Avoiding The Pitfalls Of Text Marketing for Homebuilders

Disclaimer: Texting regulations are complex and ever-changing. This guide is not intended as legal advice. You must consult legal counsel to ensure your texting strategy complies with current federal and local laws.

Direct message marketing is an important marketing channel for homebuilders. However, recent regulations have created a minefield of legal pitfalls. Before implementing a direct message strategy, you need to know some key things.

Types of marketing messages

Any direct SMS message from a company to a customer is considered a marketing text. There are three types of marketing texts: informational texts, promotional texts, and conversational texts. Depending on the type of text, different levels of consent are required.

Informational texts

An informational text is used to convey information. An example of an informational text would be an outbound text to confirm an appointment. Informational texts don’t require a return text. For informational texts, the company must still obtain express consent to text. Express consent can be a simple checkmark on your website agreeing to receive text messages, or it can be your sales agent asking for permission to text. “May I send you periodic text messages to keep you informed?”

Promotional texts

Typically thought of as marketing texts, these are texts with an offer or call to action. Much like what you send through mass email, promotional texts are often sent on a mass scale. For promotional texts, express written consent is required. To obtain express written consent may require a checkmark on your website agreeing to receive text messages, or it may even require your salesperson to have a walk-in customer give a quick signature upon registration.

Conversational texts

Conversational texts are much like your day-to-day texting. Simply a conversation between a salesperson and a customer or realtor. These are generally a series of messages back and forth regarding a specific topic. If the customer initiates the conversation, consent is implied. However, even with implied consent, an opt-out option must be available that enables the customer to opt-out of receiving more texts.

Opting out

In addition to receiving express permission to text, we must also give customers the option to opt out of future messages. We often see an opt-out as “Reply STOP to unsubscribe” within a marketing text. Regulations state that all three types of marketing messages must have the option to opt-out.

Who governs these regulations?

In the U.S., two federal laws govern text messaging – the CAN-SPAM Act and the Telephone Consumer Protection Act. Data Protection regulations established by the cellular phone industry also help protect customers from unsolicited text message marketing. In addition, some states have more stringent rules.

Why is this important?

This should be important to your company financially and in terms of great customer experience. Financially, sending unwanted text messages could result in fines or other fees. Penalties for violating text message laws can include a $500 to $1,500 fine per message. If a homebuilder is sending thousands of messages on a mass scale, ignoring regulations surrounding text messaging has the potential to be very costly. A recent conversation with a homebuilder revealed that their company recently had to pay a settlement for unsolicited texting, equaling more than $400,000. It should be noted that some unscrupulous consumers and attorneys understand how difficult it is for smaller companies to keep abreast of regulations and seek out non-compliance for a quick payday.

Beyond the financial ramifications, ensuring the privacy and security of your customers is important. Receiving unsolicited and unwanted text communications is annoying! Complying with the regulations ensures our home buyers have a great experience.

Lasso integrates with direct SMS platforms such as CallRail and Avochato. These platforms allow builders to manage and track direct SMS communication, allowing them to offer a great customer experience while also being mindful of texting regulations.

Non-SMS options

SMS is what we traditionally think of when we think of text messaging—direct text from one device to another. These text messaging regulations cover one-to-one direct and mass SMS. Other messaging options may be less restrictive. In-app messaging still offers the same communication as SMS, with additional benefits. Common in-app messaging platforms in our industry include NoviHome and AtlasRTX. By using in-app messaging, the customer has already opted to receive communication through the app just by using it.

Marketing with intention

There is no doubt that direct SMS messaging is the easiest way to get in front of our buyers. Where emails can get lost in a sea of other promotional emails vying for attention, text messages aren’t easily ignored. Developing a messaging strategy with these regulations in mind will ensure your ability to market through all different platforms for years.