My Direct Mail Campaign Results Have Been Atrocious

My Direct Mail Campaign Results Have Been Atrocious

Wholesaler · San Francisco, CA · Member since 2012 · 259 posts · 147 votes

Hey There BPers,

Myself and my business partner have been spending a significant amount of time on our direct mail campaign and so far, our results have been subpar to say the least. We have sent out a total of 395 letters and received a whopping 5 responses. 1 was a prank call. 2 were of the "please remove me from your list" variety. Our one success was getting an appointment with a seller, so in reality we have had 1 good response out of 395 total letters. I'm hoping to get some insights and ideas/critiques for increasing our response rate. The details of our campaigns are below.

We have slowly been gathering addresses so our list is split up, one campaign is 149 people and the other is 246 people. We have sent the different groups different pieces to try and test what will get the best response.

The first group received a standard yellow letter stuffed inside of a handwritten (in blue sharpie) 6x9" manilla envelope (link). I also used some muscle car stamps instead of the regular American flag ones to hopefully make it seem more "friendly". Our response rate was 4 of 149. Here is a picture of the finished letter:

The second group of 246 received a different mailer altogether. We used an A6 invitation-style envelope that was handwritten in black ink. Instead of a yellow letter, we sent our message on standard white copy paper. This letter was placed in the mail on 10/19 and we've only received one phone call and one FB like from our efforts. Here is the copy:

"

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Dev HornPro Member
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
12y

Your list there is a good "core" list of houses for you guys to keep an eye on, but your list size is WAY to small to generate a meaningful flow of leads.

Buy a list of at least 1,000 ABSENTEE OWNERS and mail them postcards every month for AT LEAST 6 months.

See this reply in the discussion

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  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    12y

    One question, what category of owners are you mailing to?

  • Wholesaler · San Francisco, CA · Member since 2012 · 259 posts · 147 votes
    12y

    Oh man, can't believe I omitted that. We are driving for dollars. We drive around and find dilapidated or very outdated properties and have a VA reserach the owner information for us.

  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    12y

    Your list there is a good "core" list of houses for you guys to keep an eye on, but your list size is WAY to small to generate a meaningful flow of leads.

    Buy a list of at least 1,000 ABSENTEE OWNERS and mail them postcards every month for AT LEAST 6 months.

  • Wholesaler · San Francisco, CA · Member since 2012 · 259 posts · 147 votes
    12y

    @Dev Horn thanks for chiming in, I was hoping you would. I had previously bought an absentee owner list from Listsource at the beginning of the year and sent 5 different mailers to that list (896 was the original count), but stopped that campaign after my response rates continued to drop and drop after each subsequent mailing. I sent 2 yellow letters, 2 regular letters and 1 postcard dripped out over 7 months. Do you have any recommendations as to either the criteria you would use to build the list or the type/message of postcard?

    Also, as far as my current list, I know it's small, but I have another 250 or so addresses being researched by my VA. The hope is to grab 250/week until I've driven my entire farm area. I know some of the sentiment around here is to just get your marketing pieces in the mail, but I'd like to do some level of testing to see what works before significantly ramping up my direct mail campaigns.

    Finally, the main reason we are doing this is our thought process was that Listsource is available to any Tom, Dick or Harry out there whereas our list would be complied ourselves and target obviously distressed properties. Not sure if that is right or wrong, but that was our thought process. Appreciate the insight!

  • Investor · Hopewell Junction, NY · Member since 2013 · 153 posts · 58 votes
    12y

    "Finally, the main reason we are doing this is our thought process was that Listsource is available to any Tom, Dick or Harry out there whereas our list would be complied ourselves and target obviously distressed properties."

    True- and the houses you are mailing to are on that list... that Tom, Dick and Harry are using.

  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    12y

    One big issue you have is you live in California and the response rates are lower out there compared to other markets, which we assume is related to the greater competition there. I was talking to a CA investor last night who agreed that they'll need to spend $10,000 a MONTH, minimum, to play this game in the LA market (where we are already spending $8K per month). I think SF is very similar. You have big players willing to spend the big bucks because they can make $50K+ on a single flip, Here in TX we might have to do 2 to 5 deals to net that. So, I'm just saying, you're in a tough market. But one where the profit can be substantial.

    I'm not actively marketing in SF, but in LA we're definitely seeing results from absentees, and we are using the Listsource data. So I'm not sure why you didn't see better results from your prior campaigns. You might want to revisit the criteria you used for your list, of the messaging in your direct mail.

