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:

"

21Reply
3,267 views

Most Popular Reply

Dev HornPro Member
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
13y

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

364 Replies

Jump to latestLatest
  • Los Angeles, CA · Member since 2016 · 63 posts · 2 votes
    9y

    Ive used PPC extensively for many years , Ive read extensive info on it and feedback,

    its very expensive and only works on very large budgets , like 100,000 + per year,

    otherwise it will drain you money and provide very low quality leads

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    I would like to add something here.  Direct mail is a long term strategy.  Something like 81% of your deals statistically will come at or beyond the 5th mailing. Does that mean you won't get a deal before the 5th mailing? Not at all. You will build momentum in time, and most other investors will either mail sporadically or quit after a few times.

    You need to mail everyone, every month.

    My motto is to mail every month until I buy the house, someone else buys the house or they come off the list for some reason.

  • Syndicator · Austin, TX · Member since 2014 · 85 posts · 47 votes
    9y
    Originally posted by @Sharon Vornholt:

    I would like to add something here.  Direct mail is a long term strategy.  Something like 81% of your deals statistically will come at or beyond the 5th mailing. Does that mean you won't get a deal before the 5th mailing? Not at all. You will build momentum in time, and most other investors will either mail sporadically or quit after a few times.

    You need to mail everyone, every month.

    My motto is to mail every month until I buy the house, someone else buys the house or they come off the list for some reason.

    Sharon, my question about that is how to do you keep your listed updated with the properties that are sold to someone else? I can see that on tax records or MLS, if it was listed, but how do you do that for a whole database of addresses? Any tips on that topic?

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    One name at a time for probates @Brad Shepherd.  List services can scrub one list against another for changes.  I wish there was an easy button but there just isn't.

  • Syndicator · Austin, TX · Member since 2014 · 85 posts · 47 votes
    9y

    I was afraid that might be the answer! Makes sense. Thanks for the quick reply. 

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    You're welcome @Brad Shepherd.

  • Ellenwood, GA · Member since 2016 · 70 posts · 10 votes
    9y

    Question about yellow letters... Why yellow?

  • Flipper/Rehabber · Virginia Beach, VA · Member since 2016 · 34 posts · 27 votes
    9y

    Speaking of atrocious direct mail results... I'm in Virginia Beach, VA check out my results below. I'm mailing yellow text postcards from @Michael Quarles talk about, but I'm really surprised by the lack of response I'm getting.

    Owner occupied, 50-100% equity, ownership of 12+ years, 2-4 bedrooms, tax assessed value < $215k, homeowner age over 45. This list came out to about 2500 addresses. Each mailing has been about four weeks apart.

    1st mailing: received eight calls. Two were interested in selling, six wanted me to stop mailing them. No deals from the two interested sellers.

    2nd mailing: received four calls. Three of them asked me to stop mailing them. One is a subject to deal I might buy but still negotiating the terms with the seller.

    3rd mailing: received two calls. Again each of them asked me to stop mailing them.

    4th mailing (switched to orange postcard): received zero calls.

    5th mailing: planned for the beginning of January.

    Second list I'm mailing - Absentee owners (in and out of state), 40-100% equity, ownership of 4+ years, tax assessed value of < $215k, 2-4 bedrooms. This is about 1280 addresses, mailing once per month.

    1st mailing: zero calls.

    2nd mailing: zero calls.

    For my next mailing I will be switching up the mail piece for each list. I'm open to the group's thoughts/suggestions.

  • Investor · Virginia Beach, VA · Member since 2013 · 84 posts · 26 votes
    9y

    @Jason Runkle - Virginia Beach is a highly sought after city. Lots of competition, lots of affluent (or at least non-distressed) home owners. For direct mail to get results, the recipients need to be in some form of distress. Non-distressed sellers do not sell for 50-60% ARV...only distressed ones do.

    It's possible that you are fishing in a pond that has very little fish interested in your bait. On top of that, there's a ton of experienced fishermen already there alongside you...competing for the same small number of fish that may bite.

    There was a podcast a while ago (sorry, can't remember which one) where the guest spoke about dumping money into direct mail in her city in So Cal with no results for months after months. In her experience, there wasn't enough distress in that city for the direct mail to work like it did back in 2010. She switched her target cities, kept mailing, and deal flow picked back up.

    Don't give up on mail, but you might consider targeting neighboring cities instead of exclusively VB.

