American consumers are a fickle lot, partly because the law says they can be. At one moment they're broadcasting an unsettling amount of detailed and personal information on social networking sites, and the next they're suing a company that has violated their privacy with unrequested text messages.
A head-scratching contradiction to be sure, but in the end, it's impossible to miss their message: "We'll speak out loud all we like, but we'll listen only to those we've granted permission to speak to us. Break that rule, and you'll have trouble."
The latest company to learn this lesson is Papa John's International. The No. 3 pizza chain is facing a class-action lawsuit for being a party to the transmission of 500,000 SMS text messages to consumers who are claiming they didn't want them. According to the Telephone Consumer Protection Act, defendants in such cases could be fined as much as $500 for each offending message, which makes Papa John's potential penalty $250 million—about four times its 2011 net profit.
One might wish the same penalties applied to junk mailers and politicking robo-callers, but they don't. A person's private mobile phone number has become a symbolic line of demarcation of one's personal space, and crossing it is seriously intrusive.
It's partly because many unsolicited SMS texts are one way and difficult to stop. Since most consumers share mobile numbers cautiously, they feel violated when a business—especially one from whom they've never bought a product—acquires theirs without permission. When they can't opt out and the messages keep coming, they're aggravated.
When so many companies have been successfully sued—even put out of business—for such intrusions, it's a wonder other firms continue relying on SMS technology. Push notifications, for example, require customers with smartphones to opt-in voluntarily while making it simple to opt out. Even email solicitors now make it easy to unsubscribe. In each case, the customer has the power to continue or terminate the communication.
They also have the power to choose from whom they receive messages. If they agree to receive information on a particular brand, they assume it'll be about that product only and that they won't be targeted with messages about products. Honoring that agreement fosters good customer relationships and builds trust. Breaking that trust leads to dissatisfied customers and, sometimes, lawsuits.
The caveat is clear: Businesses should market using technologies built on active networks, i.e. open and two-way communication channels between them and customers. Not doing so not only has obvious downsides (one-way communication is dated and doesn't actively engage customers in a dialogue), multiple lawsuits have proven there are obvious liabilities. (Papa John's International claims it isn't liable because the SMS messages were authorized by a franchisee and sent by a third party. The judge who approved the class action sees otherwise, and there is ample precedent to support that decision.)
The message from customers also is clear: Don't speak to me until I've spoken to you first. Do that and we'll get along just fine.
Jitendra Gupta is CEO of Punchh, a mobile CRM suite that includes branded mobile apps for campaigns, games, loyalty, online ordering, payments, referrals, reviews, gift cards, surveys, and integrates with social networks and operators POS systems to gather 360° customer insights. Punchh helps restaurants increase same store sales and profitability by driving repeat visits, word of mouth, new customer referrals, and higher returns from marketing campaigns.