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The New FCC Lead Generation Policy: What Contractors Need to Know
For years, contractors have been buying leads from lead aggregators like Angi, Modernize, EverConnect, and more—and it has been a lucrative option. But in December of 2023, a new FCC ruling was enacted that, once activated, will be changing the lead purchasing landscape.
So what is this new ruling and how does it affect contractors?
In this blog, we’re going to take you through everything you need-to-know. We’ll even break down all of the legal jargon for you so you don’t have to parse through the whole order. Let’s get into it.
Table of contents
- What is this new FCC lead generation ruling?
- What is the goal of this FCC rule?
- When will this order take effect?
- How do I know if the FCC rules apply to me?
- How does this impact my business?
- What action do I need to take?
What is this new FCC lead generation ruling?
In order to understand the ruling, you first need to understand how lead aggregator sites work: A homeowner submits a form or questionnaire on a website (like Angi) that indicates their project needs and contact information. That site will then sell that one lead to multiple buyers—sometimes directly to contractors, sometimes to other lead providers.
In the past, these sites could sell one lead to multiple buyers. But with this new FCC lead generation ruling, they can now only sell one lead to one source at a time.
But while this ruling applies to lead aggregators, (and not contractors buying from the lead aggregators), it does still impact contractors, which we’ll get into in a bit.
What is the goal of this FCC rule?
The purpose of this adoption is to close what has been considered a longstanding loophole in the lead generation industry. And it is doing this by formalizing do-not-call/do-not-text regulations and enforcing stricter opt-in requirements among lead aggregators.
Let’s unpack this a bit.
Prior express written consent
The opt-in requirement mentioned above is called prior express written consent, which comes from the Telephone Consumer Protection Act (TCPA). It was enacted in 1991 to protect consumers from unwanted and unlawful phone calls, and then adjusted in 2015 to include text messaging.
The prior express written consent requirement states that in order for any business to reach out to someone who has filled out a form on their website (a lead), that business must include specific verbiage on that form so that the lead is knowingly granting consent to be contacted.
When lead aggregators sell one lead to more than one business, they are essentially applying that lead’s one prior express written consent to multiple businesses. This new ruling states that it now only counts for one business at a time.
In other words, when consumers fill out a form on a site like Angi (or Modernize, CraftJack, Thumbtack, etc.) they provide consent for one business and only one business to contact them.
“Logistically and topically related”
It also outlines that the business must use the consent only as is “logically and topically related” to the site where consent was obtained. So a site that obtained consent on a comparison-shopping site for HVAC services cannot extend prior express written consent to receive calls related to travel deals.
Protecting the consumer experience
The reason for closing this long-standing lead generation loophole is to protect consumers from a negative experience. In the official FCC order and report, Commissioner Anna Gomes states:
“Choosing the right product or service in a thriving competitive market with a sea of options can be an overwhelming task.
That is why consumers turn to comparison shopping websites. To make the process of choosing the right product or service – be it a loan, medical insurance, or real estate – easier, and less overwhelming.
But when what seemed like a solution to staying afloat in a sea of too many choices turns into a tsunami of unwanted robocalls and robotexts, it is our job to step in to help.”
The FCC ruling, while not considered ideal by all, is intended to limit scam communications, not to run people out of business. Image source
When will this order take effect?
The order was announced on December 13, 2023, the report was released on December 18, 2023, but the order has not yet gone into effect.
So that begs the question: When will the order take effect?
It’s complicated. So here’s the short of it.
The order has been out for more than 30 days since its publication, so it is therefore live. However, the FCC approved a 12-month implementation period to give the industry time to adjust and prepare for the compliance changes.
This is not a sit-by-and-wait 12 months though. As Brian Hays and Michael McMorrow at the Locke Lord LLP point out, the expectation is that “Over the next 12 months, lead generators, website operators and lead aggregators will need to revise their websites and platforms to obtain individual consents for specific seller customers.”
How do I know if the FCC rules apply to me?
The new FCC ruling is for every website that has lead capture forms, but if you’re a contractor, it doesn’t apply to your forms since you don’t pass on your leads’ information to other contractors or lead providers.
The businesses who are directly affected by these rules are lead aggregators/lead sellers like Angi, Modernize, Thumbtack, CraftJack, Everconnect, and more. These sites have to update their forms and lead distribution processes to be in compliance with the new FCC policies.
So if it doesn’t directly affect you, how does it impact you at all? Let’s dig into it.
How does this impact my contracting business?
