Is the yellow letter worth it??
Investor · Bowie, MD · Member since 2011 · 81 posts · 17 votes
OK, I know using yellow letters is a proven good thing. But with my budget I can only afford to send out 100 per month to start (have to pay for my 100 bandit signs too). Ron Legrand said that if you cannot sent out at least 200 per week you will not see results. Well I get paid once per month and I cannot afford more right now so is 100 per month a waste of time or should I do what I can. I appreciate your advice.
Hello Derek,
First let me congratulate you on marketing irrespective of the type…
Secondly I like Troy have a slanted view point since we are both with Yellow Letter Mail businesses. He is with YellowLettersComplete.com and I own YellowLetterMail.com.
As for your question: Yes…Short of full page newspaper ad on the first page of the Sunday classified section or 30 minute TV infomercials I haven’t seen a better response rate. Problem with the newspaper ad and TV is that it is a very expensive cost to entry and it produces a lot of “Junk” calls. Whereas direct mail done right is very targeted and can deliver calls from your business model prospect. Example being, shot gun marketing ie. Newspaper, bandit signs, radio, TV, Bill boards, etc. produce calls from all demographics some of which wont fit you business model. If you’re an equity investor and don’t do shorts then the short calls are a waste of advertising dollar.
As for post cards versus yellow letters..
Post cards are great reinforcement marketing. Absolutely save the cost of a yellow letter on your third mailing. Letters 1 and 2 best be yellow letters, If you send out letters 4 and 5 they can be either two yellows or a yellow and a typed letter. Typed letters can be produced cheaper. Mail piece 6 a post card is fine.
Troy explained a little about why the post card is more expensive then the yellow letter very well so there isn’t a need in going there. But lets look at the post card as a reinforcement.
In all marketing we have a series of touches. It’s the reason Budweiser advertises at a million dollars a commercial during the super bowl telling us to drink what is in our hand. Reinforcement works and frankly is needed. No one buys on the first contact. Even the sellers who call off of the first Yellow Letter still have been touched by something to cause them to think about selling. Maybe it was a for sale sign in their neighborhood which causes two sellers to offer their home for sale within six months of being planted in the ground. Maybe it was the passing glance of a realtor magazine offering homes for sale. Something has touched them. When someone is being touched typically they must be touched 3-8 times to cause them to take action. And frankly the PC is a good touch… It just doesn’t create a call to action.
What is a call to action? A seller picking up of the telephone and calling you to buy a house. PCs are a passing touch at best however at some point when they hit the prospect at the right time they will create the call. They just don’t do it at the volume of the yellow letter mail piece for the money spent.
So why do people recommend the post card? The post card has two qualities that a yellow letter doesn’t.
1) Low cost, although just perceived, to enter a market.
2) Spend to enter the market.
Heck you can go to click2mail.com and buy a PC for .39 cents as long as you have the verbiage or jump on my site and spend .45 and use a prewritten PC. The price point makes the PC look great. However as Troy explained and although 5% is a low response rate PC are much more expensive. Then there is speed. You can order PCs and have them in the mail within 24 hours whereas the Yellow Letter Mail takes a week or less to produce…
So with all of this said let’s take about the two biggest positives of a post card over a yellow letter mail piece.
1) Extremely low cost vacant and abandoned house marketing. If you’re searching for vacant houses then use postcards only. If you’re searching for both non abandoned and abandoned then yellow letters only.
2) Cost effective media to explain how we buy which eliminates some junk calls.
With that said I think it is important to receive as many junk calls as you can however only if you plan on doing something with the information you receive. When I say this I mean weighing the value of a not now seller prospect call to a now seller prospect call.
What I mean is this; we are marketing to people who fit our investor model. If we get a call from anyone in our prospect base wouldn’t that information be valuable even if we they weren’t planning on selling today and just wanted to know how you received their information? Absolutely if we used the information to continue to touch the prospect.
I know from my research that above 70% of callers call from a cell phone. Cell phones numbers are not published information therefore I have a unique piece of marketing information someone else may not have and as long as I use it wisely I can cost affectively touch the prospect again and again.
Lets look at normal response rates and expectations of a yellow letter mail campaign.
Over the last 6 weeks I have had the following for my personal investment business. I am an investor first.
12.9% calls
3.1% people telling me that wanted to sell their home.
74% Hang-ups - I send everyone to a long voicemail to weed out the non sellers.
