Generating Off-Market Deals; how to define your direct mail marketing

Maybe a disclaimer before we jump into the content; direct mail is referred to as interruption marketing...or outbound marketing and it's inferior to permission marketing, also known as inbound marketing (). That said, direct mail remains a staple of sourcing deals from "off-market." As a matter of fact, it might be your best weapon for gaining access to “off market” deals...

THE SITUATION.

We're three weeks into planning a direct mail marketing campaign and nowhere close to getting a mailer out the door. We've had weekly planning calls and paid for outside help. We're on our third print shop and the design work is still not final.

Shit… how hard is it to just get a direct mail campaign up and running? Well, a lot harder than it appears; thus, the point of this post...

Putting together an effective direct mail marketing plan is difficult, but possible with the right guidance. Most folks make this harder than it needs to be...so, remember that without implementation all the planning in the world won't help.

Here are some tips to get your direct mail campaign up and running so you can avoid the same mistakes and pitfalls we experienced early in our careers.

TIP 1: DEFINE YOUR TARGET AUDIENCE.

Who are you mailing to? Are you planning to send a postcard to everyone that shows up on the absentee owner list? I recommend a blended approach that considers more than situation-based marketing. (That's where you target people who are experiencing a situation that leads to them being motivated to sell....like filing an eviction on a tenant or falling behind on loan payments).

If you are mailing to a typical “motivated seller” group, but not filtering location, you may end up with dozens of motivated sellers, but land properties in locations or conditions that don't meet your standards...this is the wholesalers game, and why 95% of wholesalers farm trash properties. Get granular, but not so refined that you miss prospective sellers. It makes little sense to market for properties you would never consider investing in.

TIP 2: ENSURE YOU HAVE GOOD CLEAN DATA.

Once you get a mailing list, you may use it for a year or better, making your starting point extremely important. If you use a list broker, make sure you specify your criteria in writing and confirm what you are getting. If you are using a service like List Source, you'll have way more control and can fine tune data across many variables. It's a lot harder to change your mailing criteria 3-mailings into a campaign than it is to start right from the beginning.

TIP 3: KEEP YOUR LISTS WELL ORGANIZED AND CLEAN THEM ROUTINELY.

A mailing list in spreadsheet format saved to your desktop isn't going to cut it once you have multiple mailing campaigns running at once. And spreadsheets are for financial calculations, not tracking things or organizing data. Consider using a database tool, or at minimum, cloud- based storage.

Our team uses Air Table, an online database management tool that helps us organize, filter, and scrub complex data, as well as track every metric of each campaign.

You can see an example of one of our direct mail reports HERE.

TIP 4: PLAN MULTIPLE MAILINGS.

The magic happens in the frequency of multiple mailings. Before you pull the plug on a campaign, I suggest you execute 4-6 mailings per group. Keep good notes about campaign return on investment to weigh the success of your campaign…(in reality, it only takes one good deal to pay for your annual direct mail campaign). If you're dead in the water by your sixth mailer, it’s time to go back to the drawing board. Add lessons learned to your notes (i.e. what went wrong) and use that insight to improve your next set of mailings.

TIP 5: HAVE A WAY FOR FOLKS TO GET IN TOUCH WITH YOU AND BE SURE IT WORKS.

I use a professional answering service and Google Voice with a forward to at least one other line with a professionally scripted voicemail message. If you're working alone or just getting started, think about a service with a virtual assistant or agency that specializes in phone answering. There are plenty on Upwork or Fiverr that can meet your needs. Another interesting trend you can take advantage of are virtual office services in co-working spaces; these are good options if you want a physical location for your answering services and a mailing address.

TIP 6: PUT A SOLID TRACKING SYSTEM IN PLACE AND USE IT ROUTINELY.

Here is an idea of the data points you should consider recording:

• Target Audience
• Mail Date
• Mail Piece
• Promotional Code
• Message
• List Criteria
• Mailing Frequency
• Total Mailings Scheduled
• Mailings Remaining
• Starting List Count
• Number of Returned Pieces
• Returned Rate
• Number of Responses
• Response Rate
• Appointments Scheduled
• Appointment Rate
• Number of Offers
• Offer Rate
• Number of Contracts
• Contract Rate
• Number of Closed Deals
• Closed Rate
• Cost per Piece
• Mailing Cost
• Campaign Cost
• Lead Source
• Mailing Vendor

TIP 7: SET A BUDGET...or not...

Most every article you read about direct mail will tell you to set a budget up front...seems logical. I disagree; initially anyway...there is a natural learning curve with everything we do, including building a direct mail plan and budgeting campaign costs. As you become more familiar with the process of creating direct mail campaigns, you will improve your ability to create accurate budgets.

And it's arbitrary initially. Sure, I would like to mail $50,000 a month worth of direct mail, but that is a long-term goal and not always an option your first year or two in the business. When you are first starting out, work backwards.

• Pull your lists and get counts
• Calculate your per piece mailing costs to an approximate
  • If it's basic, throw in $1 per piece
  • If it's elaborate, your campaign will rise to $2 per piece or more
• Calculate your print, postage and mailing service cost
• Multiply the count, the per piece cost, the mailing service cost, and the number of mailings to get your basic campaign costs;

• List Count: 500
• Mailings planned: 6
• Postcard cost: $0.75/ea.
• Postage: $0.35/ea.
• Print and mailing services: $150
• My time and effort: $150

So, back of the napkin calculation says you are going to spend $3,300 on mailiers, $900 on print & mailing services, and $150 of your time for a campaign cost of $4,350...or $1.45/piece across your 3,000 total mail pieces.

After mailing thousands of pieces, our cost is consistently between $1.30-$1.75 per piece across different mediums such as postcards and letters. You'll have to tweak things a bit, but as you multiply mailing costs across your list count, you will learn:

• The costs of your campaign based on cost per item and the number of contacts
• If you can afford your campaign or if you need to scale back or alter criteria
• How to properly budget for future campaigns
• How to scale your campaign and spend as you increase profits from your off- market deals

TIP 8: THE LAST TOKEN OF WISDOM...

I know it's not always possible but hire a professional as soon as you can. We all can't run off and hire a marketing consultant, graphic designer, and printer at the drop of a hat...I get it. I've written postcards by hand for months at a time, sealed thousands of envelopes, and slapped on stamps until my fingertips wore off...

You may be going through this right now or at the tail end of this stage. If you can bypass it altogether, then do it. If not, use some of the cash you save from all the deals you'll be getting to sub-contract this process out.

What other direct mail marketing tips do you think are worth sharing? We’d love to hear your thoughts; drop us a line or stop by the website for more information about investing in real estate