most small businesses advertise their goods or services at some point. the overwhelming majority of owners decide what to say, how to say it, and where to say it without benefit of outside guidance or expertise. this all-too-common approach poses 2 major risks :: 1) the money and effort spent will yield little to no "results;" 2) the business will be exposed to a number of potentially serious liabilities (ranging from dissatisfied consumers and a damaged reputation to illegal practices with serious financial repercussions).
before starting any conversations around the first set of risks, it only makes sense to start with the second. after all, no advertising results are good if they ultimately lead to costly trouble! so here's a brief primer on 3 fundamental legal mistakes many small businesses make in their marketing communications.
this is about the proverbial fine print. many small businesses create ads that fail to clearly and conspicuously disclose all the information about an offer that's likely to affect a consumer's decision. another common shortcoming is in failing to place the most important information (key terms) close to the advertised price.
perhaps most problematic of all, however, is when a business attempts to hide an offer's real cost or critical terms and conditions by ::
TIP :: with digital advertising is playing an ever-increasing role in marketing communications, here's one thing to remember that can help with communicating the essentials :: you can use hyperlinks to inform consumers about less critical terms and conditions (especially when the information is extensive, such as terms around subscription cancellations or rebate offers). just be certain your hyperlinked disclosures are clearly labeled to show their importance, nature and relevance (for example, "early cancellation of this service may result in substantial penalties. click here.") vague labels like "terms and conditions" are not enough to direct consumers to important restrictions or qualifications.
advertisers (and ad agencies) must be able to document their basis for all advertising claims before they are ever published. the federal trade commission (ftc) is pretty serious about this stuff, with violations deemed "unfair and deceptive acts" under the law (in case you harbor any doubt, that's not a good thing).
so, if you're communications make any express claims (think of phrases such as "tests prove", "doctors recommend", and "studies show"), make certain you have the backup in place to prove it before anything is released. if you're claims are implied, be sure your records document a "reasonable basis" for what's been communicated.
TIP :: most small businesses only be make a limited number of claims, if any, so documenting your substantiation is often just a one-time affair (especially if your ad copy is phrased to anticipate future change). this is where expert guidance can be particularly helpful.
endorsements and testimonials are an increasingly popular way for businesses to communicate credibility and trust, and there are some pretty concrete rules around their use.
first, your endorsements must always reflect the honest opinions, findings, beliefs, or experience of the endorser. they should never contain representations that are deceptive or that you can't directly substantiate (see "prior substantiation" above). and while the message does not have to be phrased in the endorser's exact words (unless your advertisement represents them as such), you cannot take your endorser's words out of context or distort their opinion or experience in any way. this all essentially boils down to "no embellishment."
just like reckless drivers don't always get pulled over by the cops when they're weaving in and out of traffic, businesses don't always get called to task when they play fast and loose with their advertising.
bear in mind, however, there are even more undesirable outcomes than a ticket (like causing an accident). the business risk associated with "bad" advertising lies in causing damage to your reputation -- a risk that's highly amplified in today's world of social media and other on-line platforms).
so if you're a ZENLegal client, here's our reminder :: engage your attorney and have him or her review your marketing communications before they head out the door. and if you're not a ZENLegal client... well, why not?
jack speranza is an attorney, small business owner and principal of main street ventures. for 15 years he has helped his companies and his clients strike the right balance between risk and reward by weaving good business, good technology and good law into new services and operations.
happy new year everyone! we've been off the radar screen for many months creating a lot of exciting change for 2012, and our core theme is "simplicity." as i was listing my goals for the new year recently, my thoughts meandered to martin luther king (we honor him on monday). and this juxtaposition led to my thoughts for this 1st newsletter of the new year.
reflecting on dr. king's accomplishments, i started working backwards -- i wanted to imagine what his list of New Year's resolutions might have looked like. here's what i came up with ::
ironically, psychologists claim a big reason most of us flop at maintaining new year's resolutions is because we fail to make them realistic. business gurus say the same thing. sure, being realistic is important. in the context of the times in which he lived, however, many would have said dr. king's goals were not realistic. yet he succeeded. i'm convinced failure is driven more by a lack of simplicity than by a lack of "reality."
why simplicity is key
consider my imaginary resolutions for dr. king. their simplicity articulates their essence. their simplicity fully examines and understands all their complexity, yet is itself uncomplicated. their simplicity orients us to what needs to be done. there's a tremendous amount of complexity wrapped up in a just this little bit of simplicity. once we have simplicity, however, things become easy. and so we succeed.
it's taken years to recognize, but i now realize main street ventures solves the same, big problem for every customer (be they start-ups or established businesses) -- the dire need for simplicity. naturally, our customers don't see it this way... they define their problems in other ways. those who ultimately work with us come to "get it." and they succeed.
which brings me to ZEN
at the end of 2010, this company launched the ZENBungalow. having recognized simplicity has always been our key to creating success, this became our first brand extension clearly driven by the core values of simplicity, clarity, focus and collaboration. though most perceived the bungalow as a "place," it's really an accelerator. we liken it to throwing gasoline on a fire.
this month main street ventures launches two pilot programs driven by these same core values -- ZENCubate and ZENLegal. we're in the process of pushing information out about each on our new website. my professional resolutions for these programs may not be quite as lofty as dr. king's, but they are ambitious ::
i look forward to sharing more in the days ahead -- especially how simplicity can bring value to small businesses everywhere, including yours.
jack speranza is ceo and founder of main street ventures and passionate about building profitable, independent businesses.