Understanding the New FTC Rule on Fake Reviews and Endorsements
As a small business owner, you might have heard about the new rule from the Federal Trade Commission (FTC) banning fake reviews and endorsements. The new rule goes into full effect in mid-October, 2024.
This rule is super important for anyone who relies on online reviews to attract customers. Let’s break it down in a way that’s easy to understand and see how it might affect your business.
What’s the New Rule About?
The FTC’s new rule is all about cracking down on fake online reviews and misleading product or service endorsements. Essentially, it aims to ensure that all reviews and endorsements you see online are genuine and not paid for or fabricated. This means no more fake five-star reviews or influencers promoting products they’ve never used.
Why Should You Care about Fake Reviews?
As a small business owner, your reputation is everything. Genuine reviews can help build trust with potential customers, while fake reviews can do the opposite. Here’s why this rule matters to you:
Trust Building: Authentic reviews help build trust with your customers.
Fair Competition: Ensures a level playing field where businesses compete based on the quality of their services, not fake reviews.
Legal Compliance: Avoid hefty fines and penalties by staying compliant with the new rule.
Key Points of the Rule
Here are some of the main aspects of the new FTC rule:
No Fake Reviews: It’s illegal to post fake online reviews or pay someone to write a fake review.
Clear Disclosures: If you’re paying someone to write a review or endorse your product, it must be clearly disclosed.
Penalties: Businesses that violate these rules can face significant fines and penalties. Fines can exceed $50,000 per violation.
Staying on the right side of this rule is easier than you might think. Here are some tips:
Encourage Genuine Reviews: Ask your happy customers to leave honest reviews.
Avoid Paying for Reviews: Don’t pay for reviews or offer incentives in exchange for positive feedback.
Be Transparent: If you’re working with influencers or reviewers, make sure they disclose their relationship with your business.
Benefits of Genuine Reviews
Genuine reviews can do wonders for your business. Here’s how:
Build Credibility: Real reviews from real customers build trust and credibility.
Improve SEO: Search engines love fresh, authentic content, which can help improve your search rankings.
Learn From Customer Insights: Honest feedback from your customers can provide valuable insights into what you’re doing right and where you can improve.
What If You’ve Used Fake Reviews?
If you’ve used fake reviews in the past, don’t panic. Here’s what you can do:
Remove Them: Take down any fake reviews from your website and ask review platforms (like Google or Yelp) to do the same.
Apologize and Move Forward: If necessary, issue a public apology and commit to using only genuine reviews moving forward.
Educate Your Team: Make sure everyone in your business understands the importance of genuine reviews and the new FTC rule.
The Bottom Line
The new FTC rule on fake reviews and endorsements is a big step towards ensuring transparency and fairness in online reviews. As a small business owner, embracing this rule can help you build a stronger, more trustworthy relationship with your customers. Remember, honesty is the best policy, and genuine reviews are worth their weight in gold.
Stay compliant, encourage honest feedback, and watch your business thrive!
If you found this helpful, please share it with the buttons on the left or the Click-To-Tweet above.
Your thoughts and opinions are welcome. Join the discussion in comments below.
Online reviews, whether positive or negative, affect your reputation.
That in turn impacts your revenue. For example, BrightLocal found that 57% of consumers will only use a business if it has 4 or more stars.
That’s because customers see your online review profile and believe those reviews. According to Inc. Magazine, 84% of people trust online reviews as much as personal recommendations from family and friends.
Don’t go nuts. Watch your review velocity; review sites and Google certainly do. If you get too many reviews too fast, they may be seen as purchased links or spam and be filtered out.
Diversity is important. If a citation site you’re listed on features reviews and you have none there, your citation is incomplete. It reduces your authority and your credibility.
Action Plan: how to manage your online review profile
Look yourself up by name
The first thing that jumps out at people is your Google Knowledge Panel at the top right. This is probably the most important place for you to have online review stars. If you don’t have any stars here, this is the first place to get them.
What other citations appear on the page? Your Facebook page may show up, perhaps a MerchantCircle page, maybe a Yelp listing, and maybe others. Do they have review stars? If not, those should be the second priority for you.
Online reviews don’t just happen
A good online review profile doesn’t just happen. If you have an unhappy customer their anger or disappointment provides built-in motivation for them to leave you a bad review. Happy customers are less likely to write a review without a little prompting.
Some businesses post a sign that says something like “We welcome your review on Yelp.” Or some variation on that. That plants the suggestion in the customer’s mind that they can (should) share their opinion of you.
Beyond that, you can also ask your customer for a review. Some businesses do that at checkout. Others that have customer email addresses send them an email request for a review with a link to your listing on the platform of your choice to make it easy for them.
Check out your niche
Do a keyword search like car repair shop in Morristown. Or New Jersey elder law attorney. Which industry sites and local directories show up? You may find something like a Morristown business directory. Or you may find a directory of elder law attorneys. If those directories accept online reviews, you need to have some there. If the site is fee-based, you may need to consider the relative value, but many are free.
Check out your competitors
Which of your competitors show up for your most important keywords? Search those keywords and make a note of which competitors are showing up on the first page or two. And then look up those competitors by name and see where they have citations with review stars. Those are all places you should also have reviews.
Go through at least the first three pages of results for each competitor to catch the most important citation/review sites.
Consider broader sites as well
There are a number of more generic sites that are powerful sources of online reviews. Some of the best ones include:
It’s not enough to just ask customers for reviews. You need to respond to reviews as they appear. It’s normal for reviews to appear that you haven’t requested. And not all of those reviews will be glowing.
Responding to reviews promptly is associated with a 33% increase in conversions. We talk about the importance of monitoring and responding to reviews in our post Respond to Reviews and Get More Business.
As you might imagine, it can be quite time-consuming to monitor all of the places that host reviews for you. Fortunately there is the relatively easy solution. Most of our local SEO clients subscribe to a service that, among other things, sends them an email every time a new review is posted, with a link to that review so they can reply. If that’s of interest to you, reach out to me and I’ll explain how it works.
Your perspective is valuable. Please share your thoughts in the comments below.
Find this helpful? Please share it with the buttons on the left or the Click To Tweet above.
