Transactional vs Promotional SMS Marketing

SMS marketing, also referred to as text message marketing, is the dawn of a new era in customer communications. Think of where email marketing was 10 years ago. When it comes to communicating with consumers it’s all about doing it on their terms. If your business does not adapt, you might as well be sending faxes, as your messaging will fall flat.

There are tons of reasons to text message customers or clients that span across all industries. Upcoming promotions, new items in stock, limited release items, flash sales, contests, loyalty rewards, reminders, appointment alerts, and service/product updates are just a few ways you can utilize SMS marketing communication. SMS marketing has truly revolutionized the way we communicate, but it’s not without its own rules and regulations.

The TCPA, which governs the SMS marketing space, outlines their definition for the differences between promotional SMS and transactional SMS. Before you start embarking on your SMS marketing journey, it is important to understand the TCPA’s regulations as well as the differences between promotional SMS communication and transactional SMS communication.

What Is Promotional SMS Messaging?

Promotional SMS marketing messages are sales focused. The intent of a promotional SMS message is to not only sell, but promote any product or service. That's because, at its core, a promotional offer or coupons endgame is to sell the product or service your business references. This encompasses advertisements and anything that could be considered a marketing activity. In other words, if your goal was to simply create awareness and not necessarily to sell at that specific moment in time, your SMS message is still considered promotional.

Promotional texts are a valuable tool. According to SMS Comparison, 90% of consumers prefer to receive text ads over phone calls or emails. 90% of consumers also found the greatest value from SMS loyalty reward programs. Pair that with an average conversion rate of 15% and you’ll be wondering why you haven’t used promotional SMS sooner. Just make sure your business gets express written consent from each contact before messaging them.

What Is Transactional SMS Messaging?

Transactional SMS messaging contains important information, usually sent in the form of alerts, updates, and confirmations, regarding a product or service. Transactional text messages communicate important information such as order, payment, and shipping updates. Other examples of transactional messages include appointment/reservation confirmations, account activations, suspicious account activity alerts, and password resets.

Just as there is a clear distinction between promotional and transactional messaging, there is also a difference in the type of authorization your business receives. To be clear, if a customer consents to receive transactional messages, that does not authorize your business to also send promotional texts. Your company must be transparent about what the customer is opting-in to and then only message them based on their preferences. Remember, just because a message may be useful, like knowing about an upcoming discounted rate, does not mean that it is necessary. It is important to always recognize this distinction when planning your campaigns.

Distinguishing Between Transactional and Promotional SMS Messages

The TCPA fines for improper SMS marketing messages are costly. Like many other things in life, you cannot plead ignorance to the regulations. It is your businesses responsibility to understand the differences between transactional and promotional SMS messages before you send them. There are steps you can take to ensure that you are sending SMS marketing messages with the right intent.

To start, key in on the purpose of the message. Ask yourself, “does my message have sales undertones?” Anything related to a potential sale, in other words a sale that hasn’t already happened, is promotional. This is because you are promoting your product or service to someone who has not yet transacted. If you are offering a coupon code, informing someone of a sale or limited release product, you are sending a promotional SMS message. Whether the customer also gives traffic to your site, signs up for marketing collateral like a newsletter, or shares your message on social media for a discount, the end goal of your message is a sale.

If the purpose of your message is to communicate to an existing customer about a sale that already happened, then your message is probably a transactional SMS message. For example, if your message is alerting a customer that the product they ordered is no longer in stock, or that there is a delay in shipping, it is transactional. This is because it relates to a transaction that already happened. Any details or information about an existing product or service that the customer has already purchased will fall into this category.

Your campaigns should be based around the segmented list of contacts they are going out to. Recipients of a promotional text message may only be sent to people who have opted-in (express written consent) to receive marketing messages. Similarly, transactional SMS messages should be sent to those who have opted-in to receive updates regarding their order, payment, appointment, or account. Transactional text recipients usually opt-in to these updates/alerts during the checkout process. Due to the fact that most businesses allow online purchases 24/7, and updates regarding those orders are frequently automated, there are looser regulations regarding appropriate send times for transactional SMS messages.

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Disclaimer: Please note that this is not legal advice and is for informational purposes only. Your company and associates assume full responsibility in all legal matters.