5 Ways to Increase Direct Mail Profitability

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For Newbie wholesalers, the first question normally asked is “Where do I start?” My response is always with the basics; education, education, and action. I steer most Newbies to BiggerPockets to learn as much as possible; some people listen and others don’t. For those who do listen and begin to take action I tell them to start with sending mail.

In an article I wrote: Wholesalers: Having Trouble Getting Started? Take This ONE Step Today!, I discuss the importance of starting a direct mail campaign. In this article, I would like to address the five reasons your direct mail campaign is lackluster and not producing great returns.

1) Inconsistent Mailing

This is by far the easiest way to lose money. If you have spent any time studying the intricacies of direct mail, you know that being inconsistent in your mailings will cause you to lose traction and waste money. It is reported that in order to effectively gauge the performance of a mailing campaign, you must mail to a targeted list at least seven times. The problem that arises is many Newbies do not budget their campaigns for seven mailings. I place the blame on two factors: 1) the real estate guru sold the Newbie on a dream that it’s easy just pull a list, send mail to the list, and make $5,000 in 30 days or less. 2) the Newbie is so excited and anxious to get started, they do not clearly identify everything that is needed to have a successful campaign. Because of these two main factors along with others, the campaign stalls and all motivation is lost to continue.

2) Poor Message/List

I would say this would be the second area that is highly missed when starting a direct mail campaign: the message and the list.

I have heard others state they continually send the same letter throughout the campaign and across diverse campaigns. I am not an advocate of this approach. It is a well known fact in Marketing that you must know your target market and cater your message to that market. It is not effective to send the same letter to an absentee owner lead as you would to a divorce lead. There should be two different messages because there are two different pain points. With an absentee owner the message should cater toward problem tenants, while a divorce lead should cater toward bad memories. Both are great leads but two totally different messages.

Newbies miss this because they try the one size fits all approach and waste critical marketing dollars by sending the wrong message to the right lead. Take the time to cater your message to the appropriate lead type.

Related: Targeting Sellers With Direct Mail: How to Cast a Wide Net Without Losing Precision

3) Poor Follow Up

Follow up, Follow up, Follow up. There are some leads that I am still following up with after sending the mailing piece a year ago. Yes, the saying is true—”no” means “not now.” A seller responds to a marketing piece, great! But after getting information about the property you make an offer and they say “well that is too low for me.” What do you do? Here’s what you do; place them on a long term follow up (LTFU) plan. This plan is where you continue to touch them on a specific time frame. This may be monthly, or every other month with a brief phone call or follow up letter, but some form of touch needs to occur. They are eventually going to sell their property and you want them to think of you first. Poor follow up is wasted money. If you spent the money on the lead make sure you try and maximize every lead.

4) Poor Rapport Building

This takes practice. Rapport is not something you can just make up and disguise. Normally, people can determine if you are being genuine or not. The best way to build rapport is to find a common interest between you and the seller and focus on that. There may be other interests the seller has, but focus on something that you both can relate to.

Building rapport takes a level of awareness. The seller, while on a call, may mention something they like or are doing and you have to be entrenched in the conversation to pick up these key signals. Once rapport is built it is a lot easier to hold a conversation and the seller will begin to let their guard down and clearly hear what you are saying to them.

It is a lot easier to build rapport during an appointment. There are more visual aides that will help you find key things you can discuss with the seller. Take the time to look at pictures on the wall, look at what’s in the garage to notice if you have any similar hobbies. Stop and take time to get to know the seller, this will make negotiations a lot easier.

Related: The Ultimate Guide to Using Direct Mail Advertising to Grow Your Real Estate Business

5) Inconsistent Measurements

Are you tracking the effectiveness of your campaign? Do you know how many calls you can expect from a campaign? Do you know how many appointments you intend to go on? Are you aware of how many possible deals you will get? If you don’t measure these items, you are unsure if your campaign is a success or not. If you send 5000 letters, get 100 calls, and don’t get a deal, is this success? This very well could be, but if you do not have rubric for what success looks like then you are not measuring your success. Even if you make money, it can still be a possible failure. I will not reiterate what you should measure.  You can read 5 Direct Mail Metrics Every Real Estate Investor Should Track Religiously for that. You need to know what a successful campaign looks like and identify key measurements to achieve those goals.

This is just a brief list of five items that can increase your profitability on your direct mail campaign. There are many more areas of development that can be used to increase your return.

