The new FTC regs (USA) prohibit this:

Lulu stands on stage and says to the audience (of prospects),
“I made $10,000 last month with this business!”

Even if it’s true, she cannot say it there – unless she can prove
her income is typical for others in the company.
Do you think most others in her company earn that?

That’s why the FTC regs have stopped allowing that kind of
testimonial. Because it implies that Lulu’s income is typical,
and it’s not.

Here’s a way that Claude Hopkins made public promises,
and sold millions in products.  You can do this too (for products
or income claims.) But note the twist at the end of his promo.
This was an ad for a cough syrup:

Blah Blah Cough Remedy
“If it brings the results we promise, it is
worth many times its cost. If it fails, it is free.”

Mr. Hopkins writes, “Others made claims
and promises (and gave testimonials) but we
offered certainty. And we secured most of the
trade.

If you want to dangle results – either product or business –
in front of prospects to persuade them to come in,
you can do the same thing.

Let’s try a sample recruiter income pitch:

“If I can show you a way to make $5,000/mo
part time, would you be interested?”

OR

“If I can make $5,000/mo you can too!”

These are implied promises.  If you’re willing to guarantee
those results like Mr. Hopkins did, you could maybe get away
with it (FTC-wise). And you might get a lot of big package orders.

Let’s say you suggest the big package to Millie,
say $1500. You also sell her a leads program for $500.
Here’s a version of that Claude Hopkins guarantee:

“Millie, If you make the income I have stated,
($5000/mo part time) the cost of the big package
($1500) and leads ($500) is worth many times its cost.

(Who would not agree?) AND:

“If you do not make the $5,000/mo, everything is free.
I will refund the $1500 and the $500 for leads.
And you keep the product and the leads.”

If you, the person making the income promise, are
ready to make that kind of guarantee and stick to it
like Claude Hopkins’ druggists (who sold the cough
remedy) did, I suspect you would not have trouble
with the FTC. You’d also get a lot of orders.

Thing is, would you do it? Would you offer that
certainty like Hopkins did – or everything they
bought is free?

Question: If you were to make that guarantee, what would
you add to your list of requirements for the new recruit?
I mean besides buying the package and leads, what else
would you ask them to do?

PS Claude Hopkins writes about his ad + guarantee,
“No cough remedy on the market
could compete with that.  Others made claims
and promises (and gave testimonials) but we
offered certainty. And we secured most of the
trade.My Life in Advertising, Claude Hopkins.

2017-06-08T11:38:01+00:00

12 Comments

  1. TheoCoach February 16th, 2012 at 10:57 pm - Reply

    Kim,

    We had a similar guarantee in our team. We provided this guarantee not to prospects but to our new distributors. After a first steps training series we did, we promoted buying a product package of about 500 euros.

    The promise was, that if they bought these products and did, with our help, 2 in home presentation in the next week, they would sell all of them. And whatever products they didn’t sell, we would buy them back ourselves. Selling 500 euros worth of products in 2 inhomes was not that difficult and if they did it in their fist week in the business, they could have 200-300 euros profit (not bad). And if they didn’t sell anything, WE (not the company) would buy their products back.

    What do you think? Is this a good promise/guarantee? (btw it worked really good)

    Theodore from Greece

    • Kim Klaver February 16th, 2012 at 11:47 pm - Reply

      Sounds great! Since you said it worked very well, that’s all that
      matters. So do it again. Many new networkers have no one to go with
      them to do in-homes, much less guarantee product sales like you did. Way to go, Theodore from Greece!!

  2. Tiat February 17th, 2012 at 1:26 am - Reply

    I’m not too familiar with the FTC rule in States. Can we do the same for products? For example, “If you are able to get relief for your joint pains, like I did, the cost of the full pack is worth many times its cost!”

    • Kim Klaver February 17th, 2012 at 1:30 am - Reply

      Tiat,

      Yes you can say that – but only if you offer the guarantee also.
      Namely, if it does not do it, it is free.

      Mr Hopkins’ example was with a product, see end of post.

