (blog traffic has tripled since I started talking about CPSIA).

Despite that, I’m taking that message elsewhere. It’s off topic, mostly.

When I have that “elsewhere” ready to unveil, I’ll let you know. It won’t be too long.

photo credit: PixelManiatiK

For decades, I have avoided getting involved in politics mostly because it has a way of seriously annoying me.

As I hope you’ve noticed, I’ve also avoided getting politic-y here at Business is Personal – maybe with the exception of discussions regarding the CPSIA.

Despite my best efforts, Congress is working overtime to pull me into their world.

And then this morning, I’m talking to a prospect who asks “Do you get involved in politics much?” Hooboy:)

Never fear, however. BIP is not here to be political. I will avoid it at every possible occasion.

Regulation is necessary

Regulation is necessary and anarchy is a pretty bad alternative. The problem is that Congress seems to be working overtime to destroy small businesses, intentional or otherwise.

Those that deserve it, so be it. Most do not, IMO.

It seems fairly obvious that we can legislate the loss of jobs a whole lot easier and faster than we can create them via legislation.

Almost 30 years ago, the Regulatory Flexibility Act (RFA) was put in place to protect small business from a “substantial impact” from new rules put in place by agencies as a result of new Federal laws.

The name sounds all nice and cuddly, doesn’t it? “Regulatory Flexibility Act” Awwww:)

The law requires an analysis of any new agency rule to make sure that it wont significantly harm a substantial number of small businesses. Agency rules implement the enforcement of legislation passed by Congress and signed into law by the President.

Problem: New rules can avoid the analysis if the enforcing agency’s head “certifies” (by publishing a statement in the Federal Register) that rule won’t adversely affect small businesses.

For example, the CPSC (Consumer Product Safety Commission) recently entered official comments into the Federal Register regarding several important CPSIA issues.

One of the things in that Federal Register entry is the RFA certification statement that says the CPSIA “doesn’t impact small business”. In that link, see page 10479, section G where they make all things right with the small business world by simply saying small businesses (even those “evil mommybloggers” who own businesses<g>) won’t be affected.

My Kingdom for Safe, Modern Food!

A new challenge for some small businesses might be HR875, which has an easy-to-like name: the “Food Safety Modernization Act“.

Not even Mr. Peanut would try to convince you that we don’t have food safety work to do.

Like the CPSIA, this law appears to target large food processing facilities, corporate farms, imported foods and so on. After all, you don’t hear about thousands being poisoned from foods purchased at the local farmer’s market.

Just like the CPSIA doesn’t differentiate between moms who sew outfits for my granddaughter and big Chinese factories that import a few thousand container loads of mass-market clothes per year, the FSMA (HR875) doesn’t differentiate between Tyson, Conagra and the guy who owns 9 chickens so he can sell eggs once a week at the local farmer’s market.

Not even the USDA-certified organic farmer escapes the FSMA’s reach.

All your chickens are belong to us

No, that is not a typo.

Finally, there is the new animal radio ID labeling regulation currently National Animal Identification System that is winding through Congressional committees.

Yes, I regularly remind you to measure everything, so I can see the good coming from this.

Except…

The problem with the NAIS, as with the CPSIA and the FSMA, is in the cost of implementation when you compare a large corporate farm to someone who organically (or not) maintains even one head of livestock or 9 chickens.

The point of all of this? You need your trade association. If you don’t have one, start one. If yours stinks, get involved and make it better.

No, it won’t be easy, though fixing an org is easier than starting one.

Working as a Wal-Mart greeter is easy. Pushing the Staples Easy button is easy. If you wanted easy, you wouldn’t have started / bought a business.

These laws can just as easily impact your employer as they can you as a self-employed person, so you’re going to be subject to some of them one way or another.

Get involved.

photo credit: CarbonNYC

Over at PopTort.com, consumer advocate Andy Hoffman says that opponents to the CPSIA need to “grow up”.

I shared this comment with Andy on his blog, but just in case he doesn’t see fit to mark my comment as public, I’ll repost it here. Feel free to join in with your own reply.

Here’s what I had to say to Mr. Hoffman:

You’re only missing one little issue, Andy.

This isn’t about greedy business owners wanting to avoid the lead law.

