The State Of
and Online Business
By Maggie Patterson
Table of Contents
My Predictions Came True (Unfortunately!)
Let’s Talk about Ethics: Personal and Business
The Real Problem with Ethical Marketing and Sales in Online Business
It’s Not Different, It’s the Damn Same
Scope of Practice Issues Abound
Bullshit Certifications and Ethical Standards
2022 is rolling to a close, and as I’ve done the last two years, I wanted to check in on the state of online business.
Especially as predictions I’ve made in 2020 and 2021 about ethical marketing and the use of trauma-informed language, along with other market conditions have come true.
As much as I like to be right, this is one case where I wish I wasn’t. Especially when I look at the state of online business today. I’m not even sure what to say sometimes. How I feel about it depends on the day, but it’s the full range of emotions from rage to uncontrollable laughter to downright terror.
On one hand, I’m encouraged by the fact that more and more people are interested in engaging in a conversation about the manipulation, coercion, and cult-like tactics that show up in online business.
I’ve been talking about many of these issues going as far back as 2015, so this conversation getting momentum delights me.
The flip side of this is that I’m acutely aware of the fact that this doesn’t mean that this conversation is anywhere near done. This is just the starting point.
For the last two to three years, I’ve been actively tracking how this industry is evolving, and friends, it’s not good.
Many things have ramped up since the onset of the pandemic in March 2020 including financial abuse, cult-like behavior, and claims of being “ethical” as a way to virtual signal.
Listen Now To This Essay On The BS-Free Service Business Show
Let’s Talk about Ethics: Personal and Business
The conversation around ethical marketing and business is a bit of a minefield as it’s not like we’re all operating from a single set of ethical principles.
The Oxford dictionary definition of ethics is “moral principles that govern a person's behavior or the conducting of an activity.”
When you look at that definition, you can start to see part of the issue. Ethics are personal and we can’t assume everyone has the same set of moral principles guiding them.
Moving beyond personal ethics, let’s look at them in the context of business.
The field of business ethics started in the 1960s, and The Markkula Center for Applied Ethics at Santa Clara University has a great rundown on the history of business ethics. What stood out to me was that corporations were under scrutiny by consumers, which led to widespread consumer laws in the 60s and 70s.
Since that time, there’s been the rise of corporate social responsibility which recognizes that behaving in line with ethical principles such as trust, respect, caring and fairness is good for business.
While I’m not going to pretend this is at all being done perfectly and it’s not performative in capitalism, at least there are both legal guidelines and a shared understanding of what these concepts mean which is sadly lacking in online business.
The distinction being made between something being illegal and unethical is a critical one when it comes to online business. Consumer protection laws typically come into being in response to scandals or tragedies that cause harm, and we simply can’t rely on the law to guide what’s moral or ethical for our business.
This is the exact reason that I’ve committed so much time specifically to consumer education in this market. We’re literally years away from widespread legal protections against predatory and manipulative practices, and real harm is being done every single day.
What About Ethical Marketing?
As someone who’s spent their entire career working in marketing, I’ve become increasingly irritated by the fact that “ethical” marketing has become a thing in online business.
The idea that the status quo of online marketing is “normal” and ethical marketing is the alternative is beyond frustrating to me. While ethical marketing is an actual subset of marketing, I firmly believe this is how marketing should be done, and I’ve spent my entire career doing everything from PR to email marketing based on ethical marketing principles.
That’s not meant to be a flex that I’m some perfectly ethical marketer, but rather that we need to understand that marketing doesn’t have to be manipulative. What we see as “standard” practices in online business are so far from normal, and we need to stop letting concepts such as fairness, honesty, transparency, and respect take a back seat.
When I talk about these concepts in marketing (and sales) for online business, I’m often met with resistance or opposition. This happens for multiple reasons, but one of the biggest ones is that people have been taught (and in some cases indoctrinated) to believe this is the only way to market/sell their offers and that if they don’t do these things, they’ll fail.
