November 20, 2013 in Marketing
Building Better Lists
Today the topic is on building better lists for your direct mail campaigns. For those of us that use direct mail in our businesses, we have come to know that the results you get from your direct mail campaign will depend on several factors. There are 4 essential parts to every direct mail campaign, and if any one of these is missing or is not quite right you won’t get the desired results from your efforts.
The 4 essential components are:
- The list
- The mail piece
- The message
- The mailing (the campaign)
It doesn’t really matter of your message is great or which type of mail piece you send if you are sending it to a bad list. Let's talk about building better lists.
So What Makes a List “Bad”?
A better question would probably be, “What are the components of a good list” “or what are some tips on building better lists for your direct mail campaigns”?
The short answer here is that a bad list won’t be selective enough in the audience it reaches.
For instance, if you are targeting pre-foreclosures and you don’t mail to folks that are late on their house payments, you couldn’t reasonably expect to get a good response. You wouldn’t have the right target audience.
The same thing would be true if you decided to market to tired landlords, but you simply send out a postcard to everyone in the area you want to buy property in. You wouldn’t have any idea if there were actually any landlords in your selected area.
Building a Responsive List
Whatever niche you decide to work in, you need to give some serious thought to the type of prospects you want to attract and the types of properties you would like to buy. Once you have these answers, you can begin the process of building your list. Building a better list isn't really harder. It just takes some thought.
For this example, I want to use absentee owners. This is a niche I like to work in so I will show you how I begin the selection process before ordering my list.
1. I have certain priced houses I want to buy so that is one of the parameters I set up.
I really don’t want to buy “Junkers” in bad areas, so I like to set my “home value” at about $35,000 -$40,000 on the low end. This just happens to fit within my investing strategy. On the high end I will use somewhere between $250,000 and $300,000. Where you set your parameters will depend on the median price for a home in your area.
The median price for a home in my area is in the $145,000 range or roughly one half of my high end price. Remember that as investors, when we are buying a house we won’t be paying that much for it. By the time we back out repairs and wholesale fees, the percentage you are paying is more like 40-60% of the ARV.
2. I only want to buy in certain zip codes.
You can ask to omit zip codes such as those that are in “war zones” when you order your list. If for any reason you want to omit a particular area you can do that.
3. I want at least 40-50% equity in a home.
In order for a seller to take your low offer, he has to be able to afford to take your low offer. Most of these folks aren’t willing (even if they are able) to bring cash to the closing. This wouldn’t necessarily be one of the criteria in someone’s list that did lease options. Equity wouldn’t be such as big of factor as it would be for a wholesaler or rehabber.
4. I only want out of state absentee owners for my list.
Here’s the reason; where I am located in Kentucky, I can get to almost any part of the state in roughly 3 hours. I have found that if an absentee owner is located within a reasonable driving distance (which seems to be around 3 to 3 ½ hours in my area); it won’t be a big enough pain in the butt. Now this might not be true in all areas. You will need to test this principle in your area.
5. Name your investing area.
I only invest in a couple of counties in my area. Be sure to state the counties that you want the information for otherwise you will get a giant list of every county in your state.
That’s all there is to it.
Building better lists is a process, but it's not difficult. Nail down the criteria for the particular list you will be purchasing and you will always get better results with your direct mail campaigns – guaranteed!
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