In a lot of cases, its about stay at home moms who squeeze a second income out of their cottage business and use that as a way to enable them to stay home and be a mom to their kids prior to their kids entry to school.

Some have managed substantial success, doing more than just squeaking by.

These moms (and others) who manufacture organic cotton onesies, tshirts and so forth for infants (along with a litany of other stuff) quite often started making these things *because* of the crap that is sold at WalMart and elsewhere that was found wanting in the environmentally-kind department.

Before you think that I too am just another whiner throwing a tantrum – be aware that I dont own or work for a children’s products business and NONE of my clients are in that category.

What the uproar is really about is giving small businesses who dont have the economies of scale on their side a means of testing that doesnt put them out of business.

When you manufacture (which often means “sew”) something for $6 and tell it for $12, you cant afford to spend $57 to test it. Anyone can see that math isnt going to work.

The big thing that many miss about this law is that it isnt limited to impacting those who make, retail or resell children’s products: it’s the ripple effect throughout the economy from there.

All of those businesses use accountants, lawyers, graphic artists, web site geeks, and so on. All of them will be doing less of that.

To get a full image of the ripple, I suggest you read the post linked to above (in his blog form) and take note that 80% (yes, EIGHTY) percent of the people in the room were standing when I was done asking them to.

If 80% of the businesses in your area are affected by a law that could easily be altered, it might be in your best interest to look at it without wearing the jaundice-tinted Consumer Reports hat.

Small businesses aren’t asking for an exemption and they arent asking for a different set of rules.

All they are asking for is the ability to use the component testing performed by the manufacturer of the lot of cloth, vat of vinyl, etc.

That allows everyone using that lot (etc) to absorb the cost, rather than every manufacturer having to absorb the full cost of the test for every line of items they make from that bolt of cloth and so on.

Thanks.

Your turn: Pay a visit to Poptort.com and let Andy know how grown up you are.

Ian over at Aquinas and More Catholic Goods sent me some reaction he’s gotten from his wholesale sources regarding CPSIA.

As you might expect, they’re all over the board.

We have found that several of our vendors are in denial about the law and have flat out said they won’t get things tested because they already know that their components are safe. They have said they will send us a letter saying that everything is safe but aren’t actually going to get things tested.

Several have said that there is no way this can be enforced so they aren’t going to bother getting certified because everything is made here in the US.

Several others have said that testing will bankrupt them.

Retailers, what are you hearing from your wholesale vendors? Or have you bothered to ask?

photo credit: Steven Fernandez

Even if you aren’t using REAL testimonials in your ads, you should be. I believe we’ve talked about that a few times.

If you are using testimonials (again, you should be – I can’t nag about that enough), then you might be interested in some changes that the FTC is considering. They’d like to keep a closer eye on what people say about the things and services you sell.

As the CPSIA situation might suggest (and I think I’ve made it more than a suggestion), you have to be more vigilant about keeping track of changes in laws and regulations that can impact your business.

To that end, I suggest you slide over to the FTC notice of their Federal Register request for comments about the use of endorsements and testimonials in advertising. Here’s the 86 page request for comments (pdf) from the FTC.

EIGHTY SIX PAGES? Yeesh. But you gotta do it, if nothing else to avoid another CPSIA-like experience. The PDF is on my reading list for the weekend. If I find anything ugly, I’ll be sure and make note of it here – HOWEVER, you need to check it over to see if your business is impacted.

Rather than get caught being less than vigilant as many were by the CPSIA, I suggest getting on top of this before it becomes law. The deadline for comments is January 30, 2009.

It appears that the changes are common sense, but I strongly suggest you check it out for yourself – one person’s common sense is another person’s “One lamp or two?”

A quote from the FTC notice:

In the newly approved Federal Register notice, the FTC’s proposed revisions to the Guides address consumer endorsements, expert endorsements, endorsement by organizations, and disclosure of material connections between advertisers and endorsers (emphasis mine). On the issue of consumer endorsements, the proposed revisions state that testimonials that do not describe typical consumer experiences should be accompanied by clear and conspicuous disclosure of the results consumers can generally expect to achieve from the advertised product or program.

UPDATE: One of the reasons that we get these kneejerk reactions from Congress that hurt everyone is that there are still unethical vendors out there doing things that ought to get them slapped to the gutter. Things like this, for example. Thanks to Jeff for the heads up on this story.