Case in point, I’ve had more conversations about practices such as income claims or hidden pricing than I can count. People fully believe that if they don’t make these claims or find ways to handle their potential clients' objections, they won’t be able to market or sell.
I want to stop here and acknowledge that part of the reason that people are resistant to moving away from using these types of practices is that this is the dominant type of marketing and sales in the market.
The other issue at hand is that people are downright fearful that they may not be able to land clients or sell their programs without these tactics. This is understandable as their business is their livelihood, and they want to ensure that they’re not personally or financially impacted.
If you’re resistant or fearful about changing, this is completely valid and normal. But I want you to consider the following.
First, you’re here reading this essay or listening to my podcast. Do I use these tactics? I don’t, and my business is thriving and more importantly, sustainable. There’s a reason I’ve been running my own business for over 17 years, and it’s because I’m excellent at what I do, I treat my clients with respect, and they trust me.
And I’m not alone in this. There are thousands of coaches and service providers out there that are not doing business in this way and are doing awesome. But you don’t know about them necessarily as they’re not flashy or all over your social media making big promises.
The other consideration is that maybe you’re meeting (or exceeding) your goals by using these tactics, but at what cost? Is it worth sacrificing your values? Your client experience? Your reputation?
Most of all, are you okay with actively doing harm to people who are paying you to help them?
The Real Problem with Ethical Marketing and Sales in Online Business
As a label for a way to do business, marketing, or sales in the online space, the word ethical has become empty.
It’s become a buzzword co-opted by business owners that don’t want to end up called out for something they're doing, so they’re giving their business a facelift. A new Instagram bio and calling yourself an “ethical business coach” doesn’t mean it’s true.
Anyone can claim to be ethical.
I’ve been reminded of this while watching season two of the NXIVM docuseries, The Vow. The group’s founder Keith Raniere who’s now serving 120 years in prison referred to himself as the “world’s most ethical man”.
In episode four of this season, they talk about how the organization used ethics as a way to control the members. There’s a quote from the cult’s second-in-command, Nancy Salzman that drives home how ethics can be weaponized against us.
“Everything was so blurred because we thought he was teaching us something we didn’t know about being ethical and living an ethical life, so we committed to something that we thought was real and principled. We did things for him because he convinced us that was what we were doing.”
This may seem like a dramatic example to some of you, but what I’m witnessing in online business has shades of this same level of manipulation. As a policy, I do not name names in my work for a variety of reasons, but there are a few specific things that need to be said as we head into 2023.
Side note on Nancy Salzman: She was the president of NXIVM and has been sentenced to 42 months in prison and a $150,000 fine for racketeering. While she claims she didn’t know about specific activities, she’s done everything possible to lessen the consequences of her actions.
I’m struggling with her being featured so prominently in this season of The Vow, so I debated if I should include this at all in this essay. While it’s a way for her to excuse her unethical actions, it’s a relevant and timely example of how ethics can be turned against us.
What’s happened over the course of 2022 is that many of the leaders in the online business are positioning themselves as “different” from the typical bro marketers we’re used to and co-opted ethical marketing/business in the process.
The way they present themselves and their programs can make it incredibly challenging to see what’s really happening. I’ve explored this in detail in my work on celebrity entrepreneurs, including six archetypes to watch for, as some of the most problematic people in this industry are more like your BFF or quirky cousin than a toxic, overgrown, frat boy.
When you pay careful attention to these people’s content and offers, you’ll start to see a few patterns emerge.
They’re using many of the same old tactics such as income claim marketing, trumped-up testimonials, and high-pressure sales appeals to get you to buy. That’s backed up by a level of charismatic leadership that cannot be challenged or questioned, and in many cases, these individuals actively use methods to gain compliance from their community.
If you review how these individuals choose to market, sell and run their programs against Dr. Steven Hassan’s BITE Model or Dr. Janja Lalich’s Characteristics Associated with Cults, you’ll quickly see the cultic crossover.
