7 Reasons Why Real Estate Investors Should Use Direct Response Marketing

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Direct Response Marketing is hands down the best concept to use for Real Estate Investing…better yet, for any business!

Not using direct response marketing is like taking a bucket of money, hopping in your car, driving 100 MPH blindfolded, and sticking the bucket of money out the window as it flies all over the place.

Ok… maybe it’s not that insane, but my point is that if you’re not using direct response marketing you could be wasting a bunch of money, a lot of time, and you might not have a clue how much its really costing you overall.

Let me ask you something…

• Are you still out there chasing motivated sellers and buyers?
• Have you ever wondered why you’re not getting the response you want from your marketing?
• Have you ever wondered how to improve the response of your marketing (meaning get more buyer & seller leads) without breaking your pockets, but you have no clue where to start?

If you said yes, to any of the questions above, then it could very well be that you aren’t using direct response marketing. If you are using it, then you may not be doing it right!

Before I tell you why you should use direct response marketing, let’s talk about what direct response marketing actually is:

Wikipedia says…

“Direct-response marketing is a form of marketing designed to solicit a direct response which is specific and quantifiable. The delivery of the response is direct between the viewer and the advertiser, that is, the customer responds to the marketer directly. This is in contrast to direct marketing in which the marketer contacts the potential customer directly.”

Notice the words I underlined above. We’ll discuss that in a second.

There are 7 reasons why you need to use direct response marketing in your business:

1. You Can Get Buyers and Sellers to Chase You

Just imagine your phone ringing off the hook with high quality leads that are ready to do business with you. It takes a lot of time and energy to cold call motivated sellers and knock on hundreds of doors in order to get a response. Although these methods can be effective, why should you do all the work? They need your services. It’s not the other way around.

Remember, part of this concept is for the customer (buyer or seller) to respond to you directly!

If you can solve their problem, they will come to you all day. When developing your marketing message, you need to focus on solving problems because that is what gets buyers and sellers to chase you, instead of the other way around.

2. Stronger Positioning For You

Right out of the gate, direct response marketing gives you stronger positioning when engaging a buyer or seller.  Think about it… How many times have you received an annoying phone call from a telemarketer. You’re just sitting there minding your own business and suddenly they call you up out of the blue trying to sell you life insurance or some type of debt consolidation service. The first thing you’re thinking is…”How did you get my number?” If you don’t want or need life insurance and don’t want or need debt consolidation, then you simply don’t need to speak to that telemarketer. They are disqualified…End of Call!

On the flip side, that telemarketer has to move onto the next prospect until they find someone to respond. So basically they’re chasing customers and going though hundreds of phone numbers just to find the right prospect.

If a seller or buyer calls you, then you can graciously assume that they need you and they are looking at you as someone who can help them solve their problem.  This is your opportuinty to take control of the call and qualify/disqualify the buyer or seller. My overall point is that you have better positioning because they are chasing you and they need your help. You qualify/disqualify them, they don’t qualify/disqualify you!

This also leads me to my next point…

3. Your buyer and seller leads are more motivated when they respond to you!

I can almost guarantee that if a buyer or seller is calling you, then they are likely to be 10 times more motivated than the seller or buyer that you are calling from a classified ad. As I mentioned earlier, they have a problem and they want someone to solve it. Most likely they are out there buying up every newspaper, blowing up the google search engines, sifting through the phonebook, and looking for one thing… A Solution!

Why not position yourself to be in front of that motivated buyer and seller. Your buyer or seller leads are more motivated because you put your marketing message  right in front of their face and it addresses their specific problems. All you have to do now is decide whether or not you want to do business with them.

4. You Marketing is more focused than ever (Target Practice!)

Have you ever heard the phrase, “Find Your Niche market”. A niche market is simply a segment within a market that you can focus all your marketing on. A niche market can be defined by a problem, price range, demographics (like location, age, income, etc…) and much more. Think of it like a pie. You don’t want to eat the whole pie, you just want a small slice.

For example, let’s say you don’t want to target 100 “motivated sellers”. (Stick with me. lol)  However, you do want to target 50 “motivated sellers” with a housing price range of $300,000 and below, that are facing foreclosure, ages 55 and above, and are located on the northside of Gloucester County. Do you see how focused that is? While other investors are out there chasing 100 random motivated sellers, you can market to a small specific group and generate a response that speaks to their needs and can solve their problems fast. You can target niches like sellers going through a divorce, sellers making double mortgage payments, sellers facing an unfortuante death in the family, etc… You want to target a specific group or market because you can get better results, less rejections, and make more money!

