What to expect/plan for with direct marketing

Question

If I mail to 1000 prospects and get 1% response rate, 10 calls, I'd be lucky to get a deal out of that correct?

So if then I mail out another set of letters/post cards to the same prospects and what, get another 10 calls? If I do it myself we're at about $1000 correct? On my next $1000, two more mailings we're at 40 calls total or does the percentage increase at this point?

And to really get the higher response rate do we have to go our fifth to seventh passes as its been said?  Is 1% high, average? I was trying to be conservative.

Ultimately after $3500 should one have a deal that will at least cover the marketing expense? Is $3500 a good budget to start with? And do I just keep mailing the same people until they tell me to stop? And if I keep my farm area tight I might have to as prospects become limited no? Like, how many new ones pop up every 7 months for say a small 70 square mile town? Another thousand? Anyone have any ideas on these numbers? Just trying to get a good idea what to expect.

Jacob Blackett · Answer

@Benjamin Cowles no problem! Leads are only as good as you make them. Be prepared to think creatively, and most importantly hustle. Don't be afraid to make mistakes. Like Eric H. said, take some action and work your plan.

Eric H. · Answer

Each piece is going to get a different response rate. I don't keep accurate numbers but I get more calls from zip letters than postcards because people are going to open them and read them compared to a postcard that is immediately trashed in most cases. The deals come from the same kind of people no matter what - the person that has equity and has motivation. My campaigns consist primarily of postcards and I have sprinkled a zip letter in one time. My suggestions came from the more experienced direct mailers on the site and their recommendations.  They also recommend at least 7 'touches' and their experience has shown that majority of your deals come as you hit the latter touches. I started 3 different campaigns at the beginning of the year. I have closed 3 deals, deal #4 is set to close Oct 8, and I just put a contract in on deal #5 this evening. I am not making loads of money. I have pretty much broke even. I mail quarterly thus I am coming up on touch #4. I am confident that I will see my deal rate go up as I get into touches 5, 6, 7. Following up on leads is very important too. A phone call one month later counts as a touch as well as an email here and there. These touches cost nothing. When I start a brand new campaign I will budget for something like I suggested to you. Quarterly mailings with mostly postcards is all I could afford this year that is why a sound budget is so important.

I wish you the best!

Please keep us informed about your journey.

Sincerely,

E. Harris

Jacob Blackett · Answer

@Benjamin Cowles Great job getting things started. You have a lot of questions packed into this, but let me just tell you about my mailers.

We experience a 1% success rate. So if we're mailing 1,000 letters/post cards, then we're seeing about 10 deals that we can make money on- one of those being a great deal, another 5 that are good & the remaining deals marginal. Our call rate is closer to 15%. So about 150 calls from those 1,000 letters.

We mail out to areas on a 3 to 4 month rotation. So a specific owner may get 3 to 4 letters every 12 months if they own a property in an area we want to buy in.

We typically see a minimum profit from the letters of about 10x what we spent to get the letters out. So if you're spending $3500, & assuming you can work leads, you should be turning $35k profit.

All the best- Jake

Benjamin Cowles · Answer

thanks Eric H.. I appreciate it

Benjamin Cowles · Answer

Thank you Eric H.! You really serve them up a medley of mailings. Do you believe it keeps them reading or are you experimenting keeping track of each individual type's response rate?

Benjamin Cowles · Answer

thanks for your input @Jacob Blackett. You sound like you're doing good with it. I'll prepare for a much lower response/worthy deal rate but still it looks promising.

Eric H. · Answer

@Benjamin Cowles It's good that you are thinking about this stuff but my biggest suggestion to you is take some action! Response rates and furthermore deal rates are hard to predict. There are no guarantees. I closed a deal off of my 1st mailing. Pure luck because when I mailed that same group a second time I heard crickets. Just plan your work and then work your plan. Pick a budget, a farm area/target market, and get to it. From my experience I recommend sending at least 2000 pieces per month and you have to switch the piece up. Your campaign may look like

Month 1 Large Postcard

Month 2 Small Postcard

Month 3 Zip Letter

Month 4 Small Post Card

Month 5 Personal/Yellow Letter

Month 6 Large Postcard

I would make sure I had enough money to do a diverse mailing like this without getting a deal. Yes you keep mailing the same folks until they tell you to stop.

Hope this helps!

Sincerely,

E. Harris

What to expect/plan for with direct marketing

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