In an era where instant communication is not only preferred but expected, the automotive industry finds itself at a crossroads. Dealerships, striving to foster robust relationships with their customers, often rely on Customer Relationship Management (CRM) systems to streamline interactions. However, a prevalent practice among many CRMs is the requirement for dealerships to send a text message to customers, seeking their permission to engage in text communication.

On the face of it, this practice is aimed at adhering to the Telephone Consumer Protection Act (TCPA) regulations, which were established to prevent unwanted telemarketing calls and messages. Yet, a deeper dive into the legal framework, particularly the FCC’s Omnibus Declaratory Ruling and Order of 2015, reveals that text messages are considered “calls” under the TCPA, and the rules governing them are not as stringent as some CRMs portray.

This practice of sending opt-in text messages, while well-intentioned, comes off as disingenuous and often spammy to customers. More importantly, it acts as a hurdle, deterring seamless communication between dealerships and customers. This initial text for permission, which isn’t mandated by law, not only confuses customers but significantly lowers the response rate, as many customers choose not to opt-in. In a competitive market where customer engagement is key, this self-imposed barrier by CRMs is doing more harm than good.

This article aims to delve into the essence of text message communication in the automotive dealership sector, juxtaposing it against other communication channels like emails and phone calls. We will explore the legal landscape surrounding text messaging, dissect the misinterpretation of TCPA regulations by some CRMs, and highlight how this misstep is handicapping dealerships. By shedding light on the efficacy of text messaging and the erroneous practice of seeking initial text permission, we aim to advocate for a more enlightened approach to customer communication, one that aligns with legal frameworks while catering to modern-day customer preferences.

In the subsequent sections, we will back our discussion with extensive research, underscoring the pivotal role text messaging plays in fostering better customer relationships and driving business growth in the automotive sector. Through this exposition, we seek to provide dealerships and CRM providers with insightful reflections on enhancing communication strategies, ensuring legal compliance, and ultimately, bettering the customer experience in the automotive sales journey.

The Ascendancy of Text Messaging in Customer Engagement

In the digital age, the evolution of communication channels has significantly impacted how businesses interact with their customers. Among the plethora of communication mediums, text messaging stands out due to its immediacy, personal touch, and high engagement rates. Let’s delve into the comparative effectiveness of text messaging versus other traditional channels like emails and phone calls.

Effectiveness and Efficiency:
Text messages have a staggering open rate of 98%, and a response rate of 45%, making them a highly effective channel for customer engagement.¹²³ In contrast, emails have a paltry open rate of 20% and a response rate of 6%.³ Furthermore, while only 20% of people answer calls they don’t expect, texts are read within 5 seconds on average, showcasing the immediacy and effectiveness of text messaging⁴.

Consumer Preference:

A substantial number of consumers prefer text messages over phone calls or emails for business communication. In fact, 95% of texts are read and responded to within 3 minutes of being received, indicating a strong preference for this immediate form of communication².

Engagement Levels:

Text messaging boasts higher engagement levels with a click-through rate of 36%, significantly higher than the 3.4% observed for emails⁴. This heightened engagement is pivotal for businesses, especially dealerships, as it facilitates quicker decision-making and fosters a closer connection with customers.

Spam Perception:

The inundation of spam calls and emails has led to a general aversion toward these channels. However, text messaging, when done right, is perceived as less spammy. The opt-in text message sent by some CRMs, however, contradicts this perception, coming off as unsolicited and thereby reducing the likelihood of engagement.

Text messaging, with its high read and response rates, has proven to be a quintessential tool for modern-day customer engagement. The erroneous practice by some CRMs of mandating an initial text for permission, under the guise of TCPA compliance, is a misinterpretation that hinders the very essence of effective communication between dealerships and their clientele. This practice not only goes against consumer preference but also dampens the effectiveness of a communication channel that holds immense potential for enhancing customer relations and business growth.

Demystifying TCPA: Unraveling the Opt-in Text Message Misconception

The TCPA was enacted with the primary goal of safeguarding consumers from unwanted telemarketing calls and messages. Over time, the FCC has provided clarifications to ensure that businesses have a clear understanding of the regulations, particularly concerning text messages, which are considered “calls” under the TCPA. Let’s dive into the legalities surrounding text messaging and dissect the common misconceptions harbored by some CRM providers in the automotive industry.

TCPA and Text Messaging:

The TCPA regulations center around the usage of Automatic Telephone Dialing Systems (ATDS) for sending unsolicited marketing messages to consumers. In the FCC’s Omnibus Declaratory Ruling and Order of 2015, it was clarified that text messages are treated as calls, thereby extending the same regulations to text messaging.

Customer Initiated Communication:

When a customer initiates communication with a dealership, the law allows the dealership to respond without requiring a prior written consent, as the customer has expressed interest. This aligns with the TCPA’s primary goal of preventing unwanted communication, not hindering legitimate business interactions.

The Opt-in Text Message Misconception:

The practice of sending an opt-in text message for permission to text, as mandated by some CRMs, is not a requirement under the TCPA. This practice appears to be a misguided attempt to adhere to the TCPA regulations but ends up being counterproductive. It creates an unnecessary barrier, often perceived as spammy by customers, and lowers the engagement rates significantly.

Legal Compliance vs. Customer Engagement:

The fine line between ensuring legal compliance and fostering robust customer engagement has been blurred by this opt-in text message practice. Dealerships find themselves in a quandary, wanting to engage customers via their preferred communication channel while also staying compliant with the law.

Need for Enlightened Compliance Practices: The need of the hour is for CRM providers to have a deeper understanding of the TCPA regulations and to devise compliance practices that do not stifle customer engagement. Enlightened compliance practices that align with both the legal framework and modern communication preferences are crucial for fostering better customer relationships and driving business growth.