The Role of Evidence in Establishing Awareness for Branded Ingredients
Author: Latesha Richards
Contributing Author: Charles Spielholz, Ph.D.
July 2009
The Role of Evidence in Establishing Awareness for Branded Ingredients
Author: Latesha Richards
Contributing Author: Charles Spielholz, Ph.D.
July 2009
Guidelines for Endorsements and Testimonials in Advertising (2009)Daniel Honigman
On Monday, October 5, 2009, the Federal Trade Commission released its revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” — the first time these guidelines have been changed since 1980. A lot has changed in the public relations landscape since then, and many of these changes have stemmed from how consumers are using information they find on the Internet.
Guides Concerning the Use of
Endorsements and Testimonials in Advertising.
The Federal Trade Commission (“FTC” or “Commission”) is adopting revised
Guides Concerning the Use of Endorsements and Testimonials in Advertising (“the Guides”).
The revised Guides include additional changes not incorporated in the proposed revisions
published for public comment in November 2008
10 Customer Acquisition and Relationship ManagementDmitry .docxchristiandean12115
10 Customer Acquisition and Relationship Management
Dmitry Kalinovsky/iStock/Thinkstock
Patronage by loyal customers yields 65 percent of a typical business’ volume.
—American Management Association
Learning Objectives
After reading this chapter, you should be able to do the following:
• Identify how organizational growth is best achieved by an HCO, and state the effect of the product life cycle
on an organization’s revenues.
• Discuss several approaches that an HCO can use to attract new customers, or patients.
• Delineate the premises upon which customer relationship management is based.
• Explain the advantages of database marketing, and identify ways for an organization to use a marketing
database.
• Provide examples of how an HCO can effectively manage real and virtual customer interactions.
Section 10.1Organizational Growth
Introduction
This chapter focuses on how to attract and keep patients through understanding and meeting
their needs. The long-term success of an HCO depends on its ability to attract new patients
and turn them into loyal customers who not only return for needed services, but recommend
the HCO’s services to others. This is especially important because of the nature of the life cycle
for products and services, from their introduction to their decline. Attracting new customers
and keeping existing ones involves interacting internally and externally with patients, analyz-
ing data on current patients, and managing real and virtual interactions with patients. Manag-
ing relationships with patients helps to ensure that patients stay informed and feel connected
to the HCO through its internal and external customer relationship efforts.
10.1 Organizational Growth
Most organizations have growth as a basic goal. Growth means an increase in revenue and
a greater impact on the communities served. Growth also creates opportunities for staff to
advance and take on new responsibilities. While many activities can help an HCO grow, the
most important is the development of an effective marketing plan to provide a consistent
platform for the organization’s visibility and to brand the HCO as an attractive option for
medical services. The development of an effective marketing plan was stressed in Chapter 8
as a basic marketing need for an HCO: that is, to inform new and existing customers of the
organization’s services and to persuade them to continue using or to try using these services.
Product/Service Life Cycles
Like people, products and services have a life cycle. The term product life cycle refers to the
stages that a product or service goes through from the time it is introduced until it is taken
off the market or “dies.” The stages of the product life cycle, illustrated in Figure 10.1, usually
include the following descriptions:
• Introduction—The stage of researching, developing, and launching the product or
service.
• Growth—The stage when revenues are increasing at a fast rate.
• M.
10 Customer Acquisition and Relationship ManagementDmitry .docxtrippettjettie
10 Customer Acquisition and Relationship Management
Dmitry Kalinovsky/iStock/Thinkstock
Patronage by loyal customers yields 65 percent of a typical business’ volume.
—American Management Association
Learning Objectives
After reading this chapter, you should be able to do the following:
• Identify how organizational growth is best achieved by an HCO, and state the effect of the product life cycle
on an organization’s revenues.
• Discuss several approaches that an HCO can use to attract new customers, or patients.
• Delineate the premises upon which customer relationship management is based.
• Explain the advantages of database marketing, and identify ways for an organization to use a marketing
database.
• Provide examples of how an HCO can effectively manage real and virtual customer interactions.
