A Marketing Campaign Could Cost Your Brand $1,500 Per Text Sent 

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By: Peter Vogel |

Posted on October 19, 2023

What is TCPA and Why do Marketers Need to Understand It?

The Telephone Consumer Protection Act (TCPA) is a federal law that regulates telephone solicitations.  The TCPA was signed into law in 1991 by President George H.W. Bush and the Federal Communications Commission (FCC) has regulatory authority under the statute. TCPA created guardrails to restrict telemarketing calls, text messages, and faxes. The National Do-Not-Call List is the most familiar part of this statue to consumers.

While the TCPA was enacted to address the growing number of telephone marketing calls at the time, nowadays the TCPA also includes strict enforcement of unsolicited text messages. 

As smartphones reached a tipping point to become the favorite communication channel by consumers for messaging, browsing, and shopping, marketing evolved to omni-channel. To keep up with changing customer preferences, marketers should create communications to talk with their customers via print, email, text, and social channels.

An informal survey done by the Wise Marketer discovered a surprising number of Marketing professionals who were not fully familiar with the strict guidelines governing text messaging and the potentially massive financial penalties lurking for those who breach these regulations. 

Penalties for violating the TCPA are based on each violation and there is no cap on statutory damages, so thousands of violations can result in millions of dollars in penalties. The standard penalty is up to $500 per violation but can increase to $1,500 per violation for knowing or willful violations. It's not uncommon to see settlements in the tens of millions of dollars for class action TCPA lawsuits. 

Take for example a loyalty program with 5 million active members. If just 10 percent of that total were impacted by a SMS campaign that did not comply with TCPA guidelines, the penalties could start at US 250 million. That math makes it very clear that understanding TCPA and limiting your risk of violation through your program operations is critical not only to your success, but to your survival. 

Let’s back up for a moment. Loyalty Marketing is by definition Opt-in Marketing. Opt-in marketing is a type of “Permission Marketing”, a term coined in 1999 by Seth Godin in a book by the same name. According to Godin, Permission Marketing is a targeted strategy that gives the customer control over the communication they wish to receive from organizations. Customers must knowingly subscribe to receive emails or newsletters by providing their email address and sometimes their name and other personal information. This action by the customer is an essential aspect of complying with TCPA regulations.  

This equitable give and take are why Godin proclaimed in his book that Permission Marketing is the only true form of marketing that benefits both consumer and brand. The concept has not only survived the years well since 1999 but has become ever more relevant today as people are being bombarded with millions of digital messages in multiple channels.

Tracking customers who have opted-in for communications extends across the timeline of the relationship with the customer. Even though a person may have opted-in for communications and offers at the time of program enrollment, they can change their mind and withdraw their consent at any time. 

So how can you opt-in your members efficiently and compliantly? There are several challenges to consider:

  • Requiring members to visit your website or opt-in on a mobile app can be a cumbersome hurdle that will dissuade many consumers.
  • Relying on staff to solicit opt-in during a purchase can yield inconsistent results. This is also highly problematic in high turnover staff environments that characterize retail today.

Wouldn’t it be great if consumers could opt-in using the payment terminal with zero prompting from the staff and zero reliance on a web site or mobile app?

Now they can - vPromos has built an automated solution to solve this problem.

How’s it work?

  1. When a customer pays with a credit card, the payment terminal checks to see if the card is registered in your loyalty program.
  2. If the card is not registered, the customer will see a message asking them to join the Loyalty Program - “It looks like this card is not part our Loyalty Program yet, would you like to create a free Loyalty Account and start earning Rewards today?”
  3. The customer is then prompted to add a phone number, which creates a unique identifier for their account.
  4. The customer then sees a message with TCPA compliant messaging, asking if they’d like to receive double points and special offers through text message offers.
  5. Once the member has opted-in, they receive a text immediately, asking them to Reply “Y” to confirm the phone number is correct.
  6. The customer is now a member of the Loyalty Program, their credit card has been saved and they have opted in compliantly to receive text messages.
  7. From this point forward, anytime the same credit card is used, the transactions are tracked automatically, and awards are automatically allocated, all with ZERO prompting from staff.

After that, the customer can transact easily in subsequent visits and your brand can rest assured that the customer has been registered in the database with approval for communications in accord with all federal guidelines. 

Establishing a confident way to be in TCPA compliance takes major risk off the table, but there are other benefits to consider:

  • Your Loyalty Program now ‘owns’ an entirely new segment of consumers you can communicate with compliantly.
  • This new audience was previously anonymous to you. They most likely shopped in your stores in the past, but you could not identify them nor communicate with them in any way.

Automated POS loyalty program enrollment from vPromos is a win/win both for your Loyalty Program and your member base. Your legal team and CFO can rest a bit more easily knowing that TCPA compliance is assured, and your customers will enjoy receiving special offers and bonuses conveniently delivered via SMS.

If you’d like to learn more about the vPromos solution, please reach out me at peter@vpromos.com.