What eCommerce Marketers Need to Know About SMS Compliance
Today I confirmed my reservation at Francie — a very yummy restaurant in Brooklyn, NY — via SMS. This is a process that anyone who has ever used the reservation booking platform Resy would be familiar with. However, the SMS marketing from Francie was not like the others, and it made me smile.
The first text read: “Yo! Just a reminder you’re booked at Francie for dinner tomorrow. Your table is for 2 at 7:15pm. We can’t wait to see you!” When I replied with a “1” to confirm. They responded, “Word. Your reservation is confirmed.”
Of course, I know I’m not talking to a real person, but when done right, SMS marketing can be incredibly effective. Text messages have high open rates (unlike email), with the majority of recipients reading messages within minutes of receipt. It’s cost-effective too. The cost per message is generally lower than traditional advertising methods, making it an attractive option for D2C and eCommerce marketers.
A study by Digital Marketing Magazine found that SMS campaigns have a click-through rate (CTR) of approximately 19%. Compared to other digital marketing channels, this CTR is considerably higher.
But, with great power comes great responsibility, as they say. SMS is subject to more legal regulations than some other channels, and marketers must be careful to ensure compliance with those regulations and obtain proper consent from customers before implementing SMS marketing campaigns. Respecting privacy and providing opt-out options are essential for maintaining trust and positive customer relationships.
There are some new changes that have been implemented in the SMS ecosystem — specifically in Florida and a few other states. Here’s what you need to know.
A Quick Overview of SMS compliance
Any brand that is sending texts using an SMS platform (i.e. it's being sent over an API rather than manually by a person) is subject to certain laws.
There are 4 main categories of regulation to abide by:
- Federal laws
- State laws
- CTIA (The governing carrier organization)
- Carrier enforced best practices
The most prominent Federal law marketers must abide by is The Telephone Consumer Protection Act of 1991, or TCPA.
The level of risk to your brand depends on the specific rules being violated. Violations of federal and state regulations can result in lawsuits and hefty fines, ranging from $500 to $1500 per text message per subscriber.
On the other hand, failing to adhere to CTIA and carrier-enforced best practices increases the risk of your messages being filtered or blocked, and could even lead to your phone number being deactivated.
How to Stay Compliant
1. Get Consent
SMS marketing 101 is consent. You must get consent from a consumer before messaging them. These rules apply to pop ups, checkout opt in, social media/email that let subscribers opt in, any package where a keyword or QR code allows subscribers to opt in.
Note that some of these opt-in points will live outside of your sms platform (social media, email, display of keywords and/or QR codes) with any of these touch points, you still need to include the relevant compliance language from your form provider.
2. Support Opt-out Requests
This one is obvious. You must make it easy for consumers to unsubscribe from receiving your texts, and you must honor their request to unsubscribe immediately.
3. Don’t Send Messages Outside of Designated Hours
The federal TCPA suggests that messages be sent only between 8am and 9pm. Florida, Washington, Maryland, and Oklahoma TCPA laws are more specific and require messages be sent only between 8am and 8pm local time.
Florida’s Legislation and Other New Regulations
As with all laws, SMS regulations are constantly evolving and it’s important for D2C marketers to stay up to date on what’s happening state by state.
One notable example is the FTSA (Florida Telephone Solicitation Act) passed in July 2021, which serves as Florida's state-specific version of the TCPA and regulates how marketers may interact via calls and text messages to Florida residents.
The FTSA imposes additional restrictions and penalties for violations:
- Longer quiet hours (reducing waking hours to 8am to 8pm local time)
- More restrictions on what messages are allowed during quiet hours
- A limit of 3 messages within 24 hours for a specific campaign or product
Furthermore, states like Washington, Maryland, and Oklahoma have also implemented their own distinct sets of rules, while other states are considering similar legislation.
D2C marketers who message subscribers in Florida may encounter demand letters that threaten lawsuits, particularly if they cannot demonstrate that subscribers opted in to receive texts in a compliant manner.
Why does this matter? Even if you are following the rules, you need to protect yourself. It's worth noting that plaintiffs often employ a "spray and pray" strategy, resulting in a high volume of demand letters and lawsuits in Florida. Even if marketers are in the right but not prepared, “nuisance” ’lawsuits can cost $10-100k to settle and legal fees.
There is some optimism that potential changes to the law may significantly reduce the number of SMS-related lawsuits in Florida. However, the full impact of these updates will take time and remains uncertain, emphasizing the importance of ongoing monitoring and awareness.
What Steps Should Brands Take?
If you know that you are sending texts to customers in Florida, double check that you are following the latest guidelines.
Additionally you should:
- Know about legal risks for SMS
- Follow all of the compliance practices that you can
- Use a compliant SMS provider that builds in guardrails
- Consult your general counsel if you need any help
In conclusion, SMS marketing is still one of the most effective channels for D2C marketers, making keeping up with regulation changes more than worth it.
Another extremely cost-effective channel? Influencer marketing. Data shows that, on average, businesses generate $6.50 in revenue for each $1 invested in influencer marketing. Even more impressively, the top 13% of businesses are seeing revenue of $20 or more per every $1 spent.