What You Should Know About Investment Testimonials
Is There Any Truth to Product or Service Testimonials?
Have you ever wondered how much sincerity there is to the many testimonials we see in the internet?
Are testimonials really sent in by satisfied customers or pure fabrications by web site owners?
Are testimonials written and sent voluntarily by satisfied clients or solicited by internet sites in exchange for benefits and favors to the sender?
In all fairness I would say many testimonials are submitted with much sincerity from well meaning, satisfied clients. The problem is we only see the good testimonials. Nothing is ever put out about the negative experiences of customers.
I would also hasten to add that of the many glowing tributes we see all over the web many are dubious originations of the website owner.
I am one who views testimonials with much skepticism and would never buy a product based on a favorable endorsement by someone I don’t know personally. I am not swayed even by endorsements of famous personalities. Are they believable?
Come on now. We all know famous people are paid great sums of money to endorse products and services that many of them don’t even use. Some hardly know the product at all, yet they endorse it solely for the money that comes with the endorsement.
The Worse of the Lot
With respect to product testimonials on the internet the worst of the lot may be from web sites peddling high yield investment systems and stock options trading strategies. These websites are perhaps the most deceiving and they put out the most exaggerated testimonials. I have no doubt in my mind there are far more negative remarks, comments and complaints sent by dissatisfied customers to internet investment websites than there are positive ones. Of course we never get to see the unfavorable comments as no web site owner would dare publish these.
Let’s look at what really happens. Let’s say there is a company that sells a computer software program that claims to enable a person to trade stocks with guaranteed results. Let’s call the product Widget Stock Trading software, developed and marketed by the Widget Investment Company.
The software sells for say, $49.99. In its web site Widget makes outrageous claims about how great the program is to the point of grossly exaggerating the actual merits of the product. To be sure, they go on to say that it is so extremely user-friendly as to enable the user to learn it in a very short time thus enabling you, the buyer, to immediately start trading stocks profitably shortly after receiving the product.
Among their overstatements Widget claims that in a very short period of time you will be able to trade stocks so profitably that you can leave your day job. You can go on semi-retirement doing nothing but trade stocks in your spare time using the Widget Stock Trading software.
In addition to all the exaggerated claims on the site Widget inserts testimonials from satisfied customers who supposedly are already reaping great profits from stock trading using the Widget software.
Samples of Exaggerated Testimonials
If you are among the gullible ones you could very easily be persuaded by these glowing endorsements and go on to order the Widget software.
Lo and behold, after you buy the product you discover it is not what you had in mind and nowhere near close to what they claim to be an easy to learn software. Totally disappointed you either ask for the money-back guarantee (which is almost always offered) or just lick your wounded pride and do nothing.
Cost of Money Back Guarantee is Already Priced In
While the majority of these types of products carry unconditional money back guarantees, statistics show that most dissatisfied buyers don’t bother to ask for refunds. This is especially true with goods and services that sell for under $50 such as Widget’s $49.99 product.
This is the reason Widget priced its product at $49.99. Marketing statistics show that this is not a pain level for investors who would rather lose the money than admit they have been taken.
The Widget Investment Company knows fully well that for every ten Widgets sold, three, four or even half of the customers will ask for refunds while the rest will not. The cost of refunds is already factored in the product’s price.
Many buyers, despite their disappointment, will strive to learn the product even though it is not what they anticipated it to be just to try and recover their money’s worth. Meanwhile the Widget Company has achieved its goal of selling the product and taking your money. Whether you are satisfied or not is not their concern. They have already gotten your money and that is their ultimate objective.
To be fair, a few clients will be successful after a lot of hard work and these are the ones that may in fact send in a good word about the product. This may be one in one hundred or one in a thousand. We don’t know as there are no statistics on this.
A True Case History
Here is a true case history from the files of the Securities and Exchange Commission. One particular company web site (name withheld for anonymity) that sells an automatic trading service on stock options was cited for gross violations of the truth in advertising act. The company claimed that their trading system when linked to a stock broker’s service (which they recommend online) using the Widget software will automatically initiate options trades for the owner. The owner/investor need not do any actual trades as these were automatically done by the assigned broker.
Among the many falsehoods on their site the company had a long list of endorsements and testimonials from supposedly happy users of its services. I took a close look at the company and made my own investigations.
The Securities and Exchange Commission had filed a lawsuit against the company for fraudulent claims on their services and products. In its lawsuit the SEC states that of more than 1200 customers in its client roster countless investors lost great sums of money using the vendor’s services. The SEC initiated its lawsuit in response to numerous investor complaints against the website owner.
Do Your Own Due Diligence
So how is it possible that this company had such a long list of testimonials from happy customers? Common sense tells us that these are either fabricated by the vendor or solicited in exchange for favors, or just a compilation of a few satisfied customers from thousands of unhappy ones.
So what is one to do when a vendor makes outrageous claims and shows excellent testimonials on its website?
Honestly? Not much, except to use your judgment and your common sense in evaluating the merits of the claims being made by the vendor. Do your own due diligence on the company and find out more about them. The general rule as always is: “if it’s too good to be true, it’s most likely just that and best to stay away from it”.
If the testimonials are too good to be true, it’s most likely just that and best to stay away from the product or service
Some sites do lend credibility to their claims by showing some factual evidence supporting their statements of success and these are the ones that merit a closer look.
I once had a web site where I sold an instructional e-book I had written on how to use a system of trading stock options that rendered a consistent profit to the user. This trading system (which I still use today) could be very profitable to someone who has some knowledge and moderate skill in options trading.
It was not for everyone and I said so in my website. It was not my intent to mislead readers with wild unsupported statements of success. Following my thinking on testimonials I made it a point not to include a single testimonial about my e-book although I can say I had received many good comments from satisfied customers.
Actual Product Performance Speaks the Truth
Rather than boast of success stories from clients I showed actual trading results on the site. Prior to customers buying my e-book they could actually see and follow the trades that led to the trading results shown on the website. And I mentioned this fact on the site to prospective clients before they decided to order the e-book.
I believed this was the best method of actually showing my clientele that my claims were not empty promises. They could see actual evidence on my website supporting my trading results before they ordered the e-book.
This is the kind of backup support that website visitors should look for when evaluating the merits of an internet investment product or service.
Don’t pay attention to testimonials from supposedly satisfied and successful clients. These mean nothing if not supported by concrete evidence of the merits of the product/service being offered. These testimonials may have come from very few out of thousands of dissatisfied many as demonstrated by the SEC case against that options trader.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2018 Daniel Mollat