Familiarity with FTC endorsement guidelines essential to avoiding legal problems

Customer testimonials are a powerful marketing tool for many small businesses, but be sure that you're acting within the law when using them. Read on for helpful tips and a breakdown of endorsement regulations.

Keep It Legal

Be sure that your customer testimonials meet fair marketing standards by following these guidelines.

Get written permission. Have your customer sign a written agreement that specifies what content you will be using and how you will be using it. This is particularly important if you want to use photos or information regarding age, name, or location. Typically the more information you can provide about a testimonial, the more believable it will be. For example, assigning a glowing review to an anonymous "satisfied customer" will likely not resonate as much as attributing the quote to "Joe Smith, Allentown, PA" or "Betty Johnson, investment banker."

Comply with the FTC's Truth-In-Advertising guidelines. The Federal Trade Commission (FTC) provides clear guidance on how to practice fair advertising:

Endorsements must be truthful and not misleading.

If you don't have proof that the endorser's experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances.

If there's a connection between the endorser and your business that would affect how people evaluate the endorsement, it should be disclosed. This includes relatives and customers who were compensated for their testimonials.

Address expectations. Remember that if a testimonial claims specific results, other customers will interpret that to mean that they can expect the same results. If others can't expect to get those results, the ad likely would mislead consumers.

According to the FTC, disclaimers like "results not typical" or "individual results may vary" won't change that interpretation, which leaves marketers with one of two choices:

Have adequate proof to back up the claim that the results shown in the ad are typical.

Clearly and conspicuously disclose the generally expected performance in the circumstances shown in the ad.

Practical Tips

Use the following tips when approaching customers to provide testimonials:

Be timely. Ask customers to participate in a testimonial shortly after their transaction is complete. Their memory and enthusiasm will likely fade as time passes.

Be specific. Ask customers to be specific about the advantages of your products or services: for example, by discussing how much time or money they saved or describing a particular part of your customer service approach that appealed to them.

Questions? The FTC Endorsement Guides offer more than 35 examples of how endorsements apply in practical settings.