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The Comprehensive Guide To SMS Compliance – Rules To Follow And Why They Matter

Written by: Eric Yaillen, Executive Contributor

Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.

 

I recently set up a new client’s marketing automation system for text message marketing and to my surprise, after sending a small number of messages, the account was suspended.

businessman holding a mobile phone while working on laptop

As it turns out, this is another area where regulations are changing and in this case, there was a new rule that came into effect this year for new accounts, but existing accounts were grandfathered. So today, we're going to dive headfirst into this because text message marketing is essential for modern businesses that want to thrive. Understanding SMS Marketing and SMS compliance may not seem like the most riveting topic at first, but I assure you it's vital, particularly if you want to avoid potential penalties. I'll do my best to make this as light and digestible as possible.

Our primary focus in this article will be a simple, step-by-step checklist to help ensure your business remains in the clear when it comes to these all-important regulations. But before we get to that, let's briefly talk about why SMS Marketing is important and then review why these rules exist as well as why they're so crucial for your business.


9 Reasons Why SMS Marketing is Important To Your Business

SMS marketing offers several advantages that can make it a valuable addition to any business toolkit in terms of open rates and, consequently, conversion rates.


1. Instant Delivery: Because SMS messages are delivered instantly, this allows for real-time communication making it ideal for time-sensitive promotions or urgent notifications.

2. Cost-Effective: SMS can be very cost-effective, allowing businesses to reach a large number of people at a relatively low cost. We charge customers $.009 per message segment (160 characters), and that translates to $9 for 1000 messages.

3. Direct Communication: Your messages go straight to the recipient's mobile device, often resulting in immediate attention.

4. Broad Reach: Nearly everyone, regardless of demographic, has a mobile device capable of receiving text messages these days meaning your marketing messages can reach a large and diverse audience.

5. Personalization: With SMS marketing, you can personalize messages by merging data in your CRM system as well as segment data to target specific messages to specific groups which can lead to higher engagement. 6. Easy Opt-In/Opt-Out: Most SMS marketing tools make it simple for customers to opt-in or opt-out of your messages so that it is both user-friendly and compliant with best practices for user consent.

7. Open Rates: SMS has nearly a 100% open rate, compared to an average open rate of 20% email, making it 5 times more likely that your message will be seen, thereby increasing the potential for customer engagement and response. 8. Response Rates: SMS also typically sees higher response rates compared to email. The immediacy and convenience of responding to a text, along with the fact that people tend to have their mobile devices within reach most of the time and get far fewer text messages, contribute to these higher response rates.

9. Conversion Rates: As more recipients see message contents which could contain calls to action, promotions, or other sales-driving information, it’s more likely that you will see more immediate responses to those messages when compared to email marketing.


Why Rules Exist Regarding SMS Marketing

Mobile carriers, recognizing the growing importance of SMS marketing, started to establish new rules and regulations in 2023. Chief among them is 10DLCthat is enforced by several organizations including the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), and the Cellular Telecommunications Industry Association (CTIA), in order to create a respectful and safe environment protecting individuals from spam and unwanted messages. The consequence of non-compliance? Potentially hefty fines that could seriously impact your business. But don't worry. This guide is here to help you navigate these waters.


Transactional vs. Marketing SMS Messages

With respect to rules, different protocols may be required for establishing consent for transactional and marketing SMS messages. Marketing messages typically require explicit consent from the recipient before they can be sent, while transactional messages can generally be sent without prior consent, as they are often necessary for completing or confirming a transaction. Transactional SMS messages are automated, non-marketing text messages that you may send to support your customer along their journey such as order confirmations, welcome text messages, shipping updates, and other important informational notifications that are critical to the customer's interaction with you. On the other hand, marketing or promotional SMS messages are intended to draw attention to sales, seasonal deals, or new product releases. The content, frequency, and tone of these messages should be carefully managed to avoid annoying prospects.


Regulations marketers should be mindful of in SMS marketing?

