Which gives better leads? Internet or Direct Mail?

[Blair Halver]

Doing a little informal survey here...

What source do you think yields the highest quality leads for the purposes of fix & flip?

Direct mail? If yes, postcards or letters or what? Details please! Also, what is the typical cost per lead here?

Internet? If yes, be specific on how you generate these leads or where you get them. Also, what is the typical cost per lead here?

[Blair Halver]

Is this thing on (tap tap tap)?

[Jon Klaus]

I dont think either method gives better leads, necessarily. Either way can give great or terrible leads. I do think the web can give a higher percentage of qualified leads, but perhaps less volume. Direct mail imakes it way easier to target prospects or areas.

With direct mail, you'll have more people respond fishing for a price with little intention of selling. Others will call to complain about getting mail. Some will call to ask how you got their info. These aren't really leads, but might give you better "response rate" numbers.

Web gives you less response, but it's more likely that a response will be a lead. They've actually sought you out vs. the other way around. There is a pre-existing level of motivation.

Let's say you want to buy a wholesale deal and you determine that you need 20 leads to get that deal. A direct mail campaign is more straight forward in creating those 20 leads in my opinion. Send out xx number of letters and get back y number of leads.

The internet is less linear. How much web marketing do you need to do to get those 20 leads? How long will it take? Very hard to know. Does that mean don't do Internet? No, but think of it as a sustained effort that will yield fruit over time. It's also more passive. Or can be.

I am not as interested in cost per lead as cost per deal. We may define leads differently and I don't want leads, I want deals. Yes, you need leads to get deals, but the deal and it's amount of profit are more key to success.

Direct mail cost per deal--about $2500

Web cost per deal--about $1000

This is estimated as it is early in my experience on web, but I feel pretty comfortable with $1000 for now. This cost should drop over time as most of the investment is up front, but websites keep pulling, perhaps for years. Also I'm wasting web leads that are out of my target areas. I try to target, but they come in from all over the place.

I am doing both and will keep doing both, but spend more on direct mail even though it costs more per deal. Why? It gives me more control over deal flow, timing, and location.

[Blair Halver]

Jon, thanks for your reply! This is very useful information.

[Gary Parker]

I have been using direct mail for 14 months and send out about 1200 letters / post cards a month much of that repeat mailings. I am starting my web site project this winter. What I have learned from BP, and as Jon has mentioned, is that your target, how your letter is written, how often you mail to the same person and many other factors can determine a successful direct mail campaign. It is the same with the internet. You cant just create a capture page and expect it to work. I am learning there are many factors that go into successful internet marketing. I learned a ton by reading most of the posts in "REAL ESTATE INVESTOR MARKETING" and "WHOLESALING". If I had to pick one to start with, and I did, I would pick direct mail. As Jon Klaus mentioned you will get more calls from all kinds of people. It is always good talk to people. I am spending about $3500 per deal but I am picky on what I buy. Bottom line is that direct mail does work.

[Blair Halver]

Hey Gary, thanks for the response. I appreciate your input!

[Chris Gabriel]

I concur with what everyone else is saying. The internet will definitely produce better "leads," as everyone who contacts you is thinking about selling. Whereas your direct mail marketing will send you mostly people who are just fishing, or wanting to know how you got their info.