As a home services business, generating high-quality leads is essential for growth. However, starting in January 2025, new regulations will change the landscape of lead generation, potentially increasing lead costs across the board. Here’s what you need to know and how to prepare now.
What Are the Changes?
New regulations under the Telephone Consumer Protection Act (TCPA) will require businesses to obtain explicit, written consent from consumers before contacting them via phone or text. Previously, companies could obtain permission for multiple businesses through shared lead generation, but that will no longer be allowed. This change aims to give consumers more control over who contacts them and to reduce unwanted solicitations.
Why Does This Matter to You?
Even if you aren’t currently working with lead aggregators, these changes will impact the entire market:
- End of Shared Leads: Many businesses rely on shared leads from aggregators. With the new rules, companies can no longer share leads among multiple businesses. However, they can still buy exclusive leads from partners, which may require adjustments to sourcing strategies. This transition could lead to increased costs as competition for high-quality, exclusive leads intensifies.
- Increased Competition: As companies move to generate exclusive leads, competition in digital advertising channels will increase. More businesses vying for the same audience means higher costs for advertising on platforms like Google Ads and social media. Coupled with a decrease in overall demand in most categories (vs. recent years), competition for remaining volume only intensifies.
- Expect Rising Lead Costs: With more companies competing for fewer leads, the cost per lead is likely to rise. This means your marketing budget may need to stretch further, especially in paid search and local advertising. And, as you read further, is why connecting leads to sales & profit will be more important than ever.
What You Can Do to Prepare
Here are some actionable steps to help your business stay competitive:
- Enhance Your SEO: Focus on improving your local search visibility to attract organic traffic. This can include optimizing your website, creating relevant content, and ensuring your business is listed correctly on local directories. With increasing costs to acquire leads via paid channels, every bit of organic traffic will help create a more balanced, sustainable digital marketing program.
- Leverage Local Service Ads (LSAs): If you haven’t considered LSAs before, now is the time. LSAs connect you with local customers searching for services like yours. They appear at the top of Google search results and often come with customer reviews and ratings, making them a trusted option. With increased competition for leads, LSAs can help you capture attention and valuable traffic. LSAs typically show for non-branded searches (e.g. “roofer near me”), but not for branded searches. This could lead to more aggressive brand conquesting (i.e. competitive keyword bidding) to replace traffic & leads - Which leads to the next point…
- Invest in Branded Search: Focus on campaigns that promote your brand specifically. This ensures that potential customers who search for your business find you and not your competitors. In auctions for branded searches with multiple bidders, search engines are usually able to establish the true brand owner and reward that bidder with higher quality/ad rank>lower CPC>lower cost per lead - It will cost you a fraction of what it will cost your competitor to be in that auction.
- Connect Leads to CRM/Sales: As lead costs become more expensive, it’s crucial to connect leads as close to the sale as possible. This strategy helps you understand the true ROI of your leads, making it easier to optimize your media mix and allocate your budget effectively. By tracking which leads convert and at what rate, you can refine your marketing efforts to focus on the most profitable channels.
- Conversion Rate Optimization: As lead costs increase, full user journey optimization becomes critical to reduce the rate of drop-off through your lead flow from initial click to sale. CRO can lift multiple channels and even a modest improvement can more than offset rising lead costs.
Conclusion
The upcoming changes under the TCPA will reshape how home services businesses generate leads. While smaller businesses might not feel the immediate impact, rising competition and costs are on the horizon. By investing in your digital marketing strategy now, particularly in SEO, LSAs, and branded Paid Search campaigns, you can better position your business for success in this evolving landscape.