  • Flipper/Rehabber · Virginia Beach, VA · Member since 2016 · 34 posts · 27 votes
    9y

    @Thomas Fortune

    Thanks for the feedback. I remember exactly which podcast you're talking about because I was considering the guest's lesson when I was building my list but I think I went the hard way. I thought focusing on the homes under the median with longer home ownership I could produce the seller leads of the longtime owners who never updated and/or looking to downsize/retire. You're right, Virginia Beach is a pretty stable city, low crime rate, has a good economy, and not as much distress as some of the other cities in Hampton Roads.

    I might be throwing good money after bad but at this point I think I need to stick it out until the seventh mailing and then re-evaluate my lists and target market, if I haven't produced any positive net cash flow from it.

  • Newport News, VA · Member since 2016 · 42 posts · 19 votes
    9y

    I started a small campaign on the peninsula a month ago with hand written letters and have received at least 5 calls per mailing (50 letters). All of which were hand written, both letter and envelope. This is extremely time consuming and I can't keep doing this forever if I want to expand to a larger list, however the response rate is amazing. 

    I haven't made any deals, however I do have two in negotiation. The majority of people were tire kickers, but almost all of them had been mailed  by many people. Several people told me that the only reason they replied to mine over the generic printed postcards, was because mine were hand written and felt personal. 

    Just my .02

    Good luck

  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    9y

    I was going to make the point Thomas made - very competitive market there.  And in many of the larger competitive markets where home values have steadily rose for several years, sellers are not responding very well to direct mail.  My bet is just too many people doing it, saying the same things, hitting the same lists, perhaps with the same piece.  Homeowners are calling you to get taken off the list probably because they assume you are the same guy sending all the other postcards as well.

    As far as lists go, owner occupants with high equity is a tough list right now.  Motivated sellers are like needles in a haystack in that list.  And your competition all knows about mailing to absentees (which is my favorite list, but super competitive now).

    In 2017, rising interest rates could cool demand a little, and then I think home values will start to level out. But there will still be seriously low inventory in many (or most) U.S. markets - too many buyers, not enough sellers. So sellers have less motivation to take a discount, and they can also sell their home pretty quickly on the MLS. So there are some macro-economic factors at work with supply and demand, and some micro-economic challenges in regard to local competition.

    Here you can see what I'm saying in your local market - inventory dropping, prices rising, days on market getting shorter:

    (Source: http://marketminute.longandfoster.com/Market-Minute/VA/Virginia-Beach-City.htm)

    Does this all mean that direct mail - or real estate investing, in general - just doesn't work right now?  Not at all. What it tells us is that we must be innovative in our marketing. If you're going to do direct mail, do something different with it or it will get lost among the others that people receive. Say something different. Perhaps mention that days on market is still 60 there, whereas you can close in 6. Hire someone off Fiver to develop a unique mailer and/or logo for your business. Think about an offer that sounds bigger than it really is, such as "Receive a New iPad if We Buy Your House!" (high perceived value promotion but the "prize" only goes to people who sell you their house, presumably at a good discount to ARV - repairs).

    That's my challenge to you guys in 2017 not just for direct mail but for your marketing in general - THINK DIFFERENT, BE DIFFERENT.  Your market does not investor number 3,714 saying & doing exactly the same things.  It needs people who can solve problems in unique and valuable ways.

  • Flipper/Rehabber · Virginia Beach, VA · Member since 2016 · 34 posts · 27 votes
    9y

    @Michael Snead

    I've done yellow letters in the past, and like you, have received the usual responses of anger, curiosity, tire kickers, and some leads. One good thing about yellow letters is they get the phone ringing and create opportunity to talk to and negotiate with potential sellers. Thanks for sharing your experience.

    @Dev Horn

    Thank you for the market insight and marketing ideas. I will be trying something like you suggested with  the iPad or similar enticement on my next mailing. I understand what you mean by doing something different because when I was at the seller's house, who I'm negotiating the sub2 with, I noticed another investor's yellow postcard. Although I didn't see it up close, it was the same color and size, and I'm assuming it had similar language like mine.

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    I think the problem is in the list. 

    First of all - owner occupied. What's their motivation?  Homeowner over 45?  What's their motivation?

    I would look for folks that are potentially motivated sellers.  Out of state absentee owners, probates, someone losing their home and other niches where they might need to sell.  