      🙂

  3. Just another reader February 17th, 2012 at 2:22 am - Reply

    According to the direct sales association, (www.dsa.org) any direct sales/network marketing company in good member standing has to abide by their ethics code and one of them is making available the consumer protection of a 12 month money back return guarantee on resaleable product purchased by the new franchise owners/distributors, as well as any marketing materials purchased, less a 10% restock fee. The company requires the business owner’s resignation to get their money back, but it’s there.

    Know too that though the company refunds their product purchase, they’ll also be taking back the payout you received on that ‘executive’ package for $1500. So there’s no more slam, bam, thank you maa’m without risking the loss of the commission.

    • Kim Klaver February 17th, 2012 at 9:44 am - Reply

      To another reader,

      Thanks. Most companies in the USA, DSA or not, have some kind of money-back guarantee. But 1) It’s a hassle to get it back for a new distributor, 2) the guarantee is not tied to any income promises that the recruiter made to entice the person to buy the big package, and 3) a “money back guarantee” doesn’t ring the same as:
      “It works like we say or it’s free.” Or, “you earn what I said, or everything is free.” It worked for Hopkins because there was no downside. If MLMers had to offer such guarantees when they offer easy money, most would would stop making the big money promises to get people in. A good thing. Think?

  4. Kerry February 17th, 2012 at 3:12 am - Reply

    Hey Kim, that is the promise that got me started 31 years ago. I was told that I could use these products for 30 days, and if I didn’t feel better, I would get my money back.
    We have been getting money back from this company EVERY month for 31 years now, and a lot more money than I have invested.
    Oh, yes, and amazing health too – what a bonus – Health AND wealth!
    ps Like Theodore, we would also guarantee results if they followed our business process, and we too do it “with them” until they can do it on their own.

  5. Ted Davis February 17th, 2012 at 7:18 am - Reply

    This FTC rule is just our BIG BROTHER trying to take care of us. We have so many laws and regulations telling us what we can and can’t do, that no one could abide by them all. We are not morons. We know that not everyone is going to do what is required to make what someone else is making. This business model involves taking a risk. Anyone that gets into this because they get their money back, is most likely not going to do anything. They will not be totally invested it. And will fail.
    This is like saying to someone that if they take a job with a company they are guaranteed to be successful and climb up the company ladder. If they don’t the company will give them back any and all expenses they incurred getting to and from the job, etc. Then the person just shows up and doesn’t do any work. Dumb. Dumb.
    I chose to not tell prospects what I make. I tell them this is the compensation plan and it shows what can be made. What you make will depend upon what you do. Some people make millions others make very little. I can show you what to do to be successful. Then it’s up to you to do it. If they ask what I’m making, I tell them what I make is irrelevant. There have been people who brought someone into the business and that person made millions, while the one who brought them in did little and made little and quit. You have to decide what kind of person you are. The millionaire or the quitter or someone in between.
    Regarding my product: I promote a nutrient dense food product. I can tell you what it did for me and ask if you want to try it to see if it works for you. The only guarantee I can make is that my product will give you more good nutrition. The body thrives on good nutrition and uses it to heal and maintain itself. That’s it.
    People might not like this approach, but they will respect that you are truthful with them.

    • James February 17th, 2012 at 7:32 am - Reply

      @Ted: isn’t that the truth?!

    • Simona February 18th, 2012 at 8:30 am - Reply

      Love it!

  6. Dani Walker February 17th, 2012 at 6:02 pm - Reply

    Excellent idea and one that I will be implementing and getting back to you as to the results. Both for product and for business. Thanks again.

  7. Paul Eilers February 18th, 2012 at 3:43 pm - Reply

    I don’t talk to people about making money, but rather, about my product. So I never run into this issue.

    I don’t believe that convincing or persuading works. It actually causes resistance in a prospect.

    I use a simple script, that allows me to find the right ones for whom my product is a good fit. If I do not call their name, I quickly and politely move on.

    Thank you, Kim Klaver, for your Orange Book.

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