Originally posted by Blair H.:
Hi Michael
My name is Blair, and I'll tell you up front, I'm a little biased towards direct mail because I run a direct mail service, but I believe the reason there is not a lot of info about leads-to-deal ratio out there is because it is a bit nebulous. Some people say 25-30 leads to get a deal. Others say 50. But then how to you define "lead"? There are too many variables to determine a standard leads-to-deal ratio, the biggest variable being yourself.
I actually just wrote a post on my biggerpockets blog about this very topic. Here's the link: http://www.biggerpockets.com/blogs/3572/blog_posts/25567-deal-to-leads-ratio-or-how-many-leads-does-it-take-to
You may find it useful. You, too, Brandon.
As to your cost per deal of $1500, this sounds somewhat in line with most investors. I believe $1000-1500 is the typical range people shoot for in terms of marketing cost per deal.
One question - are YOU going to be preparing the 23,000 direct mail pieces you're sending out? Yikes! :-) I saw that on your spreadsheet. Nice spreadsheet, by the way. Did you make that whole thing yourself?
I used to spend a LOT of time making spreadsheets to analyze various cash flow projections for my new businesses. After a while, and maybe you'