The commercial SMS messaging industry is complicated, and it is important that you understand and recognize the specifics of SMS compliance and text message rules and regulations. Sending the incorrect message to the wrong person at the wrong time may have a negative impact on your customer experience as well as put your company at risk legally.
In this comprehensive guide, we will talk about exactly what SMS compliance means, the rules defined by key governing bodies, and how you can follow these rules to avoid getting penalized.
What is SMS compliance?
SMS is a very successful marketing method that allows businesses to reach customers quickly and effectively. It is a channel where customers are most likely to see text messages and click on them – research by Gartner has suggested that SMSes have an open rate of 98%.
It may be one of the most practical and popular methods of communication around the world, but when it comes to business and customers, text-based communication can't take place without prior express written consent.
In the past, there used to be little to no protection against spamming customers with text messages and acquiring their phone numbers. Whereas now, in many parts of the world, cold texting is illegal. There are several entities that actively oversee SMS compliance, such as the following.
Federal Communications Commission (FCC)
Federal Trade Commission (FTC)
Mobile Marketing Association (MMA)
Cellular Telecommunications Industry Association (CTIA)
When setting up SMS marketing campaigns, it is important to study and adhere to industry norms such as the MMA's Consumer Best Practices for Messaging and the CTIA's Short Code Monitoring Program.
Additionally, only the FTC and the FCC have the power and jurisdiction to define SMS compliance rules, and all businesses must follow these texting laws.
Ultimately, sending SMS messages for marketing purposes can require following numerous laws and regulations, depending on where you or your customers live.
SMS compliance laws in Europe
In the European Union and the United Kingdom, the GDPR, which stands for the General Data Protection Regulation, governs the use of SMS for commercial texting activities and is meant to protect the personal data and privacy of individuals located in these regions.
The GDPR establishes standards on what businesses and other organizations do with personal data, including the types of data that can be gathered and any information that may be used to identify you, such as your name, IP address, or phone number.
Furthermore, the GDPR covers the transfer of data outside of the European Union too. This means that it applies to all enterprises that do business within the EU or gather personal data from customers who are EU residents.
There are seven principles that the GDPR sets out for the processing of personal data in accordance with the law. These include:
Lawfulness, fairness, and transparency
Purpose limitation
Data minimization
Accuracy
Storage limitation
Integrity and confidentiality (security)
Accountability
These principles serve as the regulation's leading rules and guidelines for compliance processing. The data controllers are responsible for data processing, following the regulation's principles, and showing that they are following the law. Consumers should be protected and empowered, not exploited or disregarded, according to the EU's new policy on online privacy.
This regulation applies to enterprises of all sizes and concentrates on data authorization, access, and focus.
SMS regulations in the US
In the United States, electronic communications, which include SMS, email, calls, and more, are strictly regulated and restricted by specific texting laws. Businesses and organizations must follow any state-specific text messaging law that applies to their region in addition to the federal restrictions. There are two federal laws that oversee the use of electronic communications, the CAN-SPAM Act for emails and the Telephone Consumer Protection Act for SMS.
Telephone Consumer Protection Act (TCPA)
The TCPA was enacted into law in 1991 and is the primary regulation that covers SMS marketing in the United States. With this law, businesses are prohibited from sending SMS marketing messages to customers without their consent, and the penalties for it can range from $500 to $1,500 per text. Even if the person has a long-standing relationship with the firm or has given them their own phone number, the company isn't allowed to send text messages without express written consent.
In order to add members to their subscription list, companies must receive specific written consent, which essentially means an agreement that is digitally stored and documented, not necessarily written on paper. It is your obligation to guarantee that your SMS campaign is legal and acceptable, as well as familiarize yourself with any relevant industry legislation, regulations, and guidelines.
Opt-in methods to obtain express written consent
Consumers are protected by opt-in messaging, which plays a significant role in reducing the number of unsolicited text messages. An opt-in from a user indicates that they have chosen to receive text messages from your business, giving you permission to send additional messages.
However, based on your industry and the sort of messages you want to send, you may need to get permission through a variety of methods.