  • Real Estate Agent · Virginia Beach, VA · Member since 2016 · 29 posts · 24 votes
    9y
    Personally I I only get decent responses from lists of 1,000 or greater with quarterly repetition. Specialize in an area and exhaust it. I still get the occasional call from a letter I sent out years ago. Post cards work just fine and personally like to keep messages short and sweet with a website to lead them to.
  • Flipper/Rehabber · Virginia Beach, VA · Member since 2016 · 34 posts · 27 votes
    9y

    @Sharon Vornholt Thank you for your feedback. I don't disagree with you, I'm inexperienced in direct mail and marketing. However, I went with the owner occupied list because I've heard many professional wholesalers and investors promote it as just as fruitful as their absentee lists. Now I feel like I need to finish it out to seven mailings...

    One thought behind the list is older couples or individual homeowners whose kids are out of the house need or want to downsize, with time capsule homes (haven't been updated since they bought it) and they don't want to pay to fix it up or go through the process of selling with an agent.

    The other thought is owner occupants also get tired of their homes and have life changing events, motivating them to sell at a discount from as-is value.

    @Doug Van Liew Thanks for sharing your experience. Besides the list, I think I'm looking too much like other investors in the market with my postcards. For my next mailing I'm going to do something different to stand out.

  • Ronse, Flanders · Member since 2017 · 2 posts · 0 votes
    9y

    I am working for a real estate investor that does direct mail campaigns in Florida. Are there any specific direct mail companies you use (primarily for mailing out postcards, as opposed to letters) and what are your reasons for using them?

  • Wholesaler · Port Richey, FL · Member since 2013 · 76 posts · 40 votes
    9y

    I can't read through all 293 replies, so I can only go off your OP, and based on that, here's my crash course-

    #1 Go read anything you can find by Dan Kennedy.
    #2 This is a numbers game and your sample size is insignificant for getting real data, though, your response rate isn't bad at all based on that.  Plan on mailing out at least 1,000 pieces before you can even begin to start measuring response and conversion rates. 
    #3.  The money is in the follow up.  I mailed out 7-11 letters per prospect.  (Because everything changes with time and circumstance.) *Again... Dan Kennedy.

    Even below average copy will convert at .05% if the market is targeted. Response and conversion rates go up according to several factors:  the targeting, the copy, the timeline of the prospects problems and associated emotions... 

    Shoot me a PM if you want and we can exchange numbers and I'll give you a call and walk you through more. 

  • Austin, TX · Member since 2015 · 223 posts · 185 votes
    9y

    Is cold calling your direct mail list beneficial?

    Please see my most recent post on this matter in the forum and feel free to share your experiences! 

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    One thing to remember here is you need to be mailing sufficient numbers of mail pieces to your lists to get the results you need.

    Direct mail nationally has been at a 1-2% response in my area for quite a while now.  Looking at the numbers, if you mail 1000 pieces you could reasonably expect to get 10-20 calls on that many pieces in time.

    It may take 20 calls to get 2-3 potentially motivated sellers to get one deal.  That's assuming you have enough experience to get it under contract.

    It is really competitive now.   Remember that just over 80% of your DEALS will come at or beyond the 5th mailing.  

    Just about everyone is complaining about AO's now.  Try probates or other niches to mail to.

    You need to have 3 - 5 strategies for getting leads in the door.  Direct mail in my opinion should be one of them, but it can't be the only one.

    You can always cold call any list (except probates) @Ethan Summers.  

  • Austin, TX · Member since 2015 · 223 posts · 185 votes
    9y

    Thanks for the helpful direct mail statistics @Sharon Vornholt 

    I have read statistics that most sales are closed between the 7th-12th point of contact. So I truly believe cold calling along with direct mail and email will set any investor/realtor apart again thanks for your insight. 

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    The magic number is 5 and beyond.

  • Austin, TX · Member since 2015 · 223 posts · 185 votes
    9y

     I am curious is it difficult to persuade folks on your team to contact sellers 5 or more times? 

  • Goshen, KY · Member since 2009 · 835 posts · 683 votes
    9y

    You do that by sending direct mail every month @Ethan Summers.

  • Real Estate Investor · Kalamazoo, MI · Member since 2015 · 120 posts · 37 votes
    9y

    I love that last post @Michael Quarles. 

Join the conversationCreate a free account to reply, vote on answers and follow this thread.