Over the past decade I’ve personally witnessed direct response marketers like Steven Warshak crush it. Starting off in his basement in 2001, Steve built Enzyte, a natural male enhancement supplement that brought in over $400 million dollars in revenue for Warshak, most of which was profit. You remember the ads, right?
You may have noticed that these ads are no longer running on CNN, Fox News, and other top notch media sites. Why? As you guessed, Warshak was a really good direct response marketer, but a really bad businessman. Often times the 2 are not synonymous.
Had Warshak considered regulations when building his brand, his offers would still be around. Instead, Warshak is spending the next 24 years (already served 1) in a Federal Prison. His assets? The government took them all. And for good reason.
1. Hiding Disclosures
Free trial products such as Warshak’s Enzyte sell like hotcakes. Customer’s sign up for a trial and get billed 14 days or more later. There’s nothing illegal or unethical about trial offers, so long as your prominently disclose the terms. The FTC requires a negative option, meaning that consumer’s must check a box stating that they agree to the terms and conditions of the offer. The FTC also requires that the terms are clearly and conspicuosly stated. Here’s an example of a page that follows guideline rules: Nitro Shock.
Warshak hid the terms from consumers, effectively duping them into a program they did not want to pay for.
2. Making It Difficult To Cancel
When a customer wants to cancel let them. Warshak forced his customers to send letters to his company from their doctors stating that Enzyte wasn’t working – humiliating for men with ED. Without the letter he wouldn’t let them cancel.
I set most of my clients up on custom trial accounts where the banks handle the cancellations 24/7. That way my clients can process millions of dollars and not have to worry about the liability of having a customer lie about not being able to cancel.
3. False Testimonials
The testimonials you use on your site need to be true and accurate. If you sell a weight loss supplement, do not make claims that it will make you use 30lbs in a month. Even if you have 1 or 2 clients that have had extraordinary success, unless the average consumer should expect the same results, do not include their pictures on your page.
4. Delayed Shipments
On trial orders, FTC guidelines state that you must have the product delivered within 4 days. If there’s a delay in shipment, you need to extend the trial. If you cannot extend the trial, cancel the order and refund the customer.
Before you take your offer live, retain a good attorney. We are represented by Venable, and our go to contact is Tom Cohn, the former regional director of the FTC.
Don’t take unneccessary chances. Any fool can make a million dollars in direct response marketing, although it takes a wise man to keep it.