Show notes
This is the answer to a Flipping Junkie Podcast #Just Ask question. Erik Drentlaw asked what my exact direct mail strategy is.
While I think it's true that you need to become an expert at one thing before moving on to another is a great strategy, with highly specific things like online marketing, it's best to let the experts take over. If you need to focus on becoming the expert at direct mail, do it! But allow the people who are already experts at SEO and PPC to manage that side for you. That way, you're getting the benefit of both online and off-line marketing without wasting your time trying to learn strategies for both.
Erik, I see that you mentioned you have a competitor website but would have liked to switch. You still can! In fact, we have a team of professional PPC and SEO experts here who would gladly manage your online marketing so that you can focus on direct mail. That way, your business will benefit from marketing on two fronts. These guys manage my PPC marketing, so I can promise you they're great.
As far direct mail goes, we've done something like $80k+ on direct mail in the last 12 months. I have absolutely no problem sharing my direct mail strategies. There seems to be some level of secrecy when it comes to asking about direct mail strategies, as if some investors are doing things that no one else would think about. The truth is, direct mail strategies doesn't vary that much.
What is rare is people actually doing it and sticking to it. It's difficult to keep it up, but as long as you do it and stay consistent, it'll pay off in the end. Just stick to what's being taught, and actually do it
The biggest list we mail to is the high equity list. This is key. Mail to owner-occupied, and absentee-owner high equity direct mail list, targeting ages 45+ of the household. That demographic has been the highest converting as far as direct mail is concerned.
The next question becomes, "Where do you get that list?" You can get this information from ListSource.com, you can get your rates down by calling and asking. Definitely do that. You go into the site, and specify the types of properties you're looking for in your target area. Look in your farm area, the spot where you expect most of your leads to come from. Choose the property value next. Don't go high-end properties; you should limit the appraised value to just above medium home price to avoid the crazy expensive ones. After that, you target equity.
There are two ways to do equity targeting:
1. Mortgage Amount
2. Equity percentage.
Stick with equity percentage. We tend to go with 50% equity because you want the seller to have enough equity to actually be able to sell to you instead of needing to go through a 3rd party. This helps you to weed out any bad leads before you start pooling.
What it takes in direct mail is money. The people who are succeeding are spending lots of money. Just from this list that we have, and sending direct mail, we've got about 12 leads this year from direct mail. To make direct mail a success, you need to get a large enough number of calls to justify the amount you're spending on it.
We're sending out roughly 10k - 20k postcards a month, spending about $5k per deal (which is a little more than I would like to be spending). But we want the deal volume, so we're spending it to get it.
The key to success with direct mail is to keep your list decent enough, but not too big. If it's too big, you're going to not be able to mail enough because it's going to be too expensive. As far as what to put on your postcard, you need to include:
- A picture of you / a house
- The BBB logo
- Your website URL
- Your business name and information
Branding is super important, and not enough investors know about it. You need to make sure your postcard is unique to your business and stands out to your motivated sellers. The reality is, you're not the only one in your market mailing, so you're probably not the only piece of mail that they get. Avoid looking like spam by making your postcards individualized.
On that same note, you need to have a large pool to mail to. Don't just be sending out 200 letters a month and wonder why you haven't heard anything. The minimum you should be mailing is 1,000/month, but even that's a little low depending on your city and market size.
It's very easy to make your own postcards. That helps your business stand out from all of the others that are just using templates. You don't need fancy software, goto Canva.com and design your own for free. What we do to get them mailed out is we go to a local print and mail house, tell them how many we want, and negotiate prices from there. As long as you get it out and in front of people, you'll be in the clear. Make sure you give them variable printing so that each postcard is individualized so that your leads feel like you mailed personally to them.
We mail roughly 45 days apart to the different lists. Remember, you have to spend money to make money. Direct mail is an investment, just like everything else. Work on your acquisitions skills to get them under contract. My friend, John Martinez, has a lot of sales training on that sort of thing. Check out his stuff in the links.
Don't neglect online leads, either. If you want, reach out to us at Sales@LeadPropeller.com so that you can let our experts manage it for you. Or, call (210) 999 5187. Our pros here would be more than happy to help manage your PPC to get you quality leads online.
If you have a question that you want answered, post it in the group with the hashtag #JustAsk, and tag me @DannyJohnson. I'll make a podcast episode to answer your question for you!
Thank you again for the question, Erik. Hope this helped!
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