On June 26, the Federal Communications Commission (FCC) and Federal Trade Commission (FTC) established a Do-Not-Call (DNC) registry. By mid-August, 30 million consumers who do not want their phones to ring with credit card offers and other solicitations had added their phone numbers to a national database; the FTC expects the registry to contain 60 million numbers by the time it goes into effect.
Starting Oct. 1, companies are prohibited from calling phone numbers on the DNC list for five years.
There are a few exemptions:
- Calls made by or on behalf of non-profit organizations or political organizations
- Telephone surveys (provided they don’t turn into solicitations)
- Calls made to consumers with whom a company has had a prior business relationship in the past 18 months
- Calls made to consumers who have filled out an application or asked a business about its products or services in the last three months.
Comply or Face Costly Fines
Businesses that do not comply with the new DNC regulations face stiff penalties ― as much as $11,000 per violation.
“The [penalty] amount depends on whether a company is a first-time violator or whether they’ve called before and ignored federal, state or their own DNC lists,” explains Cathy McFarlane of the FTC’s Office of Public Affairs.
There is also a cost to businesses just to comply. Businesses that do any kind of phone solicitation must periodically buy the DNC list to strip opt-out consumers from their call lists. States also have individual DNC lists, and they have 18 months to fold them into the national registry.
Some state lists will merge with the national list on Oct. 1. In the meantime, business owners must continue to buy local DNC lists from their state’s department of commerce. Also, individual businesses have to maintain lists of consumers who ask not to be contacted by their companies.
Prices vary for state DNC lists. The FTC has set fees for businesses to buy the national list at $25 per area code (the first five area codes are free), up to maximum annual fee of $7,375.
While most home building contractors do not use phone solicitation, the DNC regulations are a concern for builders in certain markets and for specialty remodelers who have traditionally used the phone to find prospects.
“It’s a big deal for those who are slow to buy, especially active adult buyers,” says Jim Lesinski, vice president of sales and marketing for Del Webb Corporation. The Bloomfield, MI-based builder/developer maintains call centers to field inquiries from prospects and follow up with them after they’ve visited its active adult communities. “We’re tying the Do-Not-Call list into our customer relationship management systems,” says Lesinski.
Marketing Mix Pays Off
Some specialty remodelers are already using alternate marketing methods. “We got away from cold calling years ago,” says Dan Betz, president and CEO of USA Deck in Woodbridge, VA. The company leaves brochures at homes that don’t have decks (it pinpoints them ahead of time with aerial photography), and then knocks on doors or sometimes calls to set up appointments with home owners who express interest in its deck components.
Likewise, at Case Design/Remodeling, Inc., which has a handyman division, “we do outbound calls only to our client base to keep in touch with them,” says Mark Richardson, president of the Bethesda, MD, company. “We have not noticed any effect [from the DNC regulations], but it will be interesting to see how they impact the remodeling community.”
Using diverse marketing strategies makes good business sense no matter what you build or remodel. Direct-mail, radio and television spots; newspaper and magazine ads; newsletters; job-site and truck signage; a strong Web presence; charity events and home parades are several effective ways to get your name in front of the public.
E-mail is a good communication tool for current customers, but do not use it to farm for prospects or you will be considered a spammer. Besides, federal Do-Not-E-mail legislation is currently under consideration.
Fax Prohibitions Get 16-Month Reprieve
The new FCC regulations governing commercial faxes are scheduled to go in effect on Jan. 1, 2005. Under the regulations, businesses will not be able send any unsolicited faxes; that is, “any material advertising the commercial availability or quality of any property, goods or services which is transmitted to any person without that person's prior express invitation or permission,” as the FCC puts it.
Previously, the FCC had ruled that businesses were to stop sending unsolicited fax advertisements by today, Aug. 25, whether or not they had prior business relationships with the recipients. The FCC granted a stay of those rules on Aug. 18.
This means you now have more than a year's time to comply with the regulations. Until the new regulation takes effect, you can still fax advertisements to people with whom you’ve never done business. However, it is a good idea to plan ahead and put systems in place so you’ll be in compliance in 2005.
How to Prepare for the New Regulations
“I would recommend that any business that uses fax communication develop and implement a written consent form,” says Daniel E. Durden, NAHB’s association counsel. Durden also recommends that NAHB members contact their attorneys for specific legal advice about complying with the DNC and fax regulations.
The FTC and FCC are currently developing procedures for businesses to order the national DNC list. The Direct Marketing Association maintains an online list of state DNC laws and list sources. Be sure to get a copy of your state’s DNC list if you have not already done so.
Diverse Marketing Strategies Available in 'The Best of Sales & Marketing Ideas'
'The Best of Sales & Marketing Ideas,' available through BuilderBooks.com, offers a variety of strategies to augment your marketing program. Compiled from the most popular articles in Sales & Marketing Ideas magazine, the book offers tips, techniques and advice from successful home builders and prominent new-home marketing pros. To view or purchase the book online, click here, or call 800-223-2665 to order by phone.
Want more information about effectively managing your business?
NAHB’s Business Management Department offers a variety of online resources to help you run your business better and more profitably. Click Business Management Tools for articles about human resources, financial management, sales, production, technology, customer service and other business-related topics. In addition, visit the NAHB Software Users Network Discussion Forum (SUN) to ask technology consultants and other builders what they think of various software packages and applications.
BuilderBooks.com Has Books About Business Management and Customer Service
BuilderBooks.com offers a variety of publications about business management and customer service. To view or purchase the business management publications online, click here. To view or purchase the customer service publications online, click here.
Subscribe to NAHB’s Business of Building e/Source
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University of Housing Offers Courses on Customer Service and Business Management
The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here.
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