Is the yellow letter worth it??

[Derek Smith]

OK, I know using yellow letters is a proven good thing. But with my budget I can only afford to send out 100 per month to start (have to pay for my 100 bandit signs too). Ron Legrand said that if you cannot sent out at least 200 per week you will not see results. Well I get paid once per month and I cannot afford more right now so is 100 per month a waste of time or should I do what I can. I appreciate your advice.

[Michael Quarles]

Hello Derek,

First let me congratulate you on marketing irrespective of the type…

Secondly I like Troy have a slanted view point since we are both with Yellow Letter Mail businesses. He is with YellowLettersComplete.com and I own YellowLetterMail.com.

As for your question: Yes…Short of full page newspaper ad on the first page of the Sunday classified section or 30 minute TV infomercials I haven’t seen a better response rate. Problem with the newspaper ad and TV is that it is a very expensive cost to entry and it produces a lot of “Junk” calls. Whereas direct mail done right is very targeted and can deliver calls from your business model prospect. Example being, shot gun marketing ie. Newspaper, bandit signs, radio, TV, Bill boards, etc. produce calls from all demographics some of which wont fit you business model. If you’re an equity investor and don’t do shorts then the short calls are a waste of advertising dollar.

As for post cards versus yellow letters..
Post cards are great reinforcement marketing. Absolutely save the cost of a yellow letter on your third mailing. Letters 1 and 2 best be yellow letters, If you send out letters 4 and 5 they can be either two yellows or a yellow and a typed letter. Typed letters can be produced cheaper. Mail piece 6 a post card is fine.

Troy explained a little about why the post card is more expensive then the yellow letter very well so there isn’t a need in going there. But lets look at the post card as a reinforcement.

In all marketing we have a series of touches. It’s the reason Budweiser advertises at a million dollars a commercial during the super bowl telling us to drink what is in our hand. Reinforcement works and frankly is needed. No one buys on the first contact. Even the sellers who call off of the first Yellow Letter still have been touched by something to cause them to think about selling. Maybe it was a for sale sign in their neighborhood which causes two sellers to offer their home for sale within six months of being planted in the ground. Maybe it was the passing glance of a realtor magazine offering homes for sale. Something has touched them. When someone is being touched typically they must be touched 3-8 times to cause them to take action. And frankly the PC is a good touch… It just doesn’t create a call to action.

What is a call to action? A seller picking up of the telephone and calling you to buy a house. PCs are a passing touch at best however at some point when they hit the prospect at the right time they will create the call. They just don’t do it at the volume of the yellow letter mail piece for the money spent.

So why do people recommend the post card? The post card has two qualities that a yellow letter doesn’t.

1) Low cost, although just perceived, to enter a market.
2) Spend to enter the market.

Heck you can go to click2mail.com and buy a PC for .39 cents as long as you have the verbiage or jump on my site and spend .45 and use a prewritten PC. The price point makes the PC look great. However as Troy explained and although 5% is a low response rate PC are much more expensive. Then there is speed. You can order PCs and have them in the mail within 24 hours whereas the Yellow Letter Mail takes a week or less to produce…

So with all of this said let’s take about the two biggest positives of a post card over a yellow letter mail piece.

1) Extremely low cost vacant and abandoned house marketing. If you’re searching for vacant houses then use postcards only. If you’re searching for both non abandoned and abandoned then yellow letters only.
2) Cost effective media to explain how we buy which eliminates some junk calls.

With that said I think it is important to receive as many junk calls as you can however only if you plan on doing something with the information you receive. When I say this I mean weighing the value of a not now seller prospect call to a now seller prospect call.

What I mean is this; we are marketing to people who fit our investor model. If we get a call from anyone in our prospect base wouldn’t that information be valuable even if we they weren’t planning on selling today and just wanted to know how you received their information? Absolutely if we used the information to continue to touch the prospect.

I know from my research that above 70% of callers call from a cell phone. Cell phones numbers are not published information therefore I have a unique piece of marketing information someone else may not have and as long as I use it wisely I can cost affectively touch the prospect again and again.

Lets look at normal response rates and expectations of a yellow letter mail campaign.

Over the last 6 weeks I have had the following for my personal investment business. I am an investor first.

12.9% calls
3.1% people telling me that wanted to sell their home.
74% Hang-ups - I send everyone to a long voicemail to weed out the non sellers.
.5% have their house listed.
The balance were either giving me information about another house or weren’t interested in selling..

So in the big picture. For 1000 bucks I get

129 calls less than 8 bucks
31 Sellers wanting to sell their home Less than 35 bucks
5 Listed houses with motivation
90 cell numbers that I can continue to market to via text marketing, after all they are my prospect
129 numbers I could warm call monthly
If I were an Agent I would have 31 people I could buy or list fairly immediately.