For example, I recently saw a series of social posts from one individual in this industry who’s slowly and subtly priming their community via love bombing, boundary violation, and gaslighting. (As context, I don’t say that lightly as someone who’s spent years healing from decades of narcissistic abuse.)
Watching this has been chilling, and this is only what I’m seeing from the outside looking in. I don’t want to think about what’s happening on the inside of this person’s programs.
This isn’t an isolated example. This is commonplace in online business, and what’s most concerning to me is that these tactics are evolving to be more duplicitous and they’re being pulled by people that you often don’t suspect. They’re being exacted upon us by people talking about values, ethics, and doing business differently but it’s all smoke and mirrors.
Scope of Practice Issues Abound
Another aspect worth examining when it comes to the conversation about ethical business is experience and scope of practice. As an industry, invented authority abounds and people love to oversell their skills and experience.
It’s not surprising when one of the mottos of this industry has been “fake it until you make it”. While that can be helpful when you’re having a crisis of confidence (which is totally normal as a business owner), it’s another thing when you’re literally faking it.
Many 7-figure online businesses have been built on a pile of lies from false income claims to people teaching things they have zero experience with. At best, this is misleading (and unethical) as these coaches and providers are lying to their potential clients.
It’s worth noting, that I’m not making an attempt to gatekeep and dictate that people must have a formal degree in what they teach or require a high-end coaching certification as I realize those things are not accessible to many people. However, to claim skill and expertise, a minimum standard should be having done it more than once, and having actual skills and experience.
This brings me to the bigger problem with this, which is people simply not understanding the concept of having a scope of practice. If you’re not familiar with this idea, it’s largely used in the healthcare world for roles such as doctors, nurses, and other therapeutic professionals who need to comply with specific statutes and legislation.
The UK-based Health and Care Professionals Council has a great definition that’s applicable beyond healthcare.
“Your scope of practice is the limit of your knowledge, skills, and experience and is made up of the activities you carry out within your professional role.”
When you look at the current landscape of online business, the typical coach (especially the high ticket ones) claims a level of expertise around running a business that is truly beyond their scope. They’re teaching how to build or run a business based on their very limited experience doing it for themselves.
Years ago I worked for several coaches of this nature, and while I don’t want to get into the dirty details of everything I saw, I had a front-row seat to these scope of practice issues. They would literally take a program with their coach and then claim they were an expert on that topic. This ranged from everything from marketing to sales to mindset to making millions.
This is pervasive in online business as there’s no limit to what coaches will provide guidance on, while many of them have little training as coaches, let alone actual business experience.
In fact, someone I’m very familiar with (who’s a coach) declared bankruptcy several years ago but didn’t miss a beat marketing that luxury lifestyle and talking about their 7-figure business. (This isn’t a publicly known fact, but yours truly went digging around the internet and located the court documents.)
I never want to take business advice from someone who’s running their business into the ground like this. And this is a prime example of how with a clear scope of practice, they could have focused on coaching clients on things they did have actual experience with and been in integrity.
Staying in your scope of practice becomes even more critical when you move from business functions like marketing or sales into dealing with mindset.
It’s not uncommon for coaches to work with clients on their mindset, but without a clear scope of practice, along with practices rooted in consent, this is where the potential for real and lasting harm rises exponentially.
Particularly as many of these coaches work with clients on mindset use practices such as Neuro-Linguistic Programming (NLP), or believe they’re somehow qualified to replace a therapist.
In the past year, the scope of practice issues have intensified as more and more coaches in this space claim the term trauma-informed.
I won’t get into all of the issues around that as I have an entire podcast episode with Nicole Lewis-Keeber and Shulamit Ber Levtov on this topic, but it suffices to say that many of these individuals are beyond their scope. Some of them are well-intentioned; however, many are simply trying to cash in on increased awareness of how trauma impacts us in our businesses and lives.
Trauma isn’t something that should be trifled with, and there’s a massive difference between being aware or sensitive to trauma and operating your practice or business as a trauma-informed practitioner.
Trauma educator and business coach Lisa Kuzman has a very helpful outline of the differences between being trauma-aware, trauma-sensitive, and trauma-informed.