Many businesses employ a double opt-in mechanism, which requires customers to confirm their registration after completing their sign-in process. This acts as double protection against legal charges, tarnished company image, fines, and other risks of potential permission issues.
Under the TCPA law, and as discussed above, businesses need to ask for consent before sending marketing text messages. However, that is not the only reason for it. Sending messages to customers who do not wish to receive them will also impact the image of your company and make for poor marketing campaign efforts.
Opt-in requirements don't favor just the customers. They also bring many benefits to businesses, such as:
Fewer spam complaints
Improved conversion rates
Increased open rates
Better engagement rates
Security against fines and other legal risks
A clear opt-out option
There will always be people who don't wish to have messages sent to them, despite how great your products or services are. There could also be certain customers for whom your brand is just no longer relevant. It is their right to stop getting marketing messages at any point they choose. That's why businesses should implement an opt-out process the same way as opt-in.
Ideally, in accordance with most texting laws and as a sign of respect for your customers' right to choose, most (if not all) of your marketing texts should automatically include a small section on opt-out instructions, perhaps as a very short note right at the end.
The opt-out message shouldn't have to be very extensive. In fact, it should be as easy as possible for a recipient to communicate their choice to unsubscribe from receiving any future text messages from your company. So you can simply include keywords or phrases for the customers to reply with in order to stop the messages, such as "UNSUBSCRIBE", "QUIT", "CANCEL", or "STOP".
Transactional vs promotional SMS marketing
There are two types of SMS messages that businesses send out, transactional and promotional, each with its own distinct purpose, core message, as well as unique SMS compliance criteria.
It is important to understand the difference between the two, before your start to use SMS marketing to help your business, and know how each can be beneficial to your strategy. Here is what each of the two SMS types means.
Transactional SMS
Businesses employ transactional SMS to communicate transactional information. They reach out to their subscribers directly to convey vital facts that aren't tied to promotional activities, such as order status updates, appointment reminders, delay announcements, shipping notifications, and more. So it is a non-marketing message that businesses send to customers for the sole purpose of informing and supporting them along their buying process.
Transactional messages enhance customer engagement since they are more than simple messages or alerts. They assist organizations and their customers to develop a solid communications channel because if a customer is receiving regular information, they will feel appreciated and cared for when employing your services.
These messages are not only more engaging for customers, but they are also more time-sensitive and dependable, providing customers with information through a fast and secure channel. These often automated messages facilitate the timely distribution of essential information. Due to their nature, they may be delivered quickly in response to a specified trigger, with no need for user intervention.
In most cases, a transactional SMS does not require a double opt-in since the required consent may be provided by the customer when they enter their phone number at the time of initiating the transaction. However, if the customer does add in their phone number, the company should specify they will only be sending transactional messages and not promotional ones.
Promotional SMS
Promotional SMS is a low-cost, high-impact marketing strategy that allows you to promote your business and services directly to your customer's mobile phones. They are sent by businesses to potential consumers and clients to inform or remind them of product or service details, special deals, promotions, and discounts.
When following all the necessary legal procedures and overall done correctly, this type of SMS attracts new customers and, as a result, increases sales. It's even easier to gain these benefits when you use a credible SMS API provider such as Messente for your marketing campaign. You get the advantage of many useful features, such as simple and convenient mass texting, efficient contact management, higher guaranteed delivery rates, and much more.
It is absolutely essential for businesses to get consent from their customers before sending advertisement-style texts. The opt-in process is easy: you can pick a keyword that people can text to your number. This keyword can be marketed on your business website, social media, in-store signage, and other marketing channels to boost subscription rates.
What happens if I don't follow the rules?
SMS is a powerful marketing strategy that requires rules and regulations to be followed correctly, and failure to do so could result in your business facing serious legal action, not to mention hurting your brand image. Companies that fail to follow these laws face heavy fines, beginning at $500 for each unlawfully delivered text message.
Conclusion
SMS marketing can be a terrific method to keep your audience engaged, but you need to know how to do it correctly by following the guidelines. As long as you adhere to the Telephone Consumer Protection Act (TPCA) in the United States or General Data Protection Regulation (GDPR) if conducting commercial activities in Europe, your marketing strategy will be safe from criticism and penalties.
