Earlier this year, the Federal Trade Commission (FTC) filed a complaint against a well-known company for misrepresentations regarding its online business coaching program. The company overstated (to put it politely) the potential earnings one could make if they were to purchase a business coaching membership with the company. The case has since settled (for an insane amount you’ll find out about later) but the complaint filed by the FTC gives us a great guide on what you can and can’t do when it comes to marketing your online courses, programs, or other services. Deceptive marketing is not as simple as you might think.
The company in question is an online business, not unlike many of my clients. They provide consumers with the tools and skills needed to develop their own “6-Figure” online marketing business. The offering that is the subject of this complaint gave consumers the option of several different tiers at a monthly recurring fee in return for videos, documents, and mentoring from the company’s business coach.
If you’re in the online space you are likely familiar with the term upsell. And, a lot of businesses use an upsell strategy to get consumers to purchase a higher ticket item. While there isn’t anything inherently wrong with this, the FTC pointed at that in this case, the majority of the videos and training in the lower tiers provided little to no information and were only used to upsell the consumer.
Lesson 1: You truly need to provide value to your consumer at ever tier you sell to avoid running into this issue.
The FTC also pointed out that in many of the videos and training terms such as “6 steps to 6-figures” or “6-figures in 90 days or less” were used. These types of marketing tactics are seen all the time, but that doesn’t mean they’re okay. In the case at hand, most consumers never even recouped their investment. Even though the company had posted on their website statistics showing that their customers were earning an average of $100.00 per month, and of course anyone could access this, the FTC still felt they were not forthcoming with their customers about what participation in the program would do for their business.
Lesson 2: Don’t make any type of promise you can’t deliver on. It’s pretty simple. I know you want to use that sales copy that makes your program sound amazing, but if your program hasn’t or can’t deliver the results you’re indicating, don’t say it can.
What is Deceptive Marketing?
Section 5 of the FTC Act (15 U.S.C § 45(a)) views a “representation, omission or practice deceptive if it is likely to mislead consumers and affect consumers’ behavior or decisions about the product or service.” Something like, make 6-Figures in 90 days is going to be considered deceptive.
How do you avoid this?
Before diving into your marketing plan for your online program or course or various other offerings you will want to (as I alluded to earlier) only say things that you can prove and include clear and conspicuous disclosures and disclaimers about your product or offering to help consumers understand the representations made in your advertising and marketing.
Many people I work with don’t think the FTC is watching them. But the truth is, they are. Their actions over the last 5 years have proven that they are watching businesses of all sizes for violations of their rules. When they come down on someone, they usually do so with a hefty fine, or in this case, a suit that ends up settling for $10.8 million. Yup, million. Business owners that want to avoid ending up where this company ended up should always consult with someone (an attorney) before launching a marketing plan that could land you in hot water.
If you have a course, program, or online business that you’re ready to get out there but you aren’t sure whether your marketing plan is FTC compliant send an email to Shannon@montgomerypllc.com and we can discuss!
Please note that this is not meant to be legal advice for you or your situation, this is merely some legal research and knowledge on the given topic