Section 10.1Organizational Growth
Introduction
This chapter focuses on how to attract and keep patients through understanding and meeting
their needs. The long-term success of an HCO depends on its ability to attract new patients
and turn them into loyal customers who not only return for needed services, but recommend
the HCO’s services to others. This is especially important because of the nature of the life cycle
for products and services, from their introduction to their decline. Attracting new customers
and keeping existing ones involves interacting internally and externally with patients, analyz-
ing data on current patients, and managing real and virtual interactions with patients. Manag-
ing relationships with patients helps to ensure that patients stay informed and feel connected
to the HCO through its internal and external customer relationship efforts.
10.1 Organizational Growth
Most organizations have growth as a basic goal. Growth means an increase in revenue and
a greater impact on the communities served. Growth also creates opportunities for staff to
advance and take on new responsibilities. While many activities can help an HCO grow, the
most important is the development of an effective marketing plan to provide a consistent
platform for the organization’s visibility and to brand the HCO as an attractive option for
medical services. The development of an effective marketing plan was stressed in Chapter 8
as a basic marketing need for an HCO: that is, to inform new and existing customers of the
organization’s services and to persuade them to continue using or to try using these services.
Product/Service Life Cycles
Like people, products and services have a life cycle. The term product life cycle refers to the
stages that a product or service goes through from the time it is introduced until it is taken
off the market or “dies.” The stages of the product life cycle, illustrated in Figure 10.1, usually
include the following descriptions:
• Introduction—The stage of researching, developing, and launching the product or
service.
• Growth—The stage when revenues are increasing at a fast rate.
• M.
The Regulatory Landscape for Advertisers, Affiliates, NetworksAffiliate Summit
The FTC and state AGs are aggressively attacking affiliate networks. Anyone in the chain-advertiser, network, affiliate-could be liable. Learn how to avoid a regulatory attack against you!
Experience level: Beginner, Intermediate
Target audience: Affiliates/Publishers, Merchants/Advertisers, Networks
Niche/vertical: Legal
Brian Clark, CEO, Copyblogger Media (Twitter @copyblogger) (Moderator)
Thomas Cohn, Of Counsel, Venable LLP
Dean Graybill, Assistant Regional Director, Western Region – San Francisco, Federal Trade Commission
William Rothbard, Attorney, Law Offices of William I. Rothbard
Law Enforcement Risks for Advertisers, Affiliates, NetworksAffiliate Summit
We will explore recent state/federal actions, assess legal exposure risks to advertisers, affiliates and networks, and discuss best practices for avoiding and dealing with unwanted regulatory scrutiny.
The Difference Between Intended Use, Indications for Use, and Instructions fo...EMMAIntl
No matter what your product is, at some point in your regulatory journey you will need to appropriately determine your product’s intended use, indications for use, and instructions for use. For most people, these three items sound like they should mean the same thing, but for the FDA, they are all different. Your company must use these terms correctly because incorrect use of them could lead to issues with the FDA granting your device approval or clearance...
Guidelines for Endorsements and Testimonials in Advertising (2009)Daniel Honigman
On Monday, October 5, 2009, the Federal Trade Commission released its revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” — the first time these guidelines have been changed since 1980. A lot has changed in the public relations landscape since then, and many of these changes have stemmed from how consumers are using information they find on the Internet.
Guides Concerning the Use of
Endorsements and Testimonials in Advertising.
The Federal Trade Commission (“FTC” or “Commission”) is adopting revised
Guides Concerning the Use of Endorsements and Testimonials in Advertising (“the Guides”).
The revised Guides include additional changes not incorporated in the proposed revisions
published for public comment in November 2008
10 Customer Acquisition and Relationship ManagementDmitry .docxchristiandean12115
10 Customer Acquisition and Relationship Management
Dmitry Kalinovsky/iStock/Thinkstock
Patronage by loyal customers yields 65 percent of a typical business’ volume.
—American Management Association
Learning Objectives
After reading this chapter, you should be able to do the following:
• Identify how organizational growth is best achieved by an HCO, and state the effect of the product life cycle
on an organization’s revenues.