What’s your favorite way to improve your mailing campaign returns?

About Author

Marcus Maloney

Marcus Maloney G+ is the Executive Officer of Equity Realty & Investments as well as 3rd Generation Management & Holding LLC, both are family owned and operated real estate investment firms. The firms' goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona and Chicago, Illinois. You can follow Marcus on Twitter

14 Comments

  1. Daniel Eisman

    Great list Marcus. I’m about to embark on a mail campaign and am glad I read your article first. This may be too broad of a question but what type of progression do you suggest when sending multiple letters? You mentioned a mistake being continually sending the same letter throughout the campaign, what types of changes do you suggest when sending multiple letters to the same owner? Thanks for the article and information.

    • Marcus Maloney

      Daniel,

      Great question, you can start with a postcard, and follow up with a series of unbranded letter (about 4), then I would follow up with a few branded letters. Its good to have your letters progress throughout the campaign for example, “I have written to you 3 times without a response are you considering selling”, or “I have not received a response, so this will be my final attempt” these comments in your letter inform the seller you are the same person trying to reach you. Persistence is what gets you the deal.

      Just make sure your mailer discusses the sellers situation your are mailing to. So if its an eviction list, state something to the effect “are you tired of dealing with troublesome tenants, we have a solution to help”. This talks directly to the sellers pain point.

      Hope this helps, thanks for reading. Much success to you and your first campaign. “Enjoying the Journey”

  2. Curt Smith

    Tnx Marcus, But so far you’ve not given a new person any toe hold on how to start their own direct marketing program, I feel.

    Subscribe to the BP marketing forum. Read back 6 mo every thread on finding sellers.

    Connect with Michael Quarels (??) he’s the owner of yellowletters.com and posts a lot of help.

    It’s no longer cost wise productive to just buy an absentee owner list (from where ever). Today you’ll end up mailing 99.99 happy landlords, part time residences, vacation homes etc looking for some owner with a big problem. Today it’s a lot more expensive to market for a deal. Mike Q gives some disturbing statistics: $$ per deal all said and done.

    Today you need to combine stress factors to find sellers who’ll negotiate:

    – delinquent taxes (call tax commissioner)

    – divorce or probate (typically have to go to court house)

    – liens (public records search)

    – tall grass owner gone missing. (missing persons search for $$)

    Notice NONE of the above are just buy a list, mail, sellers call begging to give you their houses. You have to dig for the data, then cull it before mailing.

    FACT: if you can just use your CC to buy a list and send to yellowletters.com, so can folks from outside your area and literally all round the world, will mail your same list. I know this because of the cards and letters I get mailed re our rentals. From all around the country!

    If you have to use your feet to get some data, that limits those sellers to just folks who are willing to use your feet to get that sellers address.

    • Marcus Maloney

      Curt,

      Thanks for reading and your imput, I did have a link added in the content that address what to do in order to get started. I am a firm believer that you have to have a strategy and a niche to focus in on. Absentee owners is such a broad list and the return on that list is not as profitable as a divorce list, or eviction list or others. I completely agree, the aim of the article was for consistency. THere are numerous ways to procure a list however the list will not generate a profit if there is no consistency in mailing to the list. One of the greatest failures for newbies is to mail to a list once or twice and give up.

      Again I agree with you; the misperception is to just buy a list and watch magic happen and make thousands of dollars instantly. Well we know that this is not the truth, you have to build rapport with the seller, you have to meet the seller, you have to listen to the seller. It takes work, and the more work you can do or have someone else do the work for you, the more successful you’ll be.

      Thanks for your imput it was really warranted to give Newbies a perspective that its not all pie in the sky.

      “Enjoy the Journey”

  3. James Green

    @CURT SMITH you are so correct. I get most of my call back from owners that aren’t really motivated. They also have multiple wholesalers/cash buyers looking at their properties.

    You definitely have to narrow your list down even more.

    • Marcus Maloney

      James,

      The money is in the follow up, I am in an extremely competitive market (PHX) and I know that you have to be creative and you HAVE to follow up consistently in order to secure a deal, and even then its still difficult. The specialty list are essential, I tell people now if you only a few hundered dollars do not waste the money on an absentee owner list, be focused an secure a divorce list, pre-foreclosure list, or tax delinquent list. These list will generate a higher response rate which in turn can produce a higher close rate.

      Thanks for your imput bro, “Enjoying the Journey”

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