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THIS WEEK
Will the ACCC Shred Your Marketing?
ALSO IN THIS EDITION
| Small Business - Will the ACCC Shred Your Marketing? |
This week is the first of a two-part series about ensuring you comply with the Trade Practices Act with your marketing. Originally I was going to start with the new Green Guidelines from the ACCC, until one of my clients made me realise that many businesses don't understand the role the ACCC plays.
Most people in Australia have heard of the ACCC, but many businesses don’t understand the role it plays in monitoring ads and marketing. The ACCC is one of the most powerful government agencies in Australia, designed to ensure fair business practices exist through the Trade Practices Act. That’s great you say – but what does it have to do with your business? Lots!
The ACCC of recent times is very aggressive in taking businesses to court. Here is just a sample of cases from January–March 2008.
- False testimonials – testimonials were made up and not provided by clients by one company.
- Resale price maintenance – where a company made sure dealers of its products did not sell its products for less than 10% of RRP.
- Overinflated photos – packaging was taken to task by the ACCC for some fruit bars they considered misrepresented the amount of fruit in the bars.
- Insufficient labelling – inadequate care instructions on medical sheepskins.
- Price representation – the company listed prices as was/now. The product was not available for sale at the higher price immediately before the sale and so fell foul of the law.
- Potential returns – one company used the returns from some participants in their advertising. This was judged as a not typical return by the “average person on the street” and the company was forced to withdraw all advertising.
With all of these cases substantial fines were also levied.
 Some of the higher profile cases in recent years include matters relating to Guarantees through Flight Centre. Until recent times Flight Centre’s tagline was “lowest airfare prices guaranteed”. With the advent of online bookings this guarantee could not be enforced, so Flight Centre was required to change its tagline on all of its shops, marketing materials, and websites.
Some other interesting cases involved some property investment seminars, where the marketing suggested ordinary people could be turned into millionaires if they followed the particular system. The courts found that the average person on the street was not guaranteed of success and there was no proof that the systems worked. Substantial fines were levied.
All of these cases could be you and your business. Are you currently complying with the ACCC requirements?
How do you comply with ACCC rulings in your marketing and advertising?
You cannot make false and misleading claims which can include lying, leading people to a wrong conclusion, creating a false impression, leaving out important information, making false or inaccurate claims. It doesn’t matter if you didn’t intend to mislead – the result is what counts. As you can see by many of the cases above, it is very easy to cross the line into false and misleading claims without meaning to.
The things that are considered by the ACC C when looking at if something is misleading includes overall impression, potential audience and intent. This is a quite tricky area as it includes considering what the most susceptible members of the audience may react to the marketing as well considering the wider potential audience beyond your target audience.
You can’t argue that your client base is educated and they know what you mean – if there is even a hint that someone may be more susceptible than your regular client base or that your promotion can be seen by other people, you have to be doubly careful.
Things to take into consideration:
- You must have reasonable grounds when predicting a future event or result (and be able to prove it!)
- You must not mislead or deceive
- You must not misrepresent the goods or services such as price, place or origin etc
- You must not mislead people about the characteristics, suitability or quantity of services (this one makes me question all those internet marketers with permanent 10 only signs on their websites)
- You must not force people to buy a product or service from a different business before they can buy from you (this can be a problem if you do a Joint Venture with someone else)
But what about fine print? 
Some businesses try and get around potential problems by writing in disclaimers, limitations or conditions apply. The bad news is the fine print may not be enough to save you from breaching the Act. The stronger your claims, the less likely the fine print will save you, particularly if the fine print is too small or in an obscure place. If you use a disclaimer, put it on a relatively major page to reduce the risks to your business.
Beware comparative ads
If you are going to compare your product to someone else beware. The sort of thing the ACCC looks at is the accuracy of the comparison, whether the products are reasonably similar and if the comparison has remained valid for the term of the promotion. If for example you are comparing on price and your competitor drops their price during your campaign you are suddenly engaged in “misleading conduct”.
Comparative ads are fraught with danger for most small businesses and are generally not worth pursuing in your marketing without strong legal advice from a lawyer versed in Trade Practices law.
What price safety?
The ACCC is particularly interested in pricing. If your ad talks about previous prices – they must have genuinely been available at that price before your promotion. If you are talking about how much something is “worth” then you must have facts to back you up and an educated guess doesn’t cut it with the ACCC.
Green Claims
The ACCC has just released extensive guidelines about making Green or environmental claims about your products. Visit their website for a copy of the guidelines www.accc.gov.au. We will look at these guidelines in more depth in next week's newsletter.
This is a great time to go back over all your brochures, marketing and websites to ensure you are complying with the ACCC legislation. Most small businesses are not likely to meet the ACCC in their day to day trading, but there is always that one chance that you are picked up for special attention.
After helping a client review all of their business promotion and wording after a particularly nasty ACCC matter, I can tell you it is a financially and emotionally draining exercise. It is better to get it right first time.
Call Heart Harmony if you would like to review your marketing material on 0411 295 900.
| HR Tip - Job Ads & The ACCC |
The ACCC also looks closely at job ads. The sort of things they look at are whether or not you have mislead people about the real job on offer.
If you are offering commission based roles, you must specify this in your job ads. If the role is wages plus commission, then this must be specified as well.
In addition the roles must actually exist and be "fairly and fully described".
Finally, your job ads must appear under the right heading or classification in the newspaper.
Treat your job ads as if they are marketing, and ensure you comply with all relevant rules outlined above with the rest of your marketing.
One of my clients is in the set up phase for exporting a brilliant invention overseas. As part of this process we have been sourcing different packaging options for the product, display boxes, shipping boxes etc. We have been dealing with the Cardboard Box Company in Geebung and I have to say I have been impressed.
This is fiddly stuff - with lots of different changes in concepts, designs and possibilities. Our account person has been unfailingly cheerful - delivering great advice, suggestions and dealing with all of the changes to quotes as the concepts develop.
When I was talking with Ken Prowd, the Director, he confessed that his wife hates taking him shopping. Whenever he is in the Supermarket he loves to check out the boxes, find ones they have made and look for new ideas. That is true passion for your job. Ken's passion and love for his work shines through in his service and the advice he gives.
The lesson is - are you that passionate about your business that it shines through in everything you do? If someone can be passionate about cardboard boxes, how can you allow your passion for your business shine through?
In this blog post I look at simple ways you can generate repeat customers for your business.
Are you as Green as you claim you are?
warm regards
Ingrid
Heart Harmony
PS: This week's blog also included posts about mobile phone training, the best work/life companies in the USA as well as a great marketing program being offered in Canada.
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