• Discuss several approaches that an HCO can use to attract new customers, or patients.
• Delineate the premises upon which customer relationship management is based.
• Explain the advantages of database marketing, and identify ways for an organization to use a marketing
database.
• Provide examples of how an HCO can effectively manage real and virtual customer interactions.
Section 10.1Organizational Growth
Introduction
This chapter focuses on how to attract and keep patients through understanding and meeting
their needs. The long-term success of an HCO depends on its ability to attract new patients
and turn them into loyal customers who not only return for needed services, but recommend
the HCO’s services to others. This is especially important because of the nature of the life cycle
for products and services, from their introduction to their decline. Attracting new customers
and keeping existing ones involves interacting internally and externally with patients, analyz-
ing data on current patients, and managing real and virtual interactions with patients. Manag-
ing relationships with patients helps to ensure that patients stay informed and feel connected
to the HCO through its internal and external customer relationship efforts.
10.1 Organizational Growth
Most organizations have growth as a basic goal. Growth means an increase in revenue and
a greater impact on the communities served. Growth also creates opportunities for staff to
advance and take on new responsibilities. While many activities can help an HCO grow, the
most important is the development of an effective marketing plan to provide a consistent
platform for the organization’s visibility and to brand the HCO as an attractive option for
medical services. The development of an effective marketing plan was stressed in Chapter 8
as a basic marketing need for an HCO: that is, to inform new and existing customers of the
organization’s services and to persuade them to continue using or to try using these services.
Product/Service Life Cycles
Like people, products and services have a life cycle. The term product life cycle refers to the
stages that a product or service goes through from the time it is introduced until it is taken
off the market or “dies.” The stages of the product life cycle, illustrated in Figure 10.1, usually
include the following descriptions:
• Introduction—The stage of researching, developing, and launching the product or
service.
• Growth—The stage when revenues are increasing at a fast rate.
• M.
10 Customer Acquisition and Relationship ManagementDmitry .docxtrippettjettie
10 Customer Acquisition and Relationship Management
Dmitry Kalinovsky/iStock/Thinkstock
Patronage by loyal customers yields 65 percent of a typical business’ volume.
—American Management Association
Learning Objectives
After reading this chapter, you should be able to do the following:
• Identify how organizational growth is best achieved by an HCO, and state the effect of the product life cycle
on an organization’s revenues.
• Discuss several approaches that an HCO can use to attract new customers, or patients.
• Delineate the premises upon which customer relationship management is based.
• Explain the advantages of database marketing, and identify ways for an organization to use a marketing
database.
• Provide examples of how an HCO can effectively manage real and virtual customer interactions.
Section 10.1Organizational Growth
Introduction
This chapter focuses on how to attract and keep patients through understanding and meeting
their needs. The long-term success of an HCO depends on its ability to attract new patients
and turn them into loyal customers who not only return for needed services, but recommend
the HCO’s services to others. This is especially important because of the nature of the life cycle
for products and services, from their introduction to their decline. Attracting new customers
and keeping existing ones involves interacting internally and externally with patients, analyz-
ing data on current patients, and managing real and virtual interactions with patients. Manag-
ing relationships with patients helps to ensure that patients stay informed and feel connected
to the HCO through its internal and external customer relationship efforts.
10.1 Organizational Growth
Most organizations have growth as a basic goal. Growth means an increase in revenue and
a greater impact on the communities served. Growth also creates opportunities for staff to
advance and take on new responsibilities. While many activities can help an HCO grow, the
most important is the development of an effective marketing plan to provide a consistent
platform for the organization’s visibility and to brand the HCO as an attractive option for
medical services. The development of an effective marketing plan was stressed in Chapter 8
as a basic marketing need for an HCO: that is, to inform new and existing customers of the
organization’s services and to persuade them to continue using or to try using these services.
Product/Service Life Cycles
Like people, products and services have a life cycle. The term product life cycle refers to the
stages that a product or service goes through from the time it is introduced until it is taken
off the market or “dies.” The stages of the product life cycle, illustrated in Figure 10.1, usually
include the following descriptions:
• Introduction—The stage of researching, developing, and launching the product or
service.
