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The FTC has made noises of late that it would be taking action about the growing problem of fake or paid for online reviews, but this week it slapped its very first fine on a company: $250,000, no small potatoes. It’s the first clue as to what kind of enforcement and penalties are likely to unfold, according to a detailed article at PaidContent: http://paidcontent.org/article/419-ftc-fines-company-for-bogus-online-reviews/
A company called Legacy Learning Systems was hit this week with a quarter-million-dollar fine (and other sanctions) for hiring affiliate marketers to write glowing reviews about their educational DVD series, and failing to disclose they were getting paid for sales the reviews generated.
The article notes that the fake review problem (that old ‘sock puppetry’) has been around since the Web was hatched, but we’re only now just starting to see major legal action. (Prior cases included a handful of cases that involved settlements, but not outright fines). Experts speculate there will be more cases like this around the bend, but the FTC is barred by law from talking about investigations while they’re underway.
The FTC issued its guidelines in 2009 on reviews/testimonials, and they spell put what they deem “unfair or deceptive advertising” – because that’s essentially what it is.
A key rule: Any positive review posted by anyone connected to the seller – or someone/a business that receives cash or some form of payment – must disclose the relationship. The FTC stated: Anyone that uses someone else to “promote their products would be wise to put in place a reasonable monitoring program to verify…that they follow the principles of truth in advertising.”
The FTC is sending a clear message to businesses…
• It’s never been more important to be 100% authentic in your review-gathering and Online Reputation Management – the penalties can be HEFTY
• Never compensate in any way a customer or an affiliate for posting positive reviews
• If someone’s assisting you with Online Reputation Management, make sure you fully understand their review gathering, posting and distributing processes. They have to be YOUR real customers, and they have to post comments themselves.
The moral: Always BE authentic. There is NOTHING but dividends…because a 100% real, believable positive online reputation can drive quite unbelievable business for dealerships.
Any questions? Contact Merla Turner, Director of Dealer Training, eXteresAUTO: firstname.lastname@example.org or 866-994-2613