Mobile marketing can be a very successful marketing strategy for any company as long as the company stays ethical and within the boundaries of the law. Unfortunately, for AT&T this was not the case in 2014. AT&T was convicted of violating the mobile marketing law against “cramming”, where consumers were charged for third party charges on their cell phone without their consent. (FTC.gov, 2016) With this came a heft bill of over 88 million dollars that AT&T had to either credit their current customers or refund to previous customers.
This had a negative effect on consumers especially where the government had to get involved to rectify the situation. Consumers were left paying for items that they did not agree to and in many cases, they probably did not even know that they were paying for them. How many people actually read every line on their cable, internet, or telephone bill? Many people receive paperless bills and have their accounts on autopay, so they have no idea. As a consumer, how could they trust the company again, and having to check their bill every month would be time consuming and frustrating.
The 88-million-dollar hit was just the tip of the iceberg for the cell phone giant. First off, no company how big or small wants to be in the crosshairs of the US Government, or any government for that matter. Also, being viewed as an unethical company that charges people for things that they did not purchase is extremely bad for their reputation. Most customers probably just paid their bill without even looking at the charges, but now they will read every line to make sure they are not getting overcharged. That is, if they even decide to stay with the company. There are competitors, and they do not have the stigma of being unethical. The 88 million was a big hit but opening the door for your competitors to take you customers is far worse.
Consent is key when dealing with mobile marketing. Any marketer should get permission from the consumer for emails, marketing material, or third-party charges. Once the customer has given consent, make it easy for them to opt out if they want to. Noone wants to feel trapped in something that they do not see the value in. Even if they do not give you consent the first time or opt out of a certain campaign, the consumer will remember how easy it was to work with your company and will be open to other campaigns down the line, instead of looking to your competition.
References:
FTC.gov, FTC Providing Over $88 Million in Refunds to AT&T Customers Who Were Subjected to Mobile Cramming, 2016 https://www.ftc.gov/news-events/news/press-releases/2016/12/ftc-providing-over-88-million-refunds-att-customers-who-were-subjected-mobile-cramming
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