    I don't see fault in your efforts to create the list of distressed properties that you guys have found. I just don't think that scales up to the size of business that I imagine that you want. Marketing is like a funnel so if not enough is coming out at the bottom, you need to throw more prospects in the top and make sure the filters are right so the good leads come thru the funnel. Whether it's absentees, or pulling county data and applying intelligent filtering to that data, you can find other ways to increase your target group. I really think that's your biggest issue - you just need to be getting your message to a lot more people who are in a group that is more likely to respond to the motivated seller message.

    Wish you the BEST @Brandon Foken !!

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    The letter is way too long.

    If you have ever watched celebrities they practice communication in a clear and short way as possible. Watch interviews and answers some time.

    The letter being long trying to explain everything to sift out the serious sellers is a mistake in my opinion.

    Over the years I do commercial real estate but used to do the owners heading into foreclosure etc. What most want is a very short to the point letter maybe a few sentences stating what you want to do and how to reach you. The mailers have a snow ball effect where only a small percentage might respond right away and the rest it might be in 6 months or 1 year from now or never.

    You want to get in front of them or on the phone to actively interact with them versus a passive letter. The passive letter isn't the place to go over all these options or what will happen etc.

    LESS is MORE. If you are direct and to the point they will want to contact you more. If you go on and on they will figure you will be difficult to deal with.

  • Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    12y

    I agree with Joel that the 2nd letter seems way to long.

    I think a lot of people won't read it all and those that do could just be a little overwhelmed with all the info.

    The yellow letter looks pretty standard for that type. You won't stand out but it seems to be in line with what people say works well.

    I'd actually love your results. I have sent out 1830 Postcards so far this month and have gotten exactly one pissed off guy asking me to take him off the list. Dropped another 660 today so pushing forward!

  • Real Estate Investor · Oklahoma City, OK · Member since 2009 · 71 posts · 21 votes
    12y

    @Shaun Reilly, wow that is a large list to not have any responses. Hopefully your 600 will have a much better rate. I'm still testing my latest post cards. My yellow letter response rate was good but lots of tire kickers and no motivation. I just mailed 175 postcards.

    @Brandon Foken Good luck, you will get it right. I agree that the 2nd letter is long as well. I have changed my marketing a bit to say exactly what I do and how I can help them. Direct and to the point of just how I can help.

  • Wholesaler · San Francisco, CA · Member since 2012 · 259 posts · 147 votes
    12y

    Thanks for the replies, everyone.

    @Dev Horn after reading your input, I came to the realization that both campaigns involved lengthier marketing copy. (I guess I had been reading too much from Dan Kennedy). My business partner and I are meeting tomorrow to buy some leads from Listsource and get a campaign going off of those. I have been looking at yellowletters.com and their zip letters; what service do you use for your postcards?

    @Joel Owens thanks for the input. I had taken the idea of using longer marketing copy some from reading Dan Kennedy's book and also from the @Sharon Vornholt blog. I got a few sample letters from signing up for her mailing list and assumed that the longer letters were working for her and that would be best for my market. Anyways, thanks for the great advice. I'm going to write-up some new marketing copy today or tomorrow and post it back here to help others and get some critiques.

  • Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    12y
    Originally posted by Scotty Hamill:
    @Shaun Reilly, wow that is a large list to not have any responses. Hopefully your 600 will have a much better rate. I'm still testing my latest post cards. My yellow letter response rate was good but lots of tire kickers and no motivation. I just mailed 175 postcards.

    I am surprised at HOW bad the response has been thus far.

    I don't at all think that the piece is optimized but you still figure I would have gotten a few more tire kickers looking for retail and more POed people asking to get off the list.

  • Los Angeles, CA · Member since 2013 · 44 posts · 15 votes
    12y

    @Brandon Foken

    1 solid response after 400 letters is a tough pill to swallow. That is discouraging for a guy like me who is beginning to get a marketing campaign going in a similar arena (Los Angeles) using your tactic (driving for dollars). Keep us updated on any new approaches and how it ends up working out for you. Good luck!

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    12y
    Originally posted by Brandon Foken:
    I'm going to write-up some new marketing copy today or tomorrow and post it back here to help others and get some critiques.

    Hi Brandon,

    I use a series of 4 or 5 letters that have proven very effective. Each letter builds on the one before, but they're still short, sweet and to the point. In almost every case, the campaign starts out with a pretty high response rate (I know there are a lot of you out there that despise the "extraneous" calls, but I've learned to monetize them, so I actually welcome the high call volume).

    As the campaign continues, the call volume drops and the call quality goes up. I have extended that cycle out to 6 weeks before, and the trend continues, but usually no more than 5 before I refresh my list and start over. Start over with pretty much the same list and back to letter number 1.

    Now call volume is pretty level, and call quality remains high. But it's like @Dev Horn and most others who have been around the block a few times will tell you, you have to be persistent and just walk this out. 6 Months minimum.