.5% have their house listed.
The balance were either giving me information about another house or weren’t interested in selling..
So in the big picture. For 1000 bucks I get
129 calls less than 8 bucks
31 Sellers wanting to sell their home Less than 35 bucks
5 Listed houses with motivation
90 cell numbers that I can continue to market to via text marketing, after all they are my prospect
129 numbers I could warm call monthly
If I were an Agent I would have 31 people I could buy or list fairly immediately.
Derek,
most people think that you have to mass advertise which I disagree, you have to pick a smaller list and continue to work that and be in their presence more and your results will be better. 25 letters send 4 times a month to a specific list is better than 1000 letters once every month to a bigger list. every one thinks you just need one way to do marketing, you have to always be flexible and have variety of stuff to do your marketing with to generate new blood. all business either have too much or too little business as it is never balanced, its either family or feast. you should never turn off the marketing machine and constantly be looking out to take in new business with different strategies, as your business grows you continue using marketing but get pickier who you want to take on as a client. there is no magi pill of one item for successful marketing there are probably over 30 different things to do and you must be doing all 30 to get new customers.
Ali thanks, I really appreciate your fast and detailed response. I feel better about my meager efforts now. We all have to start some where and mine is with that first deal. Now..., can you share your list of 30, because I only have a list of about 6, LOL. I would REALLY appreciate that.
Derek
Derek
It depends on the group you are targeting. If it is buyers, then Ron's suggestion is targeting suspected cash buyers and not a more targeting list. Hence having to send out a minimum of 200. I don't recommend that approach. A list if 6 is a good start. Maybe that list can add 6 who can add 6 and so on.
Derek--
Just did my Qt. review of marketing costs & rank in terms of good leads. My best lead generator is bandit signs. Hope that helps.
Thanks Dave and Mike. Dave, I was going to by a list of absentee owners in a particular area here in Maryland. I am starting with wholesaling so that I can get a cash infusion (and not need any money). And I am looking for Sellers, not buyers...although they are equally important to me. Mike, I am definitely going to buy 100 bandit signs tomorrow. My plan was to put out 25 bandit signs each week in my target areas AND send out 100 letters to my list. I placed an ad on craigslist and I built a site. Can you guys suggest any other guerilla tactics (meaning low cost)?
I'm making a switch from letters to 4x6 postcards. Letters just cost too much.
Check out the pricing for postcards - http://www.overnightprints.com/postcards
This is just for the print, you can find a local direct mail house to mail them for about .27 a piece.
Letters for me =
.11 cents envelope
.10 Letters
.44 Stamp
= .65 (aprox) per letter
+a lot of time stuffing and stamping them.
Over 2,500 mailers that's
$800 for postcards
$1625 for letters
I would bet you would get a better response rate mailing postcards twice then mailing a letter once. And save a lot of time!
I'm going to track my response rate, I'll keep you posted.
Thanks Donovan, I definitley want to track how this works out. I keep hearing so much about yellow letter vs. postcards. Please keep me informed.
Derek
Industry average response rate on postcards is less than 1%, while the average response rate on handwritten yellow letters is between 5% and 15%, depending on the list, area, computer font vs real person's handwriting, etc.
Postcards can work, but it will usually take a lot more postcards to generate the same number of responses as yellow letters. Instead of focusing on the front end cost, think about the true cost of the marketing.
For example, say you spend $1000 to send out 2000 postcards and you get a 1% response, which would be 20 phone calls. That's a cost of $100 per phone call. Then think about spending the same amount for let's say 500 yellow letters with leads, and if you get just a 5% response that would be 25 calls, which comes to $20 per call. If you get a 10% response that would be 50 calls and $10 per call. Would you rather spend $100 per call, or $20?
I think what ou may be referring to with 200 letters per week is that whatever marketing you choose to do, doing it consistently will give you the best results. Starting with what you an afford can get you going, and then you can build from there as your budget grows.
Yea, especially when you're trying to sell yellow letters.
now, now Donovan, LOL!
Hello Derek,
First let me congratulate you on marketing irrespective of the type…
Secondly I like Troy have a slanted view point since we are both with Yellow Letter Mail businesses. He is with YellowLettersComplete.com and I own YellowLetterMail.com.
