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The Down & Dirty On Direct Mail for Real Estate – Pros and Cons

by Mike Nelson on January 1, 2014 · 13 comments

  
Direct Mail

Direct mail marketing – nearly every real estate investor has used it, and every non-investor has come across some in his mailbox. It’s a dead art, right? It’s outdated, cliché, tacky, and definitely not efficient – or so says most of the real estate professionals in the business. Are they right?

The truth is, direct mail marketing is definitely not as “sexy” as some other tactics, but it’s definitely not dead. There might be better ways to get your message out, but if you’re not at least considering using a direct mail marketing approach for your wholesaling businesses, you’re missing out on a lot of potential sales. Here’s why:

Direct Mail Pros

Cost – Cost is a huge advantage for direct mail marketing. For around $500-$1,000 upfront, you can print a stack of mailing materials and start shipping. For some, that may seem like an inordinate amount of money, considering the start up costs of a website can be as little as $20. But consider this: Just one strong lead can pay for the cost of your direct mail marketing supplies tenfold. (And just one strong lead is very unlikely. One lead out of a thousand is a .1% response rate. You’re more likely to get at least four or five strong leads, from a conservative estimate.) You do have to spend money, but you get one hell of a return.

Familiarity – For older clients, it’s important to have something tangible in their hands. Many baby boomers and older generations check their mail daily. Some don’t check the Internet often and a small percentage don’t even have access to e-mail. For these reasons, direct mail is crucial for reaching an older population. Everyone still checks their mail daily, but older generations in particular depend on it unlike anyone else. Go where your (potential) customers are and use physical mail to get in touch with them.

Customizability – Direct mail marketing can be highly customizable. Create a single flier, a brochure, or a magazine. Direct traffic back to your website by including a website address on your ad campaign. Target a certain audience, like the elderly, or zero in on a specific need. Your direct mail campaign can place an emphasis on pre-foreclosure or people who are behind on their mortgages. Mention on your flier that you can pay in cash, close quickly, or include whatever message you need. The possibilities are endless.

Maybe the biggest advantage of all, however, is that direct mail marketing has a proven track record. Wholesalers have been using direct marketing for decades, for good reason. People are still seeing results, which is why direct mail marketing is still highly in use.

Related: How to Choose the Right Direct Mail Mailing List

Direct Mail Cons

Costs – Yes, the cost of direct mail is relatively inexpensive, and it will likely pay for itself one hundred times over. But for some, $500 or $1,000 is more than they can afford.

Effectiveness (or lack thereof) – Direct mail campaigns are only as effective as their design. Depending on the design, a mail campaign can look seductive and stylish, or it can look unmistakably like spam mail. Design it in the wrong way, and it might not get opened at all.  Direct mail marketing can be insanely effective, but your mileage may vary on this one.

Speed – Dealing with direct mail can produce problems for investors with time-sensitive offers. If you have a time-sensitive offer on a property, a tight deadline, or an open house, your direct mailing company will need to work fast to send out your campaign well before your deadline. If a mailing company sends your campaign out past the deadline of an open house (for example), your campaign obviously won’t be as effective. In addition, in an online campaign (like through e-mail), you can quickly make changes and send it out to hundreds, with just a few clicks of your mouse. Changing the information on a direct mail campaign will take more time and possibly more money. In a business where speed is important, you’re at a disadvantage with direct mail campaigns.

Using direct mail campaigns can either be a great idea or a miserable one, depending on your business goals and your clientele. But one thing is for sure – the direct mail campaign is far from obsolete. Research more about the pros and cons and decide whether it’s a good way to grow your business.

Photo: ozracing99

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{ 13 comments… read them below or add one }

Gerald Harris January 1, 2014 at 11:52 am

Great Article Mike
When I started out as an agent with a Real Estate Company in California years ago, the direct mail I would use were pieces that were not very effective. As a result my response rate was very low so my return was not that attractive at all. As I have started to learn and grow more as a real estate investor I have used more effective mail pieces that have increased my response rate dramatically. For me, mentorship has been the biggest difference in my new found real estate investing career. Duplicating the success of others who have been there and done that is key!

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Mike Nelson January 3, 2014 at 9:58 am

Thank you, Gerald. I’m glad you like it. And you said it. :) Learning from other’s success is key. Couldn’t agree more.

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Mike Nelson January 3, 2014 at 10:01 am

Thank you, Gerald. I’m glad you like it. And you said it. Learning from other’s success is key. Couldn’t agree more.

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Seth Williams January 1, 2014 at 8:01 pm

Nice overview Mike, it’s good to see you contributing to the BP Blog! Looking forward to many more good articles from you. :)

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Mike Nelson January 3, 2014 at 10:07 am

Thanks Seth. Really appreciate it. It’s an honor to be writing for BP. :)

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Kyle Zaylor January 2, 2014 at 8:04 am

Nice first article, Mike!

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Mike Nelson January 3, 2014 at 10:07 am

Thanks Kyle.

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priya January 7, 2014 at 10:22 am

Thanks for sharing about The Down & Dirty On Direct Mail for Real Estate ……..

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Mike Nelson January 13, 2014 at 9:38 pm

No prob, Priya. Hope it helped.

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Alex January 12, 2014 at 2:58 pm

A lot of agents think direct mail is a thing of the past, but in certain places the direct mail campaigns can get a large return, especially on just listed just sold. A key to direct mail is consistency, that the people you send a card out to continuously get a card and when they think of real estate, they think of your name

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Mike Nelson January 13, 2014 at 9:37 pm

Great input, Alex. Thanks.

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Immo February 11, 2014 at 2:52 am

Thanks for sharing Mike !

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Ashley March 14, 2014 at 12:41 pm

I really enjoyed your listing of pros and cons. You’re pros were all on point and I agreed wholeheartedly but your #1 point on your con list, Costs, isn’t really a con. The way I see it is that marketing is an investment and few businesses can get away with not having any kind of promotions and you’re right that direct marketing might be one of the least expensive avenues to take. Thanks for sharing!

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