5 Direct Mail Metrics Every Real Estate Investor Should Track Religiously

5 Direct Mail Metrics Every Real Estate Investor Should Track Religiously

3 min read
Marcus Maloney

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. Marcus has been named the “Equity King” for his impressive ability to find real estate opportunities with massive amounts of equity.

Experience
Marcus, a high school dropout, went from G.E.D. to M.B.A. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing.

Marcus thrives on completing successful transactions. As a young kid, his parents and grandparents faced many challenges; as a result, it made him think of ways he could help. His mother and grandmother were avid investors—not in the market but in people. Marcus was a recipient of those investments. And his early years were hard work growing up on a farm.

Marcus was a strategist at an early age. To relieve the burden of his family buying him clothes when it was time to return to school, he decided to make a small investment that paid big dividends. Marcus decided to purchase a small piglet at the beginning of summer, feed it until it became fat, and then sell it to a local farmers’ auction before the school year started. This was one of his first transactions and the beginning of his adventure of finding equity in every opportunity.

Marcus’ hard work continues today: He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. Although wholesaling provides great money, he saw the opportunity to buy some of the deals he found and convert them into cash flowing rentals.

Marcus currently holds seven rentals, two of which are commercial units. He’s also done the unimaginable and purchased a school, which was converted to a daycare center. Again, he turns what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy to increase his portfolio without any money out of pocket.

Marcus has been featured on numerous podcasts, such as the Louisville Gal Podcast, the Best Real Estate Investing Advice Ever podcast, FlippingJunkie, and many others. He’s currently a featured blogger for BiggerPockets, the largest community of real estate investors in the world.

Along with completing transactions and working to build his portfolio, he provides mentorship to aspiring investors. This is done through one-on-one interactions and through his successful YouTube channel and blog.

Marcus does utilize his M.B.A. for more than real estate. As a consultant for a successful non-profit institution south of Chicago, he uses his expertise in the development of human capital. His philanthropic efforts help existing stakeholders develop in their capacity to serve those in need of assistance.

Education
Marcus completed his M.B.A. in 2011 from Olivet Nazarene University.

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Hopefully those of you who made a real estate resolution to start your direct mail campaign have.

Unfortunately (or maybe fortunately), this post is not about your New Year’s resolution, your goals or your desires for 2016. Hopefully all of that is already laid out. If you’re following through and finally taking action, congratulations!

I recently wrote an article titled “Wholesalers: Having Trouble Getting Starting? Take This One Step Today!: After reading this, maybe you got your letters and envelopes ready and your postcards prepared to be shipped. Some of you may even be receiving calls. Now that you’ve started, have you asked yourself how you know whether your campaign is successful or not? Here are some specific metrics you need to track in order to determine if your campaign is a success or failure.

I’m sure most of you are saying, “I know my campaign is a success if I get a deal” — and yes, that is part of it and very easy to track, but if you’re not tracking these 5 metrics, you may be throwing money down the drain.

5 Direct Mail Metrics Every Real Estate Investor Should Track Religiously

Tracking is very important. I will briefly introduce you to the metrics you need to track to ensure success with your campaign. There are many more, but these will get you started.

1. Response Rate

The response rate is the number of people who called from your direct mail piece divided by the number of pieces sent. It is usually expressed in the form of a percentage. For example, if you sent 1,000 pieces and you received 10 calls, you produced a 1% response rate, which is the norm for most direct mail campaigns.

Related: Real Estate Direct Mail 101: What You Should Know Before You Spend the Money

This number is dependent upon many variables, such as the market, niche, time of year, and the mail piece itself, to name a few. So don’t get discourage if an investor in Cleveland gets a 8% response rate and you in California only get a 1% rate.

real_estate_direct_mail_101

2. Cost Per Lead

The cost per lead is essential, especially if you are using multiple lead generating techniques. The cost per lead is as stated — how much did it cost for you to generate each lead? This formula is simple to calculate. Simply divide the cost of the campaign by the number of leads. This will provide you with insight on what form of marketing is most cost effective.

Using the figures from above, if you mailed 1,000 pieces and it cost you $500 for the campaign, your cost per lead is $50. As you can see, if you are using another technique that is more affordable, you may want to devote more of your energy in the other marketing technique; however, you will still need to see what technique generates the most leads with the least cost.

3. Conversion Rate

This is an area I am really trying to develop and cultivate. The conversion rate is the number of incoming leads you can convert to a deal and close. Boom! This is a key metric because the more leads you can convert, the better return on your investment you’ll see.

The increased conversion rate can be developed by working on your negotiation tactics and having numerous closing strategies, i.e. wholesaling, lease options, seller financing and referrals. It is always good to have more than one way to close a transaction.

4. Cost Per Closed Lead

This is the cost of the campaign divided by the number of closed leads. This will simply tell you how much each closed lead has cost you. This number need to be as low as possible.

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5. ROI

Enough said with this one, right? You want this metric to be as high as you can get it.

Related: How to Get a 40%+ Response Rate on Your Next Direct Mail Campaign

By tracking these numbers, you will be able to somewhat predict the effectiveness of your campaigns. This is done over time. For example, your response rate will increase during the duration of the campaign. So the more times you contact the seller, the higher your response rate will likely be. The others will respond the same way, except for cost per closed lead, which will decrease.

The most important factor in direct mail is consistency; by being consistent, you will be able to improve upon these numbers. It’s great to challenge yourself to see how efficient you can be with your direct mail by monitoring your numbers. Remember: Measure, measure, measure and test, test, test!

I would like input on other data that should be tracked.

The more we can get in the comments, the more helpful it will be for other readers!