As for your question: Yes…Short of full page newspaper ad on the first page of the Sunday classified section or 30 minute TV infomercials I haven’t seen a better response rate. Problem with the newspaper ad and TV is that it is a very expensive cost to entry and it produces a lot of “Junk” calls. Whereas direct mail done right is very targeted and can deliver calls from your business model prospect. Example being, shot gun marketing ie. Newspaper, bandit signs, radio, TV, Bill boards, etc. produce calls from all demographics some of which wont fit you business model. If you’re an equity investor and don’t do shorts then the short calls are a waste of advertising dollar.
As for post cards versus yellow letters..
Post cards are great reinforcement marketing. Absolutely save the cost of a yellow letter on your third mailing. Letters 1 and 2 best be yellow letters, If you send out letters 4 and 5 they can be either two yellows or a yellow and a typed letter. Typed letters can be produced cheaper. Mail piece 6 a post card is fine.
Troy explained a little about why the post card is more expensive then the yellow letter very well so there isn’t a need in going there. But lets look at the post card as a reinforcement.
In all marketing we have a series of touches. It’s the reason Budweiser advertises at a million dollars a commercial during the super bowl telling us to drink what is in our hand. Reinforcement works and frankly is needed. No one buys on the first contact. Even the sellers who call off of the first Yellow Letter still have been touched by something to cause them to think about selling. Maybe it was a for sale sign in their neighborhood which causes two sellers to offer their home for sale within six months of being planted in the ground. Maybe it was the passing glance of a realtor magazine offering homes for sale. Something has touched them. When someone is being touched typically they must be touched 3-8 times to cause them to take action. And frankly the PC is a good touch… It just doesn’t create a call to action.
What is a call to action? A seller picking up of the telephone and calling you to buy a house. PCs are a passing touch at best however at some point when they hit the prospect at the right time they will create the call. They just don’t do it at the volume of the yellow letter mail piece for the money spent.
So why do people recommend the post card? The post card has two qualities that a yellow letter doesn’t.
1) Low cost, although just perceived, to enter a market.
2) Spend to enter the market.
Heck you can go to click2mail.com and buy a PC for .39 cents as long as you have the verbiage or jump on my site and spend .45 and use a prewritten PC. The price point makes the PC look great. However as Troy explained and although 5% is a low response rate PC are much more expensive. Then there is speed. You can order PCs and have them in the mail within 24 hours whereas the Yellow Letter Mail takes a week or less to produce…
So with all of this said let’s take about the two biggest positives of a post card over a yellow letter mail piece.
1) Extremely low cost vacant and abandoned house marketing. If you’re searching for vacant houses then use postcards only. If you’re searching for both non abandoned and abandoned then yellow letters only.
2) Cost effective media to explain how we buy which eliminates some junk calls.
With that said I think it is important to receive as many junk calls as you can however only if you plan on doing something with the information you receive. When I say this I mean weighing the value of a not now seller prospect call to a now seller prospect call.
What I mean is this; we are marketing to people who fit our investor model. If we get a call from anyone in our prospect base wouldn’t that information be valuable even if we they weren’t planning on selling today and just wanted to know how you received their information? Absolutely if we used the information to continue to touch the prospect.
I know from my research that above 70% of callers call from a cell phone. Cell phones numbers are not published information therefore I have a unique piece of marketing information someone else may not have and as long as I use it wisely I can cost affectively touch the prospect again and again.
Lets look at normal response rates and expectations of a yellow letter mail campaign.
Over the last 6 weeks I have had the following for my personal investment business. I am an investor first.
12.9% calls
3.1% people telling me that wanted to sell their home.
74% Hang-ups - I send everyone to a long voicemail to weed out the non sellers.
.5% have their house listed.
The balance were either giving me information about another house or weren’t interested in selling..
So in the big picture. For 1000 bucks I get
129 calls less than 8 bucks
31 Sellers wanting to sell their home Less than 35 bucks
5 Listed houses with motivation
90 cell numbers that I can continue to market to via text marketing, after all they are my prospect
129 numbers I could warm call monthly
If I were an Agent I would have 31 people I could buy or list fairly immediately.
Derek,
Not sure on your time available, but in my marketing I do a form of yellow letters that I tape on the glass of the front door. I actually pay someone to do it, but if you did it yourself, you can do about 100 in 5 or 6 hours.
You will spend about 5 bucks on printing and 10 bucks in gas.