• Growth—The stage when revenues are increasing at a fast rate.
• M.
The Regulatory Landscape for Advertisers, Affiliates, NetworksAffiliate Summit
The FTC and state AGs are aggressively attacking affiliate networks. Anyone in the chain-advertiser, network, affiliate-could be liable. Learn how to avoid a regulatory attack against you!
Experience level: Beginner, Intermediate
Target audience: Affiliates/Publishers, Merchants/Advertisers, Networks
Niche/vertical: Legal
Brian Clark, CEO, Copyblogger Media (Twitter @copyblogger) (Moderator)
Thomas Cohn, Of Counsel, Venable LLP
Dean Graybill, Assistant Regional Director, Western Region – San Francisco, Federal Trade Commission
William Rothbard, Attorney, Law Offices of William I. Rothbard
Law Enforcement Risks for Advertisers, Affiliates, NetworksAffiliate Summit
We will explore recent state/federal actions, assess legal exposure risks to advertisers, affiliates and networks, and discuss best practices for avoiding and dealing with unwanted regulatory scrutiny.
The Difference Between Intended Use, Indications for Use, and Instructions fo...EMMAIntl
No matter what your product is, at some point in your regulatory journey you will need to appropriately determine your product’s intended use, indications for use, and instructions for use. For most people, these three items sound like they should mean the same thing, but for the FDA, they are all different. Your company must use these terms correctly because incorrect use of them could lead to issues with the FDA granting your device approval or clearance...
In recognition of foot health month, the status of tea tree oil as an antimicrobial agent is reviewed. Tea tree oil shows great promise as an antifungal and antibacterial product. This includes topical infections of foot and toe nails.
The Value of Conducting Post-Marketing Clinical Research On Marketing Strategy Development
Nutraceutical Medical Research, LLC
By: Latesha Richards, Marketing Coordinator
Marketing Opinion Blog Ftc Guides On Endorsements & Testimonials Oct 2009
1. NMR News: Volume 2, Issue 7, October 2009
MARKETING OPINION BLOG
FTC AND ITS REVISED GUIDES GOVERNING ENDORSEMENTS &
TESTIMONIALS:
MORE REASONS TO DO CLINICAL RESEARCH
By: Latesha Richards, Marketing Coordinator
October 12, 2009
No one disagrees with the industry-wide practice of using a well-known face, personality
or a positive experience to market your brands, not even the Federal Trade Commission (FTC).
But some companies have gone too far in deceiving consumers with false or misleading claims.
In our most recently published article posted on Nutraceuticals World titled “Proprietary
Research – Bringing Nutraceuticals to the Next Level: Conducting product- or ingredient-
specific research is crucial to the long term success of this market, we discuss that too many
companies resort to the sole use of third party data to make claims for their proprietary products
or ingredients, and that this data, most of the time does not specifically address the product. In
clarifying and finalizing some previously open-ended and vague advertising guidelines regarding
expert and consumer endorsements, the FTC took a huge step on October 6, 2009, toward
cracking down on bad industry habits when using third party material.
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2. NMR News: Volume 2, Issue 7, October 2009
Under the new FTC guidelines, well-known practices of recruiting celebrities, expert
doctors and consumers to endorse brands will receive much more scrutiny than ever before.
Many well known brands that have used to these advertising techniques seen routinely in TV and
magazine ads will continue to be governed by these new amendments, but ANY brand that uses
these practices in any form of advertisement whether it be internet, print, TV and other newer
forms of media including consumer blogs, word-of-mouth or network marketing, social media,
etc are now subject to governance. Dietary supplements are not omitted from these new
guidelines as they are in fact marketed through some of these non-traditional channels and often
utilize medical experts or consumer endorsements/testimonials. In this article, we will discuss
FTC’s revisions made to using consumer endorsements as it pertains to dietary supplements.
Consumer Endorsements/Testimonials
A major change in the FTC guides has to do with the use of consumer endorsements.
Let’s take a look at Section 255.2 in the 1980 version of the Guide:
[Guide 1]
[45 FR 3872, Jan. 18, 1980]
§255.2 Consumer endorsements.
