I was speaking to a fairly new real estate investor recently, and she said she was very disappointed with the results of her absentee owner mailing. She told me that she had sent 200 out mail pieces and had only gotten 10 calls, none of which had turned into a deal. My new friend thought this was a terrible result. I pointed out to her that this was actually a 5% response rate which wasn’t bad at all for a first mailing.
When I questioned her further, she told me that she had only mailed these folks once and that was over two months ago. One mailing and she had already given up. For the next hour or so, over a cup of coffee we had a class in “Direct Mail Marketing 101”.
It’s A Numbers Game
You have to start with the resources you have, and if you can only afford to mail to 200 people then that’s what you have to do; market consistently to those 200 folks until you have a larger marketing budget. But you really need to mail to a larger list to get the results most people want so this should be your long term goal.
On average, real estate investors say that you will need to speak to 20 sellers to find one deal. If you are getting good results with your mailings that would mean you would get 50-60 calls on 1000 pieces of mail which is a pretty good percentage of 5%-6%. Therefore if you want to buy one house a month, you will need at least 20 leads. If you use the percentage of 5%, you will need to mail at least 400 pieces to reach your goal.
It’s Called A “Campaign” For A Reason
Marketing is not an “event” but an ongoing process. In order to be successful with direct mail, you need to have continuous marketing campaigns that go on month after month, mailing to the same targeted list. Your results will start to grow with each mailing. Some statistics say for real estate investors, you will get 85% of your deals when you have done 5 or more mailings. People will remember you if you keep mailing to them. And I can guarantee you that you will be one of the few if not the only one still mailing to those folks after 5 or 6 months. Most of people will throw in the towel long before that time.
Plan for Success
If you stay in the game long enough, you will be successful with direct mail. For a long time now that has been my best source of leads. That doesn’t mean that you shouldn’t take advantage of other marketing activities. You should always have at least 2 or 3 different ways you market yourself, and I will cover some of these in upcoming posts.