I get HUGE responses and it is super cheap!!! :mrgreen:
Derek,
It all depends on what the yellow letter says versus what the postcard says.
Many yellow letters just say we want to buy your house and is not very qualifying and of course everybody calls and the response rate appears to be higher.
I think both postcards and letter have their place since some people are more visual and like the post cards and some like to read all the details and like the letters.
Personally, I alternate letter and postcards every two weeks for about 4-6 mailings total.
Hope that helps,
Randy Rodenhouse
Wealth Black Box
@Mike, thank you sir, I really appreciate you taking your time to give such a detailed response.
@ROb, than you also, I would like to know more about this marketing method. I will try anything and I will make the time.
THanks, Derek
I just finished a conversation with Rob regarding the way he uses the Yellow Letter Mail piece in his business and I only have one thing to say.
Great Idea...
Great Idea...
Rob sent me a link concerning his yellow letter tech still haven't gotten around to checking it out obviously I need to. :D Also Mike I shot you a message as I'm interested in possibly using your services as far as 'automating' our yellow mail is concerned.
-Wali
@Mike, and anyone who cares to answer. Mike I plan to use your service in the future...when I make some money, LOL, but wanted to ask a quick follow in question. It is so basic I almost feel stupid asking, but I don't know so I will. I am sitting writng my yellow letters now and I did them in red as suggested so many time. Do I also do the envelope in red. I would think so for continuity but not sure.
Thanks All, Derek
Derek - I can not concretely say yes or no to the red ink on the envelope, but that is what I am doing with my first YL mailing that is going out this weekend.
Also, check out strugglinginvestor dot com and find his post from Aug 25, 2009. It details a very efficient way to "do it yourself" for yellow letter marketing. If you are just a little bit tech savvy and have a computer and printer you can do this. Just wanted to pass the info along in case you are actually hand-writing any of your yellow letters.
PM me for the link if you can't find it easily on your own.
Thank you Nick, I like that blog. I will go back and check it out. I am doing a small mailing by hand. Only 100 letters to absentee owners. This is my first also. I am going to send them Monday because I read in many places that you should not send on the weekend. Let me know how yours go and I will do the same.
Hi Derek.
To the question of RED..
Do red written envelopes get opened more... Yes..
Is it a big percentage... NO
The reality is that that envelope should be done in a method to cause it to be opened... Blue Black Red who cares just dont use a label or type font.
And dont cheat the envelope by going to a number 10. Buy invitation envelopes at Office depot.. Theyre pricey however will perform better.
If youre doing them yourself do try and stay to red ink on the letter however that isnt totally needed on a small run..
I would suggest buying above grade yellow tablets as the lines are more consistant and the paper feed through the printer better.
Good luck... and if I can answer any questions as you work through this let me know.
Mike again thank you as your advice is invaluable. I have done them in Red inside and out. I did them by hand this time...man that sucks, but if I get 1 deal I am done with this maual stuff. I am trying to figure out how to do tem on the printer and using mail merge, but I wanted to get them out and not but stuck on research. Thanks, Mike.
Nick, I am going out to hang my first batch of bandit signs tonight. Are you using those?
Ima newbie too and Ive been going back and forth on whether to proceed with yellow letters or stick with postcards (i have two mailing campaigns that i did with yellow postcards, 100 absentee owners and 100 30 day mortgage lates, ive only gotten 1 call thus far). I definitely need to get the phone ringing so i think im gonna switch to hand written yellow letters (hey it cant hurt at this point lol). Im also setting up a pay per click campaign to my website (did bandit signs before but i dont feel good doing it, so switching to online lol).
I also work a fulltime job, time is limited tho im willing to make time and i dont have loads of disposable income to dump into marketing. Once I get a deal or two done, i will GLADLY buy one of these pro's services so that I can begin to automate my business.
Same here Tamara, but I need a couple fo deals first to build a reserve. I put out 20 signs in my area Friday night, but I have yet to have a call. I have another area I am targeting and will put out at least 20 more next Friday. I am still completing my first batch of 100 yellow letters to go out tomorrow. Tamara, I will let you know how it goes.
Cant wait to hear your results, Derek!
If I were gonna give bandit signs another try, I heard that making sure you putting them in a high cash sales area is good and aside from intersections, try putting them on long stretches of road that is 40 mph and under. Im still kicking around doing bandit signs more creatively (negotiating with homeowners on a busy street, convenient stores, etc) though.