I do want to acknowledge this isn’t true for all coaches, but these scope of practice issues are an omnipresent problem in online business.
A skilled and legitimate coach will know where their scope of practice starts and ends and be incredibly clear with you on that. They’ll get your consent throughout the process, and they definitely won’t treat coaching as a substitute for therapy.
In last year’s essay, I discussed how I was seeing more and more people monetizing being “ethical” in their business with programs and certifications.
On the surface, this may seem like a good thing, as we need more business owners who are willing to run their businesses with trust, respect, caring, and fairness. However, many of the solutions that have emerged in this market are problematic.
The most significant issue I see at play here is that a lone coach or consultant shouldn’t be the one to dictate an ethical standard for online business.
In fact, this type of hubris and narcissism is exactly what created the dumpster fire practices we have today in online business. When you take the time to trace back the family tree, it’s abundantly clear that there are a few individuals who were the originators of these ways of doing things. That’s why online business is essentially an MLM love child between self-help and internet marketers that keeps minting new scammers on the regular.
There’s no universe in which I’m going to get on board with anyone who’s angling to be THE LEADER on this.
Particularly when so many of the people I see monetizing these opportunities learned from some of the least ethical individuals currently in this space and have engaged in harmful business practices (or continue to do so). Plus, they’ve done absolutely nothing to repair the harms they’ve done in the past.
Again, these are not individuals that I want to be dictating their made-up ethical standards to the rest of us, as it’s incredibly self-serving and really about them padding their bank accounts.
So, who should do this work? My perspective on this is that this needs to be a group effort with a wide variety of voices and contributions.
For starters, we need to develop a stronger shared understanding of what the “alternatives” are to doing business using fear and manipulation.
One of the biggest challenges in the online business world is that there’s a lack of regulation, and there’s no one ethical code.
Many professionals such as lawyers or therapists are bound by a professional code of ethics which according to Indeed is a “set of principles designed to help a business govern its decision-making and distinguish right from wrong.”
For professionals, breaching that code has very real consequences typically set out and governed by their professional association. There are processes in place for reporting ethics violations and for investigating them.
Here in the online business world, with these made-up, for-profit certifications, there’s rarely a code of ethics, and there’s definitely not any enforcement mechanism or consequences. The worst-case scenario is that you may be asked to leave the program or no longer be able to display your certification badge.
This is why we simply can’t rely on a sole business coach to dictate to us what that code should be, let alone enforce it.
Honestly, I understand why these solutions are so tempting. This industry trains us to look for magical easy-button answers and to outsource our agency.
Another aspect of this is the conversation in the coaching and self-help industry around the need for regulation, which I’m strongly in favor of.
A good example of this in action is the Consumer Self-Help Protection Bill in New York State which would require “certain non-licensed professionals to disclose information regarding risks”. This bill, which was developed by SEEK Safely, if passed into law will be the first of its kind in the US.
However, the government moves slowly, so we can’t look for legal or regulatory solutions to protect us in the near term. Consumer protection laws are reactive, not proactive, and truthfully, given the global nature of online business, a law in a single state or country is limited in its reach.
This is largely why I’ve focused my work on discussing these problems from a consumer education point of view. Which leads us to the question, how can you really protect yourself as a consumer?
Where Do We Go From Here?
If you’re still reading or listening, it’s because you actually care about the work you do and about your clients. This means you’re likely looking for ways to do business in a way that prioritizes truth, trust, and respect.
I’m going to provide an extensive library of resources at the end of this essay to help you become a smarter consumer in the online business space, but there are a few key things I want to share first.
Unlearn, Unfollow, Unsubscribe
A lot of doing this work relies on you, as a consumer and business owner, continuously developing and engaging your critical thinking skills. It’s going to rely on you unlearning along with unfollowing and unsubscribing from the status quo of online business.
Honestly, this may feel challenging at times as you likely have relationships with some of these individuals. You may have friends running their business in a way that runs counter to your values. You may even have to break ties with past mentors, coaches, or clients.
