Real Estate Investing: Direct Mail
Direct Mail has been a staple for several successful real estate investors all across the country for years. The concept of Direct Mail is very scalable and it allows you to to get your message in front of a specific target market that may be interested in your service. When it comes to Direct Mail for real estate investors there are several different variables that will need to be tested to increase the performance of your mailings.
Although Direct Mail is a proven marketing method that produces result, many say that response rates are diminishing. If you do not have the proper systems in place to measure your direct mail results based on your testing, Direct Mail can become very expensive to the business owner. It is very easy for the newbie investor to see a high number of results, that result in no closed deals from their campaigns and think there direct mail is producing well, when in actuality there is no revenue being generated from the activity. In today's post, I want to talk about the specifics behind Direct Mail, how to get a campaign set up and how to increase your response rates when utilizing Direct Mail.
Once a plan is developed and you have determined that you would like to utilize direct mail as a medium to get in front of motivated sellers, the first step to execute your plan will be determining the lists that you are going to mail too. The list that you choose to mail too is one of the most important variables in determining the quality of leads that you bring into your sales funnel. As a real estate investor, you want to try mail lists that your competition may not have access to. This may mean doing some extra work to create a list rather than just purchasing lists from the the common list providers. For example, maybe you go down to the court house and search for probates in your market or you do some driving for dollars and look for houses that are in disrepair, maybe the delinquent tax list is difficult to get in your area and you head to assessors office to beg and plead for the list and scrub it. In direct mail, the money is in the list, so sometimes you have to do non scalable activities to get a leg up on your competition. Let's review some of the common lists that many real estate investors are mailing today.
If you are on the search for deeply discounted properties as a wholesaler, house flipper or buy and hold investor, the starting point for all lists will be high equity and or free and clear properties. With this being your starting variable, here is a list of list you can obtain to begin your mailing campaigns.
Absentee / Out of State
Owner Occupied/ Free & Clear/ Owned 15+ Years
As previously stated, you want to be as creative as possible and think which specific motivation going on in a persons life would my service help. The more creative you can get, most likely the better list you will produce!
If you are looking to purchase lists, there are several list providers out there that can obtain this information and will send to you in excel format for a cost. When purchasing lists, you have to be patient, because 9 times out of 10, your competition is mailing them too. This just means that you have to execute a little better, follow up a little better and have the best customer service to earn the business. Here are a list of some list providers that you can look into to provide you with the data from previously touched on motivations to mail too.
Once you determine which lists you initially would like to test out, you have to move on to deciding which marketing piece you will test out. As you can already begin to understand, Direct Mail is all about staying in the game long enough to test each aspect of the process to improve results over time. The marketing piece(s) you decide to use will just be another area you have to test to find the best results in your market. One of the variables that you will have to consider when deciding on your marketing piece is the cost per unit based on the marketing piece that you would like to mail. For example, a yellow letter will cost more than a postcard but will have more of a personal touch to it, same with professional letters. Consider sending these to a smaller, more personalized list such as a Probate List. Here is a list of different marketing pieces that you can test for your specific campaigns.
These are the most common marketing pieces that are being delivered by real estate investors, but as always get creative with your approach and any change you feel will result in an increased response, it is worth testing. Within your specific marketing piece, feel free to begin testing different paper colors, font colors and fonts. Real estate is very local and responses will vary from market to market.
In our current market, we are having the most success with postcards and implementing different copy/colors/styles of postcards based on the number of times we have mailed. We mail each list every 4-5 weeks and each mailer within the campaign has a different template attached to it.
No matter what marketing piece you plan on mailing out, the message that you place on that marketing piece is very important. Remember it all st with the list and we cannot create motivation, so our message should explain our service, what we are looking to do and how we can add value to the customer and always give a clear call to action to allow the customer to contact you easily. In your message, you want to explain how your service can benefit the potential lead and how easy your service makes this process for them. As real estate investors, we purchase houses at a discount for cash, provide quick closings, where the seller will not have to pay real estate commissions or additional closings costs on the sale. You need to embrace your role as a real estate investor and truly believe that you service is helpful to the right the people. Get this message in front of the right people and I guarantee you that you will be adding value to their current situation. Below are a couple examples of some of the postcards that we are currently sending out. We want our message to be clear and give direct call to action as to how the customer can get in touch with us.
