Disclaimer – This is an informative guide on text compliance and does not seek to provide legal advice on the subject. We recommend seeking help from a legal professional regarding any questions about text message marketing campaigns.
"Nobody wants to be called anymore. Telemarketing has become the dinosaur of outreach. When trying to reach customers that way, you hit a wall." - Wendy Drummond, CEO, USCellular Authorized Agent Premier Locations
Just like Premier Locations, an increasing number of telecom and wireless companies are looking beyond traditional go-to-market strategies such as telemarketing that no longer lead to sustainable growth. Today’s consumers demand seamless communication and connected experiences that transcend channels. However, telecom companies still have a lot of ground to cover to cater to these demands. In fact, an Ericsson Survey shows that the standard smartphone consumer needs 4.1 days and 2.2 attempts on average to complete an interaction with a telco company. Besides, 46% of customers think that their provider is hiding behind ‘bad’ technology such as canned responses, impersonal contact forms, and do-not-reply emails.
It’s not surprising that use of technology in telecom operations is linked to higher profitability, frictionless buying experience, and increased customer engagement. According to this McKinsey report, on average, telecom companies that digitize five key areas of their operations boast a profit margin of 43 percent, while telecom companies with less digitization have a profit margin of 21 percent. On the flip side though, as companies start exploring newer technologies, data security and compliance considerations increase.
What this article covers:
- Why compliant outreach is critical in telecom and wireless retail
- Rules to be mindful of when implementing text-based outreach campaigns
- How telecom companies can avoid violations by ensuring brand and legal compliance
Why compliant outreach is critical in telecom and wireless retail
Most retailers will experience revenue stagnation if digital avenues to up-sell and cross-sell are not identified. Once a customer signs the contract and completes their purchase, very few telecom companies invest in proactive customer engagement. This results in low NPS, decreased customer lifetime value, and underperforming cross-sell and up-sell campaigns. In addition, due to the Covid-led reduction in the number of customers visiting stores, retailers can no longer solely rely on in-person interactions with sales reps to drive in-store purchases and add-ons. This has led to a shift towards digital customer engagement platforms and an increase in proactive customer outreach efforts through channels like texting.
Using text messaging as a customer engagement channel comes with its own set of challenges. Legal compliance and data security are the most important considerations for telecom and wireless retailers when it comes to text-based customer outreach. Due to the ambiguous nature of some of the statutes, contacting customers without following proper protocols is like walking on thin ice. Not establishing proper compliance cadence while using text messaging as a communication channel has grave repercussions. Non-compliance with text marketing laws can result in hefty fines as well as irreversible damage to the brand’s reputation.
Rules to be mindful of when implementing text-based outreach campaigns
According to a survey conducted by political SMS marketing software Tatango, at least 68% of survey respondents say they’ve received text message spam. To provide consumers relief from this kind of unsolicited and spam telemarketing, the following rules and regulations were put in place:
The Telephone Consumer Protection Act (TCPA) is the US federal legislation pertaining to telemarketing. The TCPA is regulated by the Federal Communications Commission (FCC), an independent agency of the US government. Barring some exceptions, the TCPA specifies that businesses are not allowed to contact customers via phone calls or text messages without their consent. Violations can result in class-action lawsuits with fines starting at $500 and going up to $1500 per customer for every text message sent.
“On the whole, the TCPA seems like such a simple statute – but in reality, it’s exceedingly ambiguous. The huge run-up of TCPA cases that we’re now seeing in federal court is shifting the law in one way or the other. The judge-specific evolution of the TCPA law is happening in a patchwork fashion and that’s what continues to make its scope so vague and the process of deciphering it so confusing.” - Eric J. Troutman, the lead author, and editor at TCPAWorld
The FCC created the National Do Not Call Registry, also known as the DNC, and put in place regulations that prohibit companies from contacting customers on that list. To interact with people on this list, even if done on a one-to-one basis, there has to either be an established business relationship, some sort of an inquiry, or express written consent.
In 2020, the FCC announced a proposed $225 million fine against a group of individuals for making robocalls to consumers on the federal Do Not Call list as well as for contacting wireless consumers without prior consent. This has been the highest fine proposed under the FCC for violating the TCPA.
