One of the most popular real estate lead generation tactics are direct mailing campaigns. But with its popularity comes a high level of competition. So, to separate yours from the tens, hundreds, or even thousands other direct mailing campaigns in your market, it helps to have a basic understanding of the best practices that experienced investors are implementing across the nation
Craig Simpson, who’s the owner of a direct marketing company that is responsible for overseeing 30 million pieces of direct mail sent out over 300 different promotions each year, is a direct mailing expert. In our recent conversation, we discussed the three important factors involved in a direct mailing campaign and the best practices for maximizing your response and conversion rate.
Selecting a Mailing Service
Since Craig built his direct mailing service from scratch, he has a behind-the-scene’s perspective on the characteristics of the good, bad and ugly direct mailing services. His advice on selecting a mailing service in your local market is “I would shy away from anybody who uses words like ‘guarantee’ or ‘ensure that you’re going to get the best kind of response rate’.”
There isn’t a one-size fits all method to direct mail. It depends on various factors like the target customer, the product, the market, etc. So, if a mailing services is “promising” or “guaranteeing” a certain outcome…RUN! They cannot know whether or not their service is a right fit for you until they understand what it is you’re trying to accomplish.
Instead, Craig said, “the things you’re looking for is people who talk about testing, because all direct marketing boils down to a lot of testing.” We will dive into the best practices for testing different mailer strategies and types in the sections below. If you decide to forgo the DIY direct mailing campaign, make sure the direct mailing service you use doesn’t offer guarantees, but focuses on testing instead.
Once you’ve selected the ideal direct mailing service, or made the decision to conduct your own campaigns, the next step is to understand the three main factors to a successfully direct mail, which are the list, the copy and the offer.
The list contains who it is you are mailing to, and is the most important piece of any direct mail campaign. Craig said, “you want to make sure you have a targeted list of prospects that will look like the type of customers you want to go after.”
If you’re interested in distress property leads, make sure you have a list of distressed owners. If you’re going after property’s whose owners live elsewhere, make sure you have a list of absentee owners. It may seem obvious, but if you obtain a list from a bad source, you’ll be surprised at how much money you can waste by mailing to unqualified leads. So, make sure you’re getting your lists from reputable sources, like CoStar or the local auditors site.
The next natural question is, how often do you mail to your list? Like most things in real estate investing, the answer is that it depends. The frequency in which you send out your mailing campaigns will depend on the quality of your list and your response rate. The standard response rate for direct mailing campaigns is three quarters of a percent. For every 1000 pieces of direct mail, expect 7 to 8 owners to reach out for more information.
Let’s say you find a list from a reputable source of 10,00 distressed property owners. Craig said that if you receive the 0.75% response rate and a majority of those responses are very interested owners, you have a great list. With great lists, he recommends sending out mailers once a month. If your first mailer, or second campaign with a good list, results in a response rate of below 0.75% and/or a minority of the owners who do respond are interested in selling, you have a decent list at best. For these types of situations, Craig recommends that you send out direct mailing campaigns once ever 60 to 90 days. Then, if you continue to see poor results, scrap that list or send out mailers on a less frequent basis, find a new one and repeat the process.
The copy is what is it you say in your mailer. The key point here is to create a copy that speaks directly to owner’s needs. Craig said, “When you’re talking to a prospect, you always want to talk about the pain points, the things that they may be struggling with … and then you can address the solution.”
If you’re mailing to absentee owners, for example, they will have renters. When formulating your direct mail copy, the theme should be about renters. They’re probably worrying about people destroying the house, failing to pay rent, turnover costs, cost of property management and other renter related headache. So, you can address their pain point by stating that you can take these problems off their hands and put extra cash in their pockets at the same time.
Once you’ve converted a few leads into transactions, another unique approach is to include testimonials in your copy. “Offer testimonials,” Craig said, “having past clients that you’ve worked with rave about you and sharing that with others. People are always convinced and encouraged when somebody else has had a good experience.”
To determine what does and doesn’t work, test different mailing campaigns. Use different letter types (yellow letter, handwritten, postcards, etc.), copies (i.e. the message), colors, etc. and track the results, ultimately getting closer and closer to the ideal mailer for your specific market and niche.
Overall, you want your copy to directly connect with the particular owner’s potential pain points, as opposed to a vague “We Buy Houses” message, and conduct tests on an ongoing basis to see what does and doesn’t work.
The offer, which will be included in your copy, is what it is you want them to do. Do you want them the call, text or email you? Do you want them to visit your website or a landing page? Do you want them to request a free report or consultation? Whatever action you want an interested owner to take, make sure it is clearly stated in your copy. And you can also test out different offers to see which ones result in the highest response and conversation rates.
For those of you who have closed on a deal as a direct result of a direct mailing campaign, what the list, copy and offer did you use?
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Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action