    It is so freakin hard in the beginning because it feels like you're just throwing your money away. But when you come through to the other side, and learn to trust your marketing and know that the phone will ring again....well, then you'll be coming back here and telling every one that you have to be persistent, consistent, and stick with it a minimum of six months.

    As for Post Cards, just because the price tag is small doesn't mean they're cheap. ROI is the only true measure.

  • Investor · Tinley Park, IL · Member since 2008 · 65 posts · 27 votes
    12y

    I agree Jerry with your opinion about post cards.

  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    12y

    We only use postcards for normal contact with farm area. They are vivid and succinct, and generate strong brand recall. For our type of marketing, they work well and the price per address per touch is right.

    We use letters for more delicate or complicated scenarios, such as probate or marketing to multi-family owners. My problem with letters is they cost us over a buck to have a vendor send a letter with a First Class stamp on it (which helps it not to look like junk mail). For a buck, I can touch a prospect twice with a postcard. That difference is huge at the volume that we're doing.

    I haven't used them yet, but I really like those ZIP LETTERS that Michael Q's doing at YellowLetters.com. I bet those get opened.

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    @Brandon Foken

    Your results are not that bad. Industry standards are often 1% response rate. The secret is you have to send out thousands.

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    12y

    This is a long thread but here are my thoughts.

    Letters should be no more than one page long. I think that you want to get to the point with your letter. It should be written with the attitude of "what's in it for me" for the seller. Like some of the others, I use white letters for my probates. I use postcards for absentee owners. In some areas, yellow letters work well for folks. You have to test what works in your area. But if folks are getting the same standard letter from a dozen folks, you won't stand out in a market by doing this. You need to be able to differentiate yourself.

    I would never show any seller my numbers. How in the world are you going to explain why they should give you a big discount so you or your end buyer can make a sizeable amount of money? Just say this is my offer based on what similar houses are selling for, the amount of work needed etc. Let it go at that.

    Driving for dollars is one strategy that works for some folks. It never worked well for me. There is no way of knowing if these folks are motivated, if they are 100 percent financed, or setting down any criteria at all.

    Finally, in one of my posts here on BP I have some statistics. Statistically, you will get most of your "deals" at the 5th mailing or beyond. You just have to keep plugging away. A good list is essential for success.

    Sharon

  • Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    12y
    Originally posted by Jonathan La Rosa:
    @Brandon Foken

    1 solid response after 400 letters is a tough pill to swallow. That is discouraging for a guy like me who is beginning to get a marketing campaign going in a similar arena (Los Angeles) using your tactic (driving for dollars). Keep us updated on any new approaches and how it ends up working out for you. Good luck!

    You have to have a thick skin.

    As David pointed out 1% is a common response rate. In reality his response was better since he was contacted by 5 people on 395 letters. Only getting one viable lead isn't really off either.

    I said in an earlier comment that I had put out over 1,800 with only one call from someone to take him off the list. What did I do? I increased the number of pieces I had out there by 36% today! This is also my first touch and expect that to go up as I sent more. It is to early to send those 1st 1,800 another piece so I sent 660 new people a low probability first piece since maybe I'll get calls off it but now I have a much bigger list to send my 2nd, 3rd, 4th, 5th and 6th pieces to in the future.

  • Los Angeles, CA · Member since 2013 · 44 posts · 15 votes
    12y
    Originally posted by Sharon Vornholt:
    This is a long thread but here are my thoughts.

    I would never show any seller my numbers. How in the world are you going to explain why they should give you a big discount so you or your end buyer can make a sizeable amount of money? Just say this is my offer based on what similar houses are selling for, the amount of work needed etc. Let it go at that.

    I am new to marketing, but I did ponder about this very situation earlier today and how I'd approach a seller. In my market, I think this is definitely something that would need to be discussed when negotiating with a seller. I say I think because I have not yet begun my marketing campaign, but here is my rationale: The 1200 sq.ft homes built in the 40's and 50's across the street from where I live run about 800k starting and will definitely need work. Any Joe Shmo can go online nowadays and get a ballpark of what their home is worth, so how is a seller not going to bring up a six figure difference in price between what Zillow is showing and my offer? I think each market is different and what will work in one wont necessarily work everywhere else.

  • Los Angeles, CA · Member since 2013 · 44 posts · 15 votes
    12y
    Originally posted by Jonathan La Rosa:
    Originally posted by Sharon Vornholt:
    This is a long thread but here are my thoughts.
    I would never show any seller my numbers. How in the world are you going to explain why they should give you a big discount so you or your end buyer can make a sizeable amount of money? Just say this is my offer based on what similar houses are selling for, the amount of work needed etc. Let it go at that.