In terms of the actual rules and regulations, unless you’re a lead aggregator, you don’t need to make any changes to your website or forms (as long as you’re getting consent from your leads to contact them).
However, if your business is purchasing leads from a lead aggregator, you’ll likely notice changes in lead quality, availability, and pricing. This is because since they can now only give out one lead to one buyer, there will be a decrease in the number of leads available. Fewer leads without fewer buyers will likely mean higher competition and higher prices.
What action do I need to take?
In terms of the actual rules and regulations, unless you’re a lead aggregator, you don’t need to make any changes to your website or forms (as long as you’re getting proper consent from your leads).
But there are a few things you can (and should) do to mitigate the impact of having fewer leads available.
Make sure you’re reaching every lead
Since there will be fewer leads, you want to start getting as many appointments as possible from your existing leads. Then, when you do get new leads in fewer quantities, you want to have a process to get as many appointments as you can with those leads.
So how can you make sure you’re getting those appointments? We have two quick and easy items to help you!
- Reach out within the first five minutes. This works best for new leads and helps put you ahead of the competition.
- Use text messages. And email and phone calls. Reach out multiple times until they respond. This doesn’t have to be back to back, but you want to reach out more than once. It takes an average of eight attempts to actually reach your prospect and get a response from them.
Improve your quote follow-up
With fewer leads available, you may also find it harder to get the same volume of sales opportunities further down in your funnel. Fortunately, reexamining your current quote follow-up process can lead to higher close rates without needing net new leads.
This is because it takes 5-12 follow-ups to close a deal. So if your current process doesn’t include multiple outreach across multiple channels, there’s a chance that a good chunk of revenue is sitting idle in your backlog.
Proper sales follow-up requires multiple touches from multiple channels.
Keeping track of all of your prospects and reaching out to them multiple times is impossible to do manually. With a tool like Hatch, however, you can automate your sales follow-up and stop letting opportunities fall through the cracks.
Revisit your aged leads
One of the most commonly overlooked places to drum up opportunities is from your aged leads and prospects. Anything that may have fallen through the cracks in the past could be just the thing to remedy the future lead lull from aggregators.
Explore alternative lead generation strategies
A lead aggregator isn’t everything. Business existed before lead aggregators, so the question is, how did people get those leads?
There are several ways you can generate leads outside of a lead aggregator! We’ve added a quick list here with some of our favorite lead generation ideas:
- Search ads
- Social ads (Facebook, Instagram, YouTube, etc…)
- Web forms
- Organic social media (Facebook, Instagram, LinkedIn, etc…)
- Email marketing
- Google Local Service Ads
- Content (downloads, blog, organic search, etc…)
Lead generation isn’t just about working with a lead aggregator. You can find your own leads through several other marketing endeavors. From our latest State of the Home Improvement Industry Report
Focus on upsells and cross sells
Upsells and cross sells are a great way to increase revenue with your existing consumer base, even in the event that lead generation declines. As long as you have an effective way of communicating with your customers, you can turn them into new opportunities too.
Creating cross-sell options may also expand your market or niche! This is great for you to stand out in the future market where leads are more challenging to come by. Adjusting for this now would also give you a head start on the competition.
Talk to your current lead aggregator
As we said before, the ruling isn’t quite in effect yet, so your lead aggregator likely hasn’t fully implemented their changes and they have almost a whole year to do so. This means you, as their customer, have time to see what changes they plan on making.
Ask your lead aggregator questions.
- What changes are you planning to make?
- How will this change affect our current business relationship?
- Will my contract with you be changed in any way?
Ask them whatever fits your current and future lead aggregator needs best. If you don’t like what they have to say about their future plans, you may want to start looking into a new lead aggregator, but don’t forget to vet your new lead aggregator too.
If you haven’t been using a lead aggregator and were considering getting one, we aren’t saying to hold off on your plans. But be sure to ask how these changes will affect your future business relationship with them and ask what you can expect. They may have some good insight as to where the lead generation industry is heading for you.
Be prepared for the future of lead generation
While this new FCC ruling on the TCPA opt-in policy won’t officially take effect for several months, it’s important to stay in the know and be prepared for the coming changes.
And as you can see, lower volume of new leads from lead aggregators doesn’t have to mean a decrease in revenue. Follow the tips from this post and you may even see an increase in revenue! To recap, they are:
- Make sure you’re reaching every lead
- Improve your quote follow-up
- Revisit your lead management processes
- Explore alternative lead generation strategies
- Talk to your current lead aggregator