Frequency of marketing
Reaching your target audience without annoying them is an art. You want to consistently be in the back of their minds so when they're ready to sell, they remember to call, email, or reach out to you.
In direct mail, you should send a piece of mail at least once a month over three to five months -- or longer, if your budget allows. This is just a guideline; your campaign can be personal to you and the audience you're targeting. If you're sending letters to properties in probate, you may want to send letters every two to three weeks so you're one of the first buyers to reach the heirs of the estate when they're most likely to sell.
Create a message that converts
Consistent marketing is only one piece of the puzzle. You also need a well-written message that conveys what you have to offer as a solution to the homeowners’ problem. They may need to sell quickly, get cash now, or not want to deal with the property they just inherited because they live out of state. Whatever it is, make sure you address that pain and offer solutions for it while pointing out why your service is better than your competitors’.
Your marketing piece should be clear about:
- who you are,
- what you do,
- the problem you can help solve (identify the pains and offer a solution or explain how the solution works), and
- what the homeowner should do next (call you, fill out an online form, return a form by mail, or another option).
Think about who your audience is and cater your message to them. Will a professional letter or a more personal handwritten letter be more appealing to the recipient? Marketing to someone who recently inherited a property through probate is very different than marketing to someone who owned an investment property out of state for the past 10 years.
Execute the direct marketing campaign
You have two choices when it comes to executing the direct marketing campaign: Do it yourself or pay a third-party company to do it for you. Doing it yourself often saves money in the long run but is a huge time commitment. You can use Microsoft Excel's mail merge function to automatically print and customize letters, and can even download handwritten fonts, but in the end, you're still responsible for the hard work of executing the campaign.
There are dozens of direct marketing companies specific that will print, stuff, stamp, and mail your direct mail campaign for you. They can even create online direct marketing campaigns as well. Below are a few popular companies in the real estate investing world:
If you use a third-party company, shop around to get the best price possible.
Track results to refine and improve your direct marketing campaign
You've spent the time building and scrubbing a list and have designed a well-thought-out marketing campaign. Now you need to track the results so you can refine and improve the campaign moving forward. It's helpful to keep track of which addresses were deemed "undeliverable" so you don't continuously market to bad addresses.
Also, track the number of leads you receive. This is your response rate. In real estate, it's common to have a response rate of 1% to 5%. If it's a really well-designed campaign, that number could be higher. Anything around 2% or 3% is good. Of those leads, expect 1% to 2% to become sales ("conversions"). So, if you send 1,000 letters with a 2% response rate, you'll have 20 responses. Of those 20 leads, one or two could become possible sales. Because conversion rates typically hover around 1% to 2%, you may need to run a few campaigns before you make a sale.
I've run campaigns that have had terrible results and others with response rates above 2% and several closed deals. Tracking response and closure rates helps you determine what factors might contribute to the success or failure of the campaign.
Did you try a new font? Change your envelope size or color? Use a different message? If you got a better response rate, keep testing to see if the positive results continue in future campaigns. It could have been another factor, like the time of year. Without tracking, there's no way to decipher the cause and effect.
Stick with a budget for your direct marketing campaign
Set a budget for your direct marketing campaign and stick to it. Direct marketing campaigns can be expensive, especially if you're trying to consistently market to and reach a large audience.
Professional wholesalers and real estate investors spend tens of thousands of dollars each year on marketing. Prepare to spend $500 to $2,000 per campaign, depending on how many times you contact the audience and the type of marketing.
The first campaign I sent cost me around $1,500. I purchased a list of 3,000 leads and sent a three-letter series to 822 people. I ended up closing two deals out of the campaign that netted me $20,000.
You don't have to break the bank -- determine what you can afford and how far that will go in terms of a direct marketing campaign. Use any profits you earned from deals closed through your direct marketing campaign to fuel future campaigns. This ensures you have a constant pipeline of potential investment properties to purchase and the funds to support your marketing efforts.
Direct marketing campaigns can be an incredible source for finding investment properties to purchase. There are endless combinations of design and delivery. Most investors constantly experiment with their campaigns and find new ways to improve their conversion rates.
If you think a direct marketing campaign could be a worthwhile endeavor, determine your budget, find your audience, design your campaign, and start marketing.