    I am new to marketing, but I did ponder about this very situation earlier today and how I'd approach a seller. In my market, I think this is definitely something that would need to be discussed when negotiating with a seller. I say I think because I have not yet begun my marketing campaign, but here is my rationale: The 1200 sq.ft homes built in the 40's and 50's across the street from where I live run about 800k starting and will definitely need work. Any Joe Shmo can go online nowadays and get a ballpark of what their home is worth, so how is a seller not going to bring up a six figure difference in price between what Zillow is showing and my offer? I think each market is different and what will work in one wont necessarily work everywhere else.

    Read this and thought it sounded a little wafty, so I just wanted to clear up that I live in a one bedroom apartment and not in a million dollar house.

  • Rental Property Investor · Buffalo, MN · Member since 2010 · 511 posts · 92 votes
    12y

    @Brandon Foken great feedback from others.

    I would add another type of list to your marketing so you can build up your numbers some. Or do some other type of marketing to pull in leads at the same time.

  • Rehabber · Minneapolis, MN · Member since 2013 · 32 posts · 4 votes
    12y

    @Dev Horn When you said: "you need to throw more prospects in the top and make sure the filters are right so the good leads come thru the funnel.

    Can you please explain the filters you are mentioning

    Thanks Devon

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    12y

    @Account Closed -

    You have to remember that you are an investor and you are looking for a motivated seller (not just a seller); one that will accept your offer. In most cases the property will need a lot of work otherwise the seller would just list it on the MLS.

    Not everyone is your target market. Most people will say no to your offer. Your offer should always be based on the numbers, but no retail buyer will ever accept your formula or your figures. Simply put, they will think you are ripping them off; they are not investors that understand the true cost of this business.

    They also don't understand that any rehabber that is risking their money on a project wants to be assured that there is a decent profit to be made. Don't assume everyone won't accept your offer. I buy houses all the time at 50% of the ARV and I'm sure most other investors on this site are also doing that. But you have to find the right motivated seller.

    You can expect to make as many as 20 offers before you get a "yes". That's is the industry standard. Now I have gotten deals after making only a few offers so that does happen. That's why it is so important to have a highly targeted list.

    You know what they say; "If you're not embarrassed by your offer you just offered too much".

    Sharon

  • Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
    12y

    What a great conversation.... How many threads have

    @Dev Horn , @Sharon Vornholt and @Jerry Puckett all typing about marketing.

    Cool Potatoes.....

    @Brandon Foken

    I don't think youre doing anything wrong. Youre just not doing enough of it and repeating fast enough. Your Yellow Letter, if using blue (YUCK), don't use a sharpie and drop the envelope style... and use regular stamps... Youre over thinking it way too much.

    Your second letter is fine for a typed variable letter, however make certain you dress it up a little. Style and a good layer of make up go a long way... Make certain that you underline and bold correctly and that your calls are first and third in your flow. Close with urgency.

    Vary your approach... Mix up your pieces however in my opinion keep the message the same per piece type. People don't see and respond until they have the need to...

    Lets talk driving for dollars. I am not a bandit sign person however I would stick one right in the front yard of an abandoned house all day long to find the seller... If they can be found the sign will do it. The other thing I would do is knock on the 5 doors around the subject property and ask a few pointed questions...

    Also you have to keep in mind that some of the properties are owned by pac rats and hoarders... They cant sell. Some want to but there's something keeping them from selling... And it isn't the house...

    We all have to keep in mind that our type of marketing doesn't create motivation it cures motivation. Which is why we have to keep hitting the prospect and be there when they have the need or the original marketing dollars were a waste.

    Lastly I wouldn't worry nearly as much as you are about Tom Dick and Harry. You cant buy them all and frankly with NAR spending huge amounts of money on propaganda promoting the conventional method of real estate transactions we need our peer group.

    Okay one more last thing... Take a piece of paper, any color, write on it;

    call me at 555-1212 I have a check made out to you for this address... Wad the paper up, flatten back out and mail it....

    My point is that it doesn't matter at the end of the day what we send as long as our message hits and sticks... And we don't stop..

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    12y

    @Michael Quarles

    @Michael Quarles

    @Michael Quarles Lets talk driving for dollars. I am not a bandit sign person however I would stick one right in the front yard of an abandoned house all day long to find the seller... If they can be found the sign will do it. The other thing I would do is knock on the 5 doors around the subject property and ask a few pointed questions..."

    You are right about asking the neighbors about the house. They often know where to find the seller. Putting a bandit sign in the yard almost always get's the "missing seller's" attention.

    Secondly - When you said:

    "Okay one more last thing... Take a piece of paper, any color, write on it;

    call me at 555-1212 I have a check made out to you for this address... Wad the paper up, flatten back out and mail it.... "

    This is a great idea! Anyone driving for dollars should implement this today.

    Sharon

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