Direct mailers not receiving expected returns

[Jonathan Loynaz]

Hey everybody,

So my girlfriend and I recently started our direct mail campaign to an absentee list we got off listsource.

1st touch consisted of small yellow postcards provided by yellowletters.com. We added ourselves on the list to make sure when they were sending out and how long it took to get them. Not sure what happened but we never got them and only received 5 calls of a list of 712. We brushed it off and kept going.

2nd touch consisted of completely hand written yellow letters and envelopes. We still received the same return. 

Our 3rd touch will consist of a typed letter ourselves and how the home owner can benefit from selling to us. We'll be getting ready to send these by the end of June.

None of the calls we received we motivated sellers. They all wanted 5-10% even 20% above market value.

Is it possible the list is worn out? How often does something like happen to other investors? How could I get around it? 

Thanks guys, we really appreciate the help. More than half of our income goes into our real estate investing and we feel stuck and lost.

[Rick H.]

I agree with @Mohit Madaan (except that it's a mail 'piece'). 

There are so many factors. Your marketing ought to be considered a system, too.

For starters, I'm not aware of a single metro U.S. that isn't saturated with new marketers trying to get a toehold in real estate, competing with established marketers. 

It can be done, but it's an expensive proposition getting started. What I don't like about absentee lists is that the seller motivation is buried and obscured. Consequently, your USP must match a wide variety of motivations rather than a narrow band or single problem as does foreclosure, for example.

Referring to the Traffic > Conversion > Economics cycle, your initial response rate expectations probably ought to be reduced to about 0.5%. Then you have to deal with conversion issues. Since you are not converting any, the economics part of the equation is moot (at least until you either solve the problem, run out of money or stop).

The solution is to either increase your frequency of touches and narrow your message or choose a list that isn't so picked over. Also, rethink your target seller, don't be afraid to alienate the others, and clean up any holes in your system, such how phone calls are handled. We use a sophisticated system and a call center, however you could frankly replicate it for about $150/month (if it's even necessary).

Frankly, I believe that there are too many people chasing too few deals. This is precisely why I specialize in a niche or two.