Getting The Most Out Of Your Direct Mail Campaigns
By Paul Esajian on August 4, 2014
Regardless of what stage of the business you are in, you are only as good as the leads you can generate. If you fail to focus on your marketing, any success will be short lived and you will quickly be in search of new deals. One of the ways you can jumpstart your business is with a direct mail campaign. There are many different approaches and strategies with direct mail, but the goal is all the same – to generate new leads that will eventually turn into deals. If you think that you can simply mail a list and wait for the phone to ring, you are not being very realistic. A direct mail campaign can prove very effective, but only if you do it right.
The first thing you need to establish with any marketing, but especially with direct mail, is what you are able to spend. Once you have a firm budget, it will give you an idea of what types of lists you can purchase, how often you will mail and how your letters look. There are numerous companies that sell lists ranging from distressed homeowners to owners with recent mortgage “lates.” You can narrow your list to specific towns, mortgage sizes and how many months they are behind on their loans. Your list will vary based on your budget but also what want to do with any properties after you take ownership. Too many investors spend time and money on lists that aren’t tailored to their goals and are left disappointed with the results. Before you start your direct mail campaign know how much you can spend and what your ultimate property goals are.
Once you have a list in place, you need to determine how you want to present yourself and your company. You can opt for a postcard, a traditional letter or even a brochure to attract prospective sellers. If your budget is large enough you can hire someone to write the letter for you giving them a few bullet points you want covered. You can have the best list, but if your letter and presentation are substandard you response rate will be low. Most homeowners aren’t interested in what you have done but rather what you can do for them. The best letters focus on the homeowner and how you can help them. You are trying to attract their business and not tote your investing ability. The list is important but so are the letter, envelope and overall presentation.
You shouldn’t expect to mail one round of letters and have your phone ringing off the hook. You may get a few calls after the first batch is sent but you need to be prepared to mail the same list at least half a dozen times. Most homeowners will not think about contacting you until the third or fourth letter they receive. The importance of this step cannot be stressed enough. Part of your budget should include expenses to send your list multiple times. It is the repetition that will get your phone to ring. They may open your letter and contemplate calling you after the first few times but they will finally do it around three or four. Like anything else sellers look for brand recognition and this only happens after they open multiple letters you have sent out. If a homeowner is late on their mortgage they will start receiving letters from multiple investors, just like you, looking to help them avoid foreclosure. The best way to make yourself stand out is by having a homeowner read your letter numerous times.
The most overlooked part of direct mail is having a plan in place before your phone starts to ring. You need to be prepared to deal with hopefully numerous calls every day just after your letters are sent. The person on the other end of the phone doesn’t know or care that you may have just talked to a homeowner for thirty minutes and you have three other people to call back. Each incoming call should be answered when it comes in and treated with importance. If you let your callers go to voicemail you run the risk of them not leaving a message and not calling back. When you answer the phone you have a somewhat curious homeowner ready to talk and find out what you can do. There is nothing wrong with having a small script made up or at least a few set questions to ask everyone that calls. Whatever your system is you need to have it in place before you send your first letter so you don’t waste any precious leads. The conversion rate on any direct mail is only around 3% so sheer math tells you the more leads you can get the higher chance you will have at turning those into deals.
Some direct mail campaigns are better than others. It is important to track your results so you know what works and what you may need to tweak. The best investors are the ones that are the most consistent and don’t stop marketing even when things are going good. The real estate business can change on a dime if you do not have a full pipeline of new deals constantly coming in. Direct mail is a great way to increase your business, but you need to be consistent with it and prepared for any new leads that may come your way.