Direct Mail Response Rates in Different Parts of the U.S.

Blair Halver · 2013-05-06T08:31:14-07:00

Hi all, I wanted to provide some valuable intel from the front lines of the world of direct mail marketing for real estate investors. The last time I mentioned response rates on here, it was an average response rate throughout the nation, since I market in various parts of the country. Now I'm noticing some significant differences in response rates depending on the market. These are all postcard mailing campaigns mailed to Absentee owners who have owned the property at least 10 years. The response rates listed here are RAW CALLS (i.e. all calls except duplicates) divided by number of postcards sent. Each market listed below represents a number of contiguous zip codes. The postcards all contained relatively similar copy and other variables. Here are the stats from some of the areas we mail for our clients: Washington D.C. - 3.77% Boston Area - 10.69% Northern Mass. - 10.68% Southern Los Angeles - 2.16% Allen, TX - 4.64% Memphis, TN - 9.02% Burlington, NC - 9.15% What can we learn from this? Well, I'll throw that question out to the BP community here - can we draw conclusions regarding direct mail response rates based on other factors such as median home price, average home price, sales volume, etc? Anybody out there good at researching some stats and doing some simple math? I'm sure all of us here would appreciate seeing what this data can lead to! Thanks! Blair

Chris ClothierBusiness Member

Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes

13y

Blair, Are these the cities where the owners owned property or the cities where the mailed recipients lived?

Chris

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Blair Halver

OP

Real Estate Entrepreneur · Winston-Salem, NC · Member since 2008 · 101 posts · 40 votes

13y

These are the cities where the owner has a property that he does not reside in. The owner could have lived anywhere in the U.S.

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Chris ClothierBusiness Member

Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes

13y

Last question -

I would think there would be variation in the number of cards sent for each area. Can you share the other data - how many cards/responses for owners with properties in each city? It is tough to tell if this data is even worth looking at yet. I am a data geek, but have learned through the years that not everything is worth tracking, measuring or even asking questions about. I am always coming up with new ways to look at data and more than half the time I look at something once or twice and come to the conclusion that I cannot answer the questions I am asking by looking at it - so I don't look at it a third time.

Anyway, I'd be interested in seeing the rest of the data.

All the best - Chris

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Brandon TurnerPro Member

Investor · Maui, HI · Member since 2009 · 13k+ posts · 3k+ votes

13y

I'd also love to know more details on those numbers, but just for speculation sake, I would say:

1.) Some areas are "hotter" than others, thus the need for selling through a direct mail campaign might be lessened.

2.) I bet some areas have a much more active wholesaler presence. So, if a buyer gets 5 yellow letters, the chances are much less.

Thoughts?

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Sharon Vornholt

Goshen, KY · Member since 2009 · 835 posts · 683 votes

13y

I will tell you one thing that has definitely changed; the number of people doing direct mail. I think maybe we have done "too good of a job" of teaching others.

I got a call from an absentee owner/executor today that came from my probate list. She told me that she had received mail pieces from 9 different companies. There were rarely ever more than a couple of other folks in my area doing mailings to probates.

Since she is an absentee owner you could surmise that she had more people mailing to her than local executors, but there is no way to know that for sure. When I speak to her the next time, I am going to get some "details" if i can.

I'm pretty sure most of those folks won'tcontinue mailing for a lengthy period of time.

Sharon

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Michael Quarles

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

13y

Originally posted by Sharon Vornholt:

I will tell you one thing that has definitely changed; the number of people doing direct mail. I think maybe we have done "too good of a job" of teaching others.

Sharon Vornholt, I hear that the MLS players are getting back into the DM market because the REO pipeline has dried up considerably. Besides isnt it a great thing that others are touching the prospect as well? IMHO We need other investors direct marketing to help combat the NAR machine...

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Sharon Vornholt

Goshen, KY · Member since 2009 · 835 posts · 683 votes

13y

Michael -

I think that you are right about folks that were working REO's moving into other niches.

I do believe that more people are tackling probates than ever before, but I don't see most of these folks staying in the game long term.

Sharon

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Michael Quarles

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

13y

I agree Sharon,

The Probate market is too slow for most unless they've set inplace a pipeline of referrals and past DM prospects. Its not the get rich plan most want it to be.

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Dev HornPro Member

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

13y

To Chris Clothier's point earlier, I'm not sure if you can draw any conclusions from the original data because there are factors that you will not know in each market, such as - to Sharon Vornholt's point - the number of competing messages that someone receives. You could have a very similar response rate across markets on an absolute basis, but due to different levels of competition your marketing could be more or less effective. It's kind of like fishing in an area where there are fewer fishermen - you'll probably catch more fish...

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Rick H.

Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes

13y

These numbers look to be about what I would expect for their respective markets.

There are SO many factors. In prior times, when a west coast market was hot, an east coast market might be soft or cold. All real estate markets may be local (not unlike politics) but at present there are so many unusual factors that would appear to create one big U.S. market, such as the institutional buyers making cash offers.

Of course, direct mail can be a wonderful tool to help ferret out sellers who were not otherwise not actively seeking buyers, in other words, buyers can use direct response media to bi-pass traditionally broker listed and sold property.

One of the biggest tools in the individual investor's arsenal is (or should be) the ability to solve problems. Hedge funds don't solve problems. They are generally not real estate people and will, in time, migrate they cash reserves to whatever opportunity d'jur captures their fancy.

In the meantime, the small, independent investor can find evergreen niches and countless opportunities using mail and other direct response media. Don't forget that door knocking is really just another media. Even Paul Revere, on horseback, could be considered media.

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Blair Halver

OP

Real Estate Entrepreneur · Winston-Salem, NC · Member since 2008 · 101 posts · 40 votes

13y

Originally posted by Dev Horn:

To Chris Clothier's point earlier, I'm not sure if you can draw any conclusions from the original data because there are factors that you will not know in each market, such as - to Sharon Vornholt's point - the number of competing messages that someone receives. You could have a very similar response rate across markets on an absolute basis, but due to different levels of competition your marketing could be more or less effective. It's kind of like fishing in an area where there are fewer fishermen - you'll probably catch more fish...

Hey Dev and Sharon, thanks for your insight. I think you make a good point. Which is unfortunate because, wouldn't it be nice to be able to predict the response rate in a given market before you invest in mailing to that market? In other words, wouldn't it be nice to predict the future? :-)

With enough data from enough markets, though, perhaps minimal conclusions can be drawn by looking at trends found in the data. But I think this would require MUCH more data than I've provided here of course.

Other factors that are immeasurable that I was thinking about - local cultural differences (e.g. Los Angeles vs. rural North Carolina), wording, etc. But I agree, there are probably too many variables to really prove anything.

But it's like the guy on Mythbusters said once - it's called "science" if you write stuff down (i.e. measure data), and if you don't it's just called "screwing around". :-)

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Dev HornPro Member

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

13y

Blair H. - Right, but I don't think there is anything wrong with your observations, and your experience my be repeatable in the short term if the other factors remain about the same.

Sometimes actual experiences are more relevant than statistical/analytical rules. Even though it is anecdotal data, I'm still interested in your findings. THANKS for sharing!

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Direct Mail Response Rates in Different Parts of the U.S.

Direct Mail Response Rates in Different Parts of the U.S.

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