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.
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.
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?