(a) An advertisement employing an endorsement reflecting the experience of an
individual or a group of consumers on a central or key attribute of the product
or service will be interpreted as representing that the endorser's experience is
representative of what consumers will generally achieve with the advertised
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3. NMR News: Volume 2, Issue 7, October 2009
product in actual, albeit variable, conditions of use. Therefore, unless the
advertiser possesses and relies upon adequate substantiation for this
representation, the advertisement should either clearly and conspicuously
disclose what the generally expected performance would be in the depicted
circumstances or clearly and conspicuously disclose the limited applicability
of the endorser's experience to what consumers may generally expect to
achieve.1
Let’s now look at the revised 2009 Guides (key changes are bolded and emphasized).
§255.2 Consumer endorsements.
(a) An advertisement containing an endorsement relating the experience of one
or more consumers on a central or key attribute of the product or service also
will likely be interpreted as representing that the endorser’s experience is
representative of what consumers will generally achieve with the advertised
product or service in actual, albeit variable, conditions of use. Therefore, an
advertiser SHOULD possess and rely upon adequate substantiation for
this representation. IF the advertiser DOES NOT have substantiation
that the endorser’s experience is representative of what consumers will
generally achieve, the advertisement should clearly and conspicuously
disclose the generally expected performance in the depicted
circumstances, AND the advertiser MUST possess and rely on adequate
substantiation for that representation.2
As you may have noticed, the FTC has now put a huge emphasis on substantiation in the
revised guidelines. While the phrase “an advertiser should possess and rely upon” doesn’t imply
a necessity, it doesn’t do away with the significance of basing a testimonial on a substantiated
claim. The FTC has essentially made it clear that having competent and reliable substantiation
for ANY representation of a key product attribute endorsed by a consumer is highly expected,
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4. NMR News: Volume 2, Issue 7, October 2009
despite whether the endorsement represents a “generally achieved” outcome or a “generally
expected” one. The phrase “generally achieved” can be interpreted to mean the outcome that is
conveyed by the testimonial to be representative of what the general population will experience;
and “generally expected” is the outcome that has been tested and proven in research to be the
expected outcome after taking the product. According to the revised language, if no
substantiation can be provided for a “generally achieved” outcome, advertisers must satisfy both
requirements of using a disclaimer and providing substantiation to support the “generally
expected” outcome claim.
The sole use of “Results not Typical” disclaimer to justify any atypical product results
has been taken away. The FTC essentially believes that using anecdotal evidence based on a
testimonial or endorsement that conveys a particular consumer’s experience after taking a
product that does not represent what the generally achieved outcome would be insufficient to
substantiate a claim and would be deceptive. The new guides seem to suggest that what the
consumer says about the product is given as much weight as the integrity of the claim made
without an endorser.
Some argue, rightfully so, that a “generally achieved” or “generally expected” outcome is
inapplicable for dietary supplements, specifically weight loss supplements because there are
differences in physiology and compliance to a regimen among individuals, and so it would be
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5. NMR News: Volume 2, Issue 7, October 2009
difficult to ascertain what “generally achieved” or “generally expected” would look like.3
Therefore a “generally expected” disclosure and substantiation would always be necessary. The
FTC makes clear that from “valid, well-controlled clinical studies of patients matching the
profile of the persons in the ad…” generally expected performances of the product could either
be statistically averaged or extrapolated from the data, “even though consumers’ real world
results are not likely to match exactly the results in the clinical study.”4 Advertisers must
therefore engage in clinical research and analyze the data before crafting a disclosure statement,
or not use the testimonial at all.
There are some cases where false and misleading statements by consumers can be
detrimental for companies. For example, in April 2009, the defendants (the owners of RTC
Research & Development) in the case involving Xenadrine EFX, a weight loss dietary
supplement, had to pay $8M in compensatory damages to consumers who were deceived from
statements made by consumer testimonials. The product was “marketed as being clinically
proven to cause rapid and substantial weight loss and was said to be more effective than
ephedrine-based supplements…” The defendants were guilty of “false and unsubstantiated
advertising.”5 The ruling does not specifically mention what the consumer testimonials said, but
we can make an educated assumption that because the claims were unsubstantiated, the
testimonials were also unsubstantiated and there was no disclosure. Under these new guidelines,
5
6. NMR News: Volume 2, Issue 7, October 2009
companies must make sure that they can provide substantiation for ANY testimonial that is
made.
