Being an entrepreneur requires you to wear many hats. Not only do you have to provide a great product or service, but you’re also responsible for all of the financial details like setting prices, learning how to use accounting software, managing expenses; long term strategic planning, especially if you plan to grow the business; and human resources and the never-ending challenging of managing people. But no matter what kind of business you run, it seems like your “real” job is sales and marketing. After all, none of the other staff matters if you can’t get customers or clients to buy what you’re selling.
As a law firm, we can’t solve all of your marketing problems. But we can make sure your marketing plan doesn’t land your business in legal trouble. Like most things legal, advertising isn’t covered by a single law with simple rules but instead by a complex framework created by federal, state, and local laws, industry regulations, and common law restrictions on commercial speech. In this series, we’re looking at just what small businesses should know about advertising laws.
Advertising Must Not Be Unfair or Deceptive
Most of us understand that our advertising shouldn’t mislead potential consumers. This should be easy enough in your written marketing materials. However, you need to make sure that your written marketing materials and contracts actually line up with your day-to-day practices. Failing to perform the promised services or failing to meet any warranty obligations can give rise to claims for false advertising.
You should also make sure that your sales staff isn’t too overzealous in their claims about your products or services. The old adage, underpromise and overdeliver, holds true.
Any factual claims you make should be supported by evidence. For example, if you claim “studies show…” when advertising your product or service, you should actually have in your possession copies of those studies.
When to Use Disclaimers
Most of the small businesses we encounter aren’t trying to trick or mislead customers or clients. In fact, it’s typically the opposite. The question we usually get is some variation of “Do we need a disclaimer in this situation?” If you’re worried that your target audience might misunderstand either what you’re offering or the risks and/or benefits of that offering, then a disclaimer is probably appropriate. We see this quite a bit with services that are health-like but aren’t being provided by a medical professional, i.e., wellness services.
To be effective, a disclaimer should be clear and unambiguous and placed near the claim it’s related to. If you bury the disclaimer in small print behind several website clicks or otherwise try to hide it or keep your customers from actually seeing it, then you could still run afoul of the law.
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In future posts, we’ll also look at the potential for infringing trademarks you weren’t aware of, comparing your products or services to those of your competitors, marketing to children, and using influencers and endorsements. In the meantime, if you have questions about your advertising campaigns.
