Mobile Marketing: Legal Mobility

Photo by Josh Keown

Eager to cultivate deeper relationships with customers, the Thiels added mobile marketing to their advertising arsenal in 2010. Today, The Capri has built a growing database of customers’ mobile numbers, all of whom stand willing to receive information on special offers, Happy Hour deals and other Capri store happenings.

“Text messaging’s been a nice addition to our marketing mix and something that’s allowed us to reach more people quicker,” Jeff Thiel says.

David Wachs, senior vice president of mobile for ePrize, a Michigan-based interactive marketing agency that counts Hungry Howie’s and Boston’s Pizza franchisees as clients, confirms mobile marketing’s appeal, citing a read rate four to five times that of e-mail and calls to action that are fulfilled eight times more than e-mail. In addition, Wachs says mobile frequently drives higher tickets, provides a platform for ongoing communication with customers and offers operators improved tools to measure program productivity.

For all of that allure, however, mobile marketing possesses its obstacles, nuance and pitfalls.

To wit, Papa John’s got slammed with a $250 million class-action lawsuit late last year alleging that select franchisees sent out 500,000 illegal text messages in 2010. Some customers complained they were receiving more than a dozen consecutive text messages, some in the middle of the night.

For mobile marketing professionals, the Papa John’s case is an attention-grabbing example of how ignorance to mobile marketing’s legalities can deliver potentially devastating consequences, including significant financial penalties, evaporating consumer trust, and even the mobile program’s cancellation.

Heather Mlodinow, founder of Frextr, a Pasadena, California-based local marketing agency and The Capri’s mobile vendor, says mobile marketing’s powerful prospects must be balanced with both the law and consumer sentiment.

“People are sensitive to how much comes across their mobile device that they didn’t ask for, which has promoted the renaissance of permission-based marketing,” Mlodinow says.

Unlike e-mail and auto-dialing services that go largely unpunished for SPAM, the Federal Communications Commission (FCC) has been proactive with mobile privacy legislation and SMS marketing regulations that prevent mobile phones from becoming yet another SPAM-collecting device.

“The FCC got in front of mobile marketing early … and the current laws with respect to mobile are more rigorous than anything we’ve ever seen in marketing,” Mlodinow says.

Mobile marketing’s most common legal misstep remains sending text messages to individuals whom have not opted into the program.

Most blatantly, this is done when businesses upload a list of mobile numbers — sometimes pulled from the POS or an in-store survey — into a messaging platform. Sending messages solely to those who have granted approval is a business’ only legal course.

At The Capri, Jeff Thiel sees no benefit to purchasing a list of mobile numbers and rushing the store’s announcements onto more phones.

“We’ll continue to patiently build our own database with clarity and compliance top of mind,” he says. Opting in may be the first step, but far from the only step.

In all print and digital materials discussing a mobile program, businesses must define in accessible language the frequency of the messaging, the ability to opt out, information on exiting the program, and potential costs.

Mlodinow says a fully transparent disclaimer would read: “No charge for subscribing. Standard message and data rates may apply. Phone numbers are never shared or sold. For help, text HELP to (five-digit short code). Two messages monthly. To cancel, text STOP to (short code).”

Whenever a customer opts into a pizzeria’s mobile marketing campaign on the ePrize platform, that individual receives an immediate message reiterating these central elements. “This is part of being responsible and transparent, not to mention required by the carriers,” Wachs says.

Businesses will find almost certain trouble when they ignore their own terms of service. Far too often, operators fail to comply with something as simple as message cadence, such as sending six messages in a month when their own terms of service note two messages per month.

“The focus with mobile marketing should be on precision and quality, not quantity,” Mlodinow says.

To protect both the operator as well as its own business, both the ePrize and Frextr platforms prevent the uploading of mobile number lists as well as disregarding the stated message frequency.

“We put in compliance protections to safeguard everyone involved,” Wachs says.

Furthermore, Wachs suggests that operators, particularly those who incentivize staff for securing customers’ participation in a mobile program, educate workers on the program’s specific details, including its benefits for the eatery and customers.

“Having a staff educated on the mobile program can certainly help minimize problems and confusion,” Wachs says, further adding that restaurants should protect their integrity by adopting a strict policy against selling mobile numbers to a third party.

Finally, Mlodinow urges all operators to pursue full legal compliance with a reputable mobile marketing vendor well versed on the evolving regulatory landscape.

“Be rigorous with your legal follow through because missteps can bring some severe, perhaps crippling consequences,” she says.

On selecting a credible mobile marketing vendor

Given the energy and opportunities consuming the mobile marketing space, many upstarts have jumped into the field ignorant to the landscape’s unique, shifting climate.

Heather Mlodinow, founder of local marketing agency Frextr, says business owners make a giant mistake when they do not properly vet a mobile marketing vendor, particularly as mobile carriers are authorized to perform audits and various watchdog organizations monitor the industry for missteps.

Both Mlodinow and David Wachs, senior vice president of mobile for ePrize, a Michigan-based interactive marketing agency, identify the Mobile Marketing Association (MMA) as a rich source of information for pizzeria operators interested in adding mobile to their marketing mix. A global collective of mobile carriers, major brands, and mobile marketing vendors, the MMA sets best practices, educates on compliance, and guides business owners to reliable resources.

“Small business owners and even attorneys cannot be expected to know all the intricacies that providers in this space should know, so linking up with an organization capable of sharing credible, current information is vitally important,” Mlodinow says.

Chicago-based writer Daniel P. Smithhas covered business issues and best practices for a variety of trade publications, newspapers, and magazines.