Transactional Vs. Promotional SMS

Disclaimer: Please note that this is not legal advice and is for informational purposes only. It is not intended to substitute for advice from qualified legal counsel, nor is it to assist you or help you be compliant as you assume 100% responsibility in all legal matters.

From SMS promotions and contests to appointment reminders and alerts, you have countless reasons to text your customers.

But not all text messages are created equal. And if you send the wrong kind of message without the right kind of consent, you could face steep fines and lawsuits.

The TCPA is clear on the difference between promotional and transactional SMS. Any business that uses text messaging to communicate with customers needs to understand these key distinctions, too.

In this guide, we’ll define transactional and promotional SMS and break down the main differences, so you’re prepared to stay compliant.

What Is Promotional SMS?

Promotional SMS messages are sent to generate sales, promote your product or service, or increase brand awareness.

Basically, any text message you send customers that contains a promotion, offer or coupon is considered promotional SMS, including all marketing and advertising messages.

Sending promotional texts is a great way to increase customer engagement and boost sales. 75% of consumers would like to see special offers, discounts and coupons delivered via SMS. And SMS campaigns produce a whopping 14% conversion rate.

Pro Tip: Sending promotional SMS requires express written consent from customers. Take the necessary steps to gain permission before sending a promotional text, and work with your legal team on this matter.

Examples of Promotional SMS

Any text message that promotes your organization or attempts to make a sale is considered promotional SMS, including:

Check out a few examples of promotional SMS below: 

Promotional SMS examples
Promotional SMS examples

What Is Transactional SMS?

Transactional SMS contain time-sensitive information that is required for customers to use your product or service. Transactional texts include many types of alerts, confirmations or verifications.

It’s important to note that transactional text messages must contain necessary information. In addition, when someone consents to receive transactional messages, that does not give you permission to send promotional messages.

 For example, if customers provide their mobile number for verification purposes when booking a hotel, they aren’t automatically consenting to receive text updates about joining the hotel’s loyalty program. While this type of information might be helpful to some customers, it isn’t necessary – and doesn’t constitute a transactional SMS.

Don’t let the fear of TCPA fines scare you away from using transactional SMS.

Informational texts can be very beneficial for ensuring that important messages get noticed. One study by Vibes found that 70% of consumers prefer to receive transactional messages on their mobile phone.

Examples of Transactional SMS

Transactional text messages relay essential information that a customer needs to complete an action. Use cases include:

  • Order and payment confirmations
  • Reservation confirmations
  • Verification codes
  • Password resets
  • Two-factor authentication
  • Account activations
  • Shipping and delivery notifications
  • Appointment confirmation or cancelation

Here are some examples of transactional SMS messages:

Transactional SMS examples
Transactional SMS examples

Differences Between Transactional and Promotional SMS

TCPA penalties for SMS marketing can be steep, so you need to be hyper-aware of the differences between promotional and transactional SMS. You may assume that a text is transactional, when it’s actually considered promotional and could get you in trouble.

The key difference is that transactional SMS contain strictly essential information, such as order status updates, while promotional SMS are reserved for marketing and sales communications.

When in doubt, here are more ways to distinguish transactional texts from promotional ones:

1. Purpose of the Text
Promotional SMS messages contain offers, discounts, coupons and other marketing messages. These types of text messages are meant to support marketing or advertising campaigns by bringing in web traffic, engagement or sales.

Transactional SMS messages contain alerts, details and information that enables a customer to take the next step in using your product or service.

2. Recipients of the Text
Promotional texts can only be sent to people who have provided express written consent to receive marketing messages from your business via SMS.

Transactional texts can be sent to customers who opt to receive information about their order, account or appointment. For example, customers can enter their phone number during the checkout process to request shipping and delivery notifications related to their order via text.

3. Send Time
Promotional SMS should only be sent during normal business hours, Monday through Friday. Transactional texts can be sent any time because they are usually triggered automatically by a customer action.

Understanding the distinctions between transactional and promotional SMS is essential to staying compliant with the TCPA. In the next chapter, we’ll discuss more TCPA compliance tips for keeping your SMS campaigns legal and customers happy.

Disclaimer: Please note that this is not legal advice and is for informational purposes only. It is not intended to substitute for advice from qualified legal counsel, nor is it to assist you or help you be compliant as you assume 100% responsibility in all legal matters. 

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TCPA COMPLIANCE