It is vital for marketers to familiarize themselves with these rules and regulations and ensure that their marketing strategies are compliant. Penalties for Non-Compliance for failure to adhere to text message marketing laws can result in substantial fines ranging from $500 to $1,500 per occurrence meaning if you sent 1,000 non-compliant messages, you might face a penalty of $500,000 or more. These rules and regulations are enforced by several organizations, including the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), and the Cellular Telecommunications Industry Association (CTIA). Similarly, the European Union (EU) also has a comprehensive regulatory framework when it comes to SMS marketing. The key regulation being the General Data Protection Regulation (GDPR) which places stringent requirements regarding handling and processing of personal data. Consent is a cornerstone of the GDPR, meaning your business must obtain explicit and freely given consent prior to sending marketing text messages. Moreover, similar to the US, each SMS sent by marketers must provide a clear and easy way for recipients to opt out of future messages. Failing to comply with these regulations can result in substantial penalties. Just be aware that specific rules and their implementation might vary between EU member countries as well as between individual states in the U.S., so it's advisable that, as a marketer, you familiarize yourself with the regulations specific to the country they are operating in.


Short Codes

Ever opt-in to text messages using a 5 or 6-digit code (i.e., 26786)? This is known as a short code and that can either be a dedicated number or one that is shared by several businesses.


Historically, shortcodes could be shared, or "sublet," and used by numerous businesses. The advantage of “shared short codes” was primarily cost savings, as shared shortcodes provided a significant cost savings compared to dedicated short codes. Shared short codes, however, started to be phased out by mobile carriers two years ago and some major carriers discontinued the practice completely in order to enhance control and security primarily because shared shortcodes have been linked to spamming and unsolicited messages. This doesn't mean that all shortcodes are being eliminated. Dedicated short codes that are assigned to a single specific business will continue to be available. This is a preferred option for many enterprises because of ease of use, high deliverability rates, and a significantly higher throughput average of 1500 messages per second. In light of these changes, it's time to start thinking about a transition plan if your text marketing provider is still using shared short codes. Now, onto the checklist. This is your one-stop reference point for ensuring your SMS marketing is compliant. It's a 'must-save' list that will keep you on the right side of those rules, so let's dive in!


Your 7-Step EssentialChecklist for SMS Compliance

1. Acquire Explicit Permission: Before you send any text messages, ensure that you have explicit permission from the receiver. This isn't just a friendly suggestion. This is a key requirement under TCPA (Telephone Consumer Protection Act). 2. Provide an Opt-out Option: Every message you send should have a clear and easy-to-use opt-out option. It's like offering a polite exit strategy to anyone who'd prefer not to receive your messages. 3. Identify Yourself: Ensure each SMS clearly states who's sending it. Transparency is not only respectful, but it also helps build trust with your audience.


4. Stick to the Point: Keep your messages focused and relevant. Remember, people signed up for specific content, not a surprise mystery tour.


5. Respect the Clock: Be mindful of when you send messages. It's best not to disturb your customers during their precious downtime or in the middle of the night.


6. Keep Records: Maintain thorough documentation of your SMS marketing activities. In the realm of compliance, your records are your lifeline.


7. Ensure Privacy: Make sure to store and handle customer data securely. This isn't just about trust. It's about maintaining legal standards.


Conclusion


And there we have it, folks! I hope you found this guide to SMS compliance helpful and perhaps a touch more entertaining than expected. Remember, while it may seem like a chore to keep up with these rules, doing so is an essential part of maintaining your company's reputation and avoiding any nasty surprises down the line. So, keep this checklist close and happy texting!


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Eric Yaillen, Executive Contributor Brainz Magazine

Known as a Marketing Technology Wizard, Eric helps his clients save countless hours and expense by streamlining their processes and eliminating unnecessary systems for managing customer information and marketing programs. As the creator of The MegaFluence Method, he applies his extensive knowledge and decades of experience coaching businesses on becoming market leaders in their niche. Email him at eric@cognilogicfx.com or go to megafluence.net/eric for a free 30-minute introductory business analysis.

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