Should You Send A Yellow Letter?

Yellow letters can have good response rates. In super competitive South Florida, I had response rates as high as 1.5% for hand-written yellow letters. Lead cost per response was low. No doubt, there are advantages and many have used them successfully.

I still quit mailing yellow letters. Depending on your strategies and goals, it’s worth considering whether yellow letters fit with your vision. Different strategies work for different investors, but here are my reasons for not utilizing yellow letters:

No Branding: Some investors don’t care about branding at all – there is no goal to be a known quantity in the city, county, state or country. Some investors may maintain 3 or more lead generation websites. Perhaps you’re only sending a quick 100 mails the yellow letter is a perfect fit.

The game changes if you are building a multi-funnel brand. Here’s an example. Amazon has been opening brick and mortar book stores in New York. Plainly, the future isn’t brick and mortar book stores in Manhattan. Amazon isn’t going back in time. It’s branding, advertising, and pushing online services in a memorable way.

Branding also can apply to real estate marketing. I run an overlapping campaign that combines direct-mail, Facebook, SEO/PPC, re-marketing, as well e-mail and phone contact. The mail piece is essentially the “opening salvo”. Yellow letter takes away the opportunity to showcase my logo, company name, artwork.

Professional Appearance: In a larger sense, you are branding yourself every day in every interaction. By writing this, I’m creating the impression that I am an investor that writes blogs. The same applies to your mail piece. If you’re putting your name, phone number, company on a hand-written yellow letter, you are branding yourself as a local guy down the block that wants to buy this person’s house. That may be exactly who you want to be, and if so, perception goal achieved.

Of course, you can make a yellow letter say anything, and there’s a middle ground – i.e. – instead of saying “I was driving down the block . . .” or “My wife and I want to start investing . . .” or “I have just enough money to buy 1 more house”, or whatever misleading marketing line you often see, you can draft the yellow letter professionally. One thing is for sure: if you’re in this business for the long term, as opposed to a deal or two, you should consciously control your public perception.

Response Rate Isn’t Everything: Response rate can be a bit misleading. Of course, you should track it and if nobody calls you that’s a problem. Did you know you can get the name, address, and phone number of 90% the people in the U.S. using services like BeenVerified, Intellius, the list goes on? You can get in contact with unmotivated sellers for .10/lead. Or you can get exercise, door knock, and find unmotivated leads for free! Finding people who aren’t interested in selling their house is very simple.

The trick is maximizing the reach till your mail piece lands in the hands of a person that truly wants to sell. Unfortunately, this not something I can mathematically test such as a Google Adwords campaign that randomly distribute my advertisement to the audience. I could split a list and mail two pieces, but there’s problems: (1) I can always mail more postcards than yellow letters, so I’d actually have to design a test where I mail more postcards than yellow letters; (2) people find me all sorts of ways, and I’ve been mailing for years, so a lot of times people have already received mail pieces historically which invalidates the concept of a clean test; (3) I get most of my deals 6 to 12 months down the line. I’m literally two campaigns ahead of the campaign that nets my current DMM deal. This leads me to a strategy where I want to reach as many people per dollar as possible.