In early 2007, the marketers of TrimSpa were also ordered to pay a $1.5 million
settlement fine for unsubstantiated claims of rapid weight loss, particularly from false
consumer/celebrity testimonials (from Anna Nicole Smith) which claimed weight loss of 69 lbs
in less than nine months. FTC found that the company had inadequate scientific evidence to
support their claims that TrimSpa caused rapid and substantial weight loss via its active
ingredient, Hoodia gordonii, which is an appetite suppressant.6
Conclusion
Tighter measures to FTC guidelines have indeed made it increasingly risky for companies
in any industry to make unsubstantiated statements about a product through consumer or expert
endorsements. Dietary supplements are by no means omitted from these measures.
As of December 1, 2009 when the FTCs new guides on endorsement and testimonial
substantiation go into effect, we can move forward with the process of re-establishing credibility
in our advertising. What does this mean for the natural products industry going forward? This
means two things: 1. we as industry professionals are now challenged to be more proactive in
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7. NMR News: Volume 2, Issue 7, October 2009
providing “competent and reliable substantiation” at the start of the process than reactive when
things seemingly go wrong. We owe presenting factual information on product labels to
consumers, not to the FTC or the FDA; and, 2. Natural product consumers can look to trust the
statements and claims they hear and see. This is something we can all look forward to.
The FTC has made it crystal clear that it is in the business of enforcing truth-in-
advertising and protecting consumers. So, there’s an even greater burden for supplement
companies to provide proof for their products. Now is the time to form a long-term partnership
with a competent contract research organization that can help your company substantiate claims
and craft your marketing messages and claims to meet the new FTC and FDA’s guidelines. We
recommend randomized, double-blind placebo-controlled studies for a novel, combination or
single ingredient, as the gold standard, but we endorse an appropriate in vivo model that can
sufficiently test your product attributes, if the former model is not desired.
Before attempting to use a medical expert or consumer endorsement in your advertising,
be sure to have the most appropriate scientific and clinical evidence to substantiate the
endorsement. This will certainly save your company from headaches and worse, potentially
costly liabilities in the long haul.
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8. NMR News: Volume 2, Issue 7, October 2009
About NMR: Nutraceutical Medical Research, LLC is a premier contract research organization
dedicated to substantiating your product’s claims with clinical research. Our medical writing
services include journal publication, brochures and review papers. Our goal is to partner with
companies to help them establish the efficacy and safety of their products using an evidence-
based approach.
To access the revised guides, go to
http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
REFERENCES
1. The FTC Guides Concerning Use of Endorsements and Testimonials in Advertising. Accessed on October
8, 2009 at: http://www.ftc.gov/bcp/guides/endorse.htm
2. Federal Trade Commission – 16 CFR Part 255 – Guides Concerning the Use of Endorsements and
Testimonials in Advertising. Accessed on October 8, 2009 at:
http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
3. Federal Trade Commission – 16 CFR Part 255 – Guides Concerning the Use of Endorsements and
Testimonials in Advertising. Accessed on October 8, 2009 at:
http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
4. The FTC Guides Concerning Use of Endorsements and Testimonials in Advertising. Accessed on October
8, 2009 at: http://www.ftc.gov/bcp/guides/endorse.htm
5. FTC Concludes Case Against Marketers of Xenadrine EFX; Court Ruling Requires Final Defendant to
Accept Settlement Terms. Accessed on October 8, 2009 at:
http://www.ftc.gov/opa/2009/04/xenadrine.shtm
6. Federal Trade Commission Reaches “New Year’s” Resolutions with Four Major Weight-Control Pill
Marketers. Accessed on October 13, 2009 at http://www.ftc.gov/opa/2007/01/weightloss.shtm
8