Promotional SMS vs transactional SMS

Promotional SMS

The purpose of a promotional SMS message is to promote a service or a product. These are marketing and sales messages that the consumer may have requested.

Text messages sent by businesses for marketing or advertising purposes are considered promotional SMS. Promotional SMS is mostly used by brands to get people interested in their products or services and get them to interact with them in a more direct and efficient way.

For instance:

  • A unique coupon code that can be redeemed for a discount on one or more products
  • Alert for new products or information on new inventory

Transactional SMS

The goal of sending a transactional SMS message to a customer is to provide them with information that is essential for making use of your product or service.

For example:

  • Notifications about a product or service that a customer uses, like an appointment reminder
  • OTP (one-time password) or two-factor authentication SMS messages
  • Delivery Notifications - Information regarding the shipment of products or services
  • Fraud Alert Messaging - Notifications of suspicious unusual behavior
  • 2FA - Some type of two-factor authentication that uses access codes to unlock accounts.
  • Security Alert - Notifications that warn users about a possible breach of systems
  • Account Updates - Notifications delivered to account holders concerning changes to their accounts
  • Customer Service - Interactions with customers by support and other customer-facing employees

What is the difference between transactional and promotional SMS?

To simplify, you need to think about the response you want to receive from your clients before sending any type of message. What action are you urging them to take, if any? Define your business objectives for the message and specify the metric(s) you anticipate will improve as a result of the message. This will assist you in determining the type of message to send.

For instance, if you wish to improve website traffic, client engagement, customer retention, or sales rate, your message will certainly fall within the promotional SMS category. Promotional SMS messages can have a significant effect on all of these measures, since coupons sent by SMS message are redeemed 10 times more frequently than coupons advertised via other channels.

But if you want to build trust in your brand, give customers a good buying experience, or let them know about important order information, transactional SMS could be good choice. In fact, more than 50% of customers would rather get support-related information through transactional SMS than through other channels.

Many companies, particularly ecommerce ones, utilize both of these SMS techniques. Online stores often send customers or subscribers messages about new products, coupon codes, or sales. If you have provided your phone number to a brand, you have likely received these types of promotional messages.

Usually, ecommerce companies use transactional SMS to send shipping updates. Your company may benefit from both types of strategies, and there is no one right method to use them. Focus on providing value to your SMS users at all times.

When to send a promotional SMS vs a transactional SMS

Regardless of the SMS strategy you use, it is good to know that companies cannot send SMS messages at will. Every country has different rules about when SMSs can be sent. U.S. and Canada follow the Telephone Consumer Protection Act (TCPA).

In accordance with these regulations, for a company to send a promotional sms, the receiver must opt in by providing written approval. In addition, promotional SMS messages cannot be sent before 8 a.m. or after 9 p.m. local time (some states have even more stringent time restrictions. For example, in Florida promotional texts are only permitted between 8 a.m. and 8 p.m. in the recipient's local time zone).

In contrast, transactional SMS messages are not subject to these laws. Because these messages are not sent for promotional or marketing objectives, there are no restrictions on when companies can send them. Regardless of DND (do not disturb) status, transactional SMS messages can also be sent to all receivers.

Regulation and transactional SMS vs promotional SMS

As stated previously, the TCPA defines SMS compliance regulations, although promotional SMS and transactional SMS have separate rules. Promotional SMS messages cannot be sent to customers who have set their status to do-not-disturb (DND) or who have not compliantly opted in to receive your texts.

Therefore, messages containing details on a new product, a coupon code, a sale promotion, or any other promotional content cannot be delivered legally to these customers. For each message delivered in violation of these restrictions, fines might begin at $500. Refer to the TCPA's guidelines for additional information.

The compliance regulations for transactional SMS are little more permissive because transactional messages are informational and may be mandatory for the client to receive, regardless of their DND or opt-in status.

It is allowed to send transactional SMS to any customer at any time, but it must be made clear that these messages are not for promotional purposes. If a transactional text contains promotional material, it may lose its transactional status, putting your company at danger of violating compliance rules. For this reason, it is important to determine the purpose of each message in advance so that you can correctly label it as either promotional or transactional - and then follow the appropriate TCPA compliance rules. This will help ensure that you are not in violation of the law.

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