Embrace Your Vulnerability
One of the most important things you can do is recognize that every one of us is vulnerable to undue influence and coercive control.
In the case of marketing and advertising, research from Sagarin et al. (2002) found that the “ability to resist deceptive, persuasive appeals were largely dependent on the ability to acknowledge personal vulnerability to those appeals.”
To become a more discerning consumer, you need to understand that you are vulnerable. You need to approach things with a high awareness of the fact that you may be being played and decide from there.
Look Beyond Online Business
Over the past couple of years, I've had a few friends ask me how I managed not to get sucked too far into the online business vortex. I’ve thought about that question so many times, and there are multiple reasons why I was able to see through a lot of it.
Due to several experiences from childhood and my 20s, I’m hardwired to be skeptical.
But the other reason is that I have over two decades of marketing and corporate experience, and I know that this isn’t the only way to build or run a business. And that’s why it’s crucial that we look beyond this industry for solutions.
One resource I love for this is The TARES Test: Five Principles for Ethical Persuasion by Sherry Baker and David L. Martinson, 2011. This test “establishes ethical boundaries that should guide persuasive practices and serves as a set of action-guiding principles directed toward a moral consequence in professional persuasion.”
I also recommend you consult the American Marketing Association’s (AMA) statement of ethics and check out my TrustDNA resources.
Vet Who You Work with, and Vet Them Hard
Finally before you give anyone your time or attention, and especially your money, you need to vet them. I recommend you gear how much time you dedicate to vetting someone based on the level of risk.
If you’re casually following someone on social media, the stakes are lower, and a quick review of their account and/or website should be sufficient.
For anyone claiming that they’re “ethical” look for a clear, and easy-to-find articulation of their values and ethics, and ideally what frameworks inform their work and who their teachers are. A key aspect of being ethical is being truthful and transparent with your clients and community. (You can view my Values and Community Commitments on my website.)
Finally, if you’re going to buy from them, the level of due diligence you do should ramp up accordingly. The higher the price of the product, the more time and energy you should spend on vetting them. You can grab a quick checklist here (no opt-in required) to audit someone before you buy, and you can find a podcast episode on questions to ask before you invest here.
Trust me when I say assessing people with a critical eye like this will force you to slow down, and you may be surprised at what you discover. Remember, these celebrity entrepreneurs are really good at finding ways to shut down your critical thinking so working through these steps is the way to counteract those tactics.
Thinking ahead to 2023, my biggest caution to everyone is to prepare for an intensification of everything I’ve outlined above.
With a recession on the horizon, we will continue to make progress, but a down economy will likely lead to more outrageous and audacious behavior.
I’d love nothing more than to be proven wrong and a year from now to be able to write my year-end essay and podcast episode saying as much. Until then, I’ll be here being a full-time skeptic and educating as many consumers as possible in the online business market.
Below you’ll find a list of relevant resources curated from my work on ethical business and marketing. I encourage you to use these as a jumping-off point and to seek out guidance and input from a wide variety of resources.
Be Trusted Limited Series Podcast
This podcast provides specific alternatives to common online business marketing and sales tactics.
Duped: The Dark Side of Online Business Podcast
The podcast I co-host with Michelle Mazur where we explore common practices in online business, how they work, and provide ideas for what to do instead.
The Dark Side of Online Business Essay/Podcast
This is an epic essay and podcast episode that outlines the pillars of online business as usual and how they show up. It includes examples from my community and a list of potential solutions.
Trust First Pricing Principles
Pricing is one of the most problematic elements of online business today. This essay and podcast episode breaks down these pricing practices and alternatives.
The Big Problem with Income Claim Marketing
I talk about income claim marketing on an ongoing basis, but this piece dives into its history and use in online business circles.
How to Spot a Celebrity Entrepreneur
As I shared in this piece, toxic, problematic online business “leaders” often don’t present in the ways we expect. I outline six archetypes to watch for based on my years of experience in online business.