5. You can Test and Track Your Results, then Improve Your Direct Response Marketing Campaign on the Spot

There are many ways to track and improve your direct response marketing campaign. This is how I can futher prove to you that my point in Reason #3 is true. You marketing isn’t only specific, it’s also quantifiable.  (meaning you can break down the numbers of your marketing.) There is a buddy of mine who says that he would never do sign advertising.  I asked him if he ever tried it out and he said “NO “, because he hates looking at signs and thinks that it would just blend in with the rest and it would be a waste of time and money. There is only one way to see if he is right. You have to Test and Track your results.

For example, lets say you put out 50 signs that target motivated sellers facing foreclosure on the west side of Fairfax County. If you did your research, you know that foreclosures are on the rise in that area. So you end up getting 5 calls a week from your marketing. Out of those 5 calls, you are only able to qualify 2 or 4 motivated sellers a week. So maybe you’re looking at about 15 leads a month. Just from 50 signs…That is pretty good. (Again this is just an example) Out of these 15 leads, you get 1 sweet deal and generate a $27,000 profit… That’s in one a month and it only cost you $200 and 10 man hours to to put out all 50 signs. (maybe you can do it faster than 10 hours…)

Now what you can do at this point is look at your results and improve your direct response marketing campaign on the spot. Maybe, you can increase the amount of signs you put out (Does putting out 200 signs give me 4 deals? Test it!), maybe you’ll want to work on your phone conversion skills, maybe you’ll want to improve your advertisements on the sign (although at this rate I’d probably leave it, but you can test it out and see if the results are better), maybe you’ll want to pay someone else to put out signs so you can spend time working on other projects…Whatever the case may be, you want to test and track your results because it can save you time, money (by budgeting), and give you the results of your actual efforts. Anything can be tracked…Anything!

6. You can develop a real Direct Response Marketing Plan

I remember when I attended a Marketing Meeting over in Alexandria, VA. We were talking about testing, tracking, and budgeting. Someone asked a very good question about Reason #5. He said, “Wouldn’t it be better to know all this information beforehand? It sounds like you’d be blindly going out there marketing and testing. I might not have that kind of money or time. I’d rather know upfront what I could expect” Then he received what I think is the best answer…Network with other successful Investors! Ask them what kind of results they’re getting from their marketing and how much they’re spending. Leverage off of their experience!

I thought that answer was perfect. By talking to other investors who are actively using direct response marketing in their business, you can leverage their experience and at least have some type of starting point. However, its still a risky business. Who’s to say that you will get the same exact results that they do? Who’s to say that you can actually find a savy real estate investor that will allow you to leverage their experience? Althought I seriously doubt that, if that is the case, then you need to test it out yourself. You have to take a risk and test it out. This is what entrepreneurs and investors do all day. Once you get the results, you can begin developing a marketing plan. Make a plan to do it, then tweak it along the way to suit your situation.

It’s not about how much this will cost you, its about how much it will make you. This is how Real Estate Investors/Entrpreneurs need to think. Risk and Grow Rich! (Great book by the way…)

Ok, now onto my final point…

7. You Can Use Direct Response Marketing Both Offline and Online! (Even for Free)

Why leave money on the table? Direct Response Marketing doesn’t have to cost you an arm and a leg. You can use direct response marketing with anything. You can use it with email, blogs, Facebook, Twitter, (how many valuable problem solving tweets do I need to post to find a seller, buyer, or investor to connect with), you can use it with your own website, you can even do it in discussion forums. They don’t call it BiggerPockets for nothing. lol (By the way be careful and very subtle with this because you might be breaking the rules and Mr. Joshua Dorkin will lay the smack down on you. 😉 ) It’s  all about building rapport and providing value, especially with social networking sites like Twitter, Facebook, Myspace, BiggerPockets.com etc…

If you are online, you still want to track your results and ensure that you are giving value and solving problems. If not, you’ll just look like a spammer and people won’t respond as much. You can also direct people offline to your online website by using business cards, flyers, signs, postcards, etc… Make people respond where you want them to respond by telling them to call you, email you, or go to your website…whatever the case may be.

Test it! Track it! Improve it! Profit From It! Repeat It! It only happens with Direct Response Marketing!

Tell me in the comment section if you’re using Direct Response Marketing in your business and how it has or has not helped your business. Also, let me know what you think of this blog post! 🙂

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.