Handbook / Marketing a small business

FTC endorsement guides for small businesses: testimonials done right

Testimonials, reviews and recommendations from real people are among the most persuasive marketing a small business can use. They are also regulated. The Federal Trade Commission's Guides Concerning the Use of Endorsements and Testimonials in Advertising, published at 16 CFR Part 255, explain how federal law on deceptive advertising applies to endorsements. This guide summarises what they mean for small businesses. It is general information, not legal advice.

What counts as an endorsement

Under the guides, an endorsement is broadly any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings or experiences of someone other than the advertiser. That includes:

• customer testimonials on your website
• reviews you quote or share
• posts by influencers or customers promoting you
• recommendations from experts or other businesses
• statements by people in your videos or ads

Endorsements must be honest

The guides say endorsements must reflect the honest opinions, findings, beliefs or experience of the endorser. Practically:

• use only testimonials from real customers who actually used your product or service
• do not put words in their mouths or change the meaning when you edit
• do not keep using a testimonial if you know the customer no longer holds that view or if your service has changed materially
• an endorsement cannot make claims you could not lawfully make yourself

The guides also state that advertisers can be liable for misleading statements made through endorsements.

Claims about results

If a testimonial describes a result, such as "I doubled my bookings", consumers may assume that result is typical. If it is not, the guides say the advertiser should clearly disclose what results people can generally expect. You also need evidence to support any objective claim a testimonial makes. Choose testimonials that describe experiences you can stand behind, such as quality of service, reliability or communication.

Disclose material connections

Section 255.5 deals with connections between an endorser and the advertiser that might affect how consumers weigh the endorsement and that they would not expect. When such a connection exists, it should be disclosed clearly and conspicuously. Common examples:

• paying someone to post about you
• giving free products or services in return for posts or reviews
• discounts, commissions or affiliate payments
• employees, family members or business partners promoting you
• entering reviewers into prize draws

Disclosures should be hard to miss and easy to understand, close to the endorsement itself, and in the same format as the endorsement, such as spoken in a video and written in a post. A disclosure hidden in a profile page or a long list of hashtags is unlikely to be enough.

Influencers and creators

If you work with influencers or creators, even small local ones:

• tell them in writing that they must disclose the connection
• give them simple examples of clear disclosure
• do not give them claims to make that you cannot support
• check their posts and ask them to fix missing disclosures

The guides indicate that advertisers should take steps to monitor and correct endorsers' posts.

Fake reviews and buying reviews

The FTC's separate rule on consumer reviews and testimonials, at 16 CFR Part 465, prohibits practices such as writing or buying fake reviews, including reviews by people who do not exist or did not have the experience described, and providing compensation for reviews conditioned on them expressing a particular sentiment. The guide to getting reviews explains how to ask for genuine reviews properly.

A simple testimonial process

1. After a successful job, ask the customer for feedback.
2. Ask permission to quote them, and how they want to be named.
3. Keep the original message, the date and the permission.
4. Edit only for length, without changing meaning.
5. Review testimonials periodically and remove outdated ones.

Employees and your own posts

If you or your staff post about your business on review sites or social media, disclose the connection. Never pose as a customer.

When to get help

If you run larger influencer campaigns, make health, financial or performance claims, or sell into regulated industries, consider getting legal advice. For social media work for clients, see social media management business.

Use only genuine testimonials with permission, keep records, avoid implying atypical results, clearly disclose payments, free products and relationships, monitor influencers, and never write, buy or condition reviews.