Canada Anti-Spam Legislation (CASL) came into force in 2014. Similar to TCPA, it applies to telemarketing and protects Canadians from spam calls and text messages. The key differentiating features of CASL are:
- There are two types of consent covered under CASL - implied and express. In implied consent, a business obtains permission to contact a person either when they disclose contact details publicly or provide them through an existing business relationship. Express consent is when a person explicitly gives a business the permission (in writing, through opt-in, or digitally) to send promotional messages
- Implied consent has an expiration date of two years after which companies can no longer legally send commercial electronic messages to people. Express consent is valid till the person withdraws it
- CASL requires businesses to send their identification information as well as a link to unsubscribe from the communication and opt-out from the promotion list within the text message
General Data Protection Regulation (GDPR) is a regulation enacted by the European Union (EU) that applies to any country doing business with or using any personal data of EU citizens. It pertains to data security as well as promotional text messages.
Similar to CASL and TCPA, GDPR requires companies to obtain permission before sending marketing messages to people. In addition to anti-spam rules, GDPR also specifies stringent provisions around data protection including deploying security measures around data collection, reporting any security breaches to customers within 72 hours, and providing customers the right to access their data.
Cellular Telecommunications Industry Association (CTIA) is a trade organization in the US that represents the wireless industry. Unlike TCPA, CASL, or GDPR, it’s not a legally binding statute - meaning carriers and dealers can’t be sued for not following CTIA rules. However, violating CTIA’s guidelines may result in mobile carriers suspending the telecom dealer’s access to their customers till the issue is resolved.
How telecom companies can avoid violations by ensuring brand and legal compliance
Get implied or express consent
Companies cannot buy lists or illegally obtain the contact info of people and add them as subscribers. Consent must be rightfully obtained, either in writing or through an SMS opt-in. Retailers should send a message confirming the person’s opt-in status once they give permission. To establish context, this message should ideally include information identifying the sales rep sending the message as well as a link to opt-out. Also, it’s crucial to understand that different communication channels need a separate opt-in consent. For instance, if a customer has opted in to receive emails from a carrier, that doesn’t automatically imply they’ve given the retailer or carrier permission to send them text messages.
Manage opt-outs and DNCs
It’s imperative to include options to unsubscribe from promotional text messages in all communication so that recipients have the flexibility to opt-out anytime. This can either be in the form of an unsubscribe link or through a shortcode keyword to be texted, like ‘Stop’. Wireless retailers and carriers should have a robust and automated workflow in place to manage opt-outs and DNCs so that they don’t accidentally contact those who unsubscribed.
Avoid sales-heavy language and phrases that trigger spam filters
To ensure text messages are not construed as spam, avoid using salesy language and words that can typically be considered offensive, spammy, or discriminatory. Phrases such as ‘free’, ‘urgent’, ‘giveaway’, ‘gift’, ,and ‘contest’ trigger spam filters and can cause recipients to block the number sending the message. Other spam indicators to avoid are link shorteners, all caps, and special characters. To steer clear of spam blockers, it’s advisable to send a text that adds value to the recipient instead of sending a direct sales pitch. Carriers and wireless retailers should also consider implementing internal guidelines around brand compliance while utilizing the texting channel for customer outreach. The process can also be automated by using a business text messaging platform with a built-in intelligent filtering system that flags risky words or phrases.
Be mindful while using robocalls, chatbots, and shortcode texts
Telemarketing statutes apply especially to promotional communication done using auto dialers and robocalls. This includes pre-recorded voice messages and automated texts sent via shortcodes. Under the US Supreme Court’s recent judgement a device cannot now be deemed an ATDS under the TCPA unless it has the capacity to use a random or sequential number generator.
Contacting consumers for marketing purposes without their permission using robocalls, chatbot-based commercial electronic messaging, and shortcode text blasts, is a violation of TCPA and other applicable rules. When telecom companies have permission to contact people with these methods, they can’t be sued but they still risk annoying consumers, leading to increased opt-outs.
According to this CGS Survey 86% of consumers prefer humans to chatbots. Two-way texting between individuals allows for an actual dialogue whereas texts sent by chatbots merely serve the purpose for standardized communication and automated replies. Using one-to-one text messages for customer outreach presents telecom companies with a win-win opportunity on both fronts - lower risk of compliance violations and increased customer satisfaction.
To summarize, laws surrounding text-based marketing exist to protect recipients from spams, unsolicited messages, and frauds. The purview of these laws applies to communications that are considered a nuisance. It does not apply to helpful and informative text messaging outreach done manually.
One-to-one texts or peer-to-peer texts are exempt from opt-ins. That means, if a sales rep or a customer service rep uses two-way texting on wireless devices for personalized outreach, that’s exempt from compulsory opt-in because it’s an individual sending an informational message to their customer. It’s also a good idea to employ a compliant one-to-one texting platform like Statflo’s TextKit that has a built-in configurable compliance engine to minimize the risk.
For more information on how Statflo empowers telecom and wireless carriers to engage, retain, and grow their business through compliant personalized outreach, check out our texting for telecom page.