CRM / Tracking
Before we send out our mailing campaigns, we need to make sure that we have our backend tracking system in place, so we know the exact performance of our campaigns. As real estate investors, we have to measure everything so we have viability on performance. We need to know clear conversion rates and response rates derived from our campaigns for our responses, leads, appointments, offers and closed deals. This will allow us to make business decisions as to which lists/ messages and pieces are producing the best results which in turn will ensure that we are spending our marketing dollars in the most efficient manner.
The CRM that we use as a business is Podio. Podio is a very customizable platform that will allow you to set up your account specific to your real estate investing needs. Podio also allows you to connect with third party platforms to create automation and allow for advanced tracking of your specific metrics. At a high level, we will utilize CallRail to produce specific phone numbers for each one of the lists that we mail to and connect our CallRail account with Podio account through Globiflow to register/track all of our responses. There are several blog posts and videos on the internet that can give you specifics as to how to get this set up for your business.
Just make sure that you have a system in place to measure and track the responses that are received from your direct mail campaign or the odds are very high that direct mail will not be a profitable marketing tool for your business. Real estate investing and marketing is a numbers game, so make sure you have clear visibility into the results of your efforts whenever you need them.
Mail Service Provider
Now that we have made a decision on our list, the specific marketing piece as well as established a CRM to track our results it is now time to get in touch with a mail service provider to have them distribute our mailers. There are several different mail service providers out there and it is your job to choose the provider who will work the current system you have in place to distribute the mail consistently, on your timeline and utilize the templates that you want to be mailed. You are also looking for a mail service provider who is competitive in pricing and whose reps are very responsive when it comes to your concerns or questions.
Over the years, we have worked with several different mailing houses and it can be difficult to find one that meets your specific needs. If anyone is interested, we are currently working with a great mail service provider, Everest Direct Mail. They are very responsive to our questions, competitive in pricing and are more than willing to learn the system you have in place to receive your requests and distribute your mailers. They also have a very quick turnaround time from receiving your request and getting the mailer to the customer.
If you would like more details on how we set up our direct mail to be delivered to our mail house provider, feel free to reach out to us at firstname.lastname@example.org and we would be happy to further explain the system we have in place to get the right lists, the right templates with the right message on a consistent monthly basis.
If there is one thing that I have learned using direct mail for the past 5 years, is that you must be consistent with your approach. As previously stated, direct mail is all about testing and iterating your lists, message and marketing pieces until you discover a series that works. If you are not consistent with your approach you will not be able to gather the data that you need to produce better results moving forward. It is also proven that your response rate improves with the amount of times that you mail a specific list. This business is built around follow up and frequency of touch rates. You need to get in front of the right person at the right time to get commitment from a seller. We see it all the time, when you mailed this person first 7 months ago, your service was not needed but 7 months later, something has happened in their life where your service is now valuable. The more often you can stay in front of sellers, the odds of closing the deal increases drastically. This is why it is not only important to be consistent with your mailings but also to be consistent with your follow up with the leads that enter into your sales funnel.
To be consistent, you must produce revenue from your marketing efforts to continue to spend in order to test and improve. We see it to often with new investors, they spend $2,000 a month on direct mail and within the first 3 months, they are not seeing results, so they give up on the medium since they ran out of marketing spend. Direct mail is a long term play and if you can stick in the game long enough, your efforts will begin to snowball. It is more important to be able to touch a smaller group of people more often then casting a huge net and touching them once or twice. Stick to your marketing budget and know what you can spend on a monthly basis for your direct mail efforts. In our opinion, you need at least 8-12 months of data to be able to make the necessary adjustments needed to improve performance within your campaigns.
Wrapping It Up
Direct mail can be a very lucrative marketing medium in your overall plan if executed properly. The key to positive direct mail results is consistency and testing. Make sure that you set a marketing budget that is attainable to be consistent with for at least 8 months before you give up on the medium. When first starting out, we do not know how are market will respond to certain mail pieces, due to real estate being so localized. Stick with what is working and continue to make adjustments, test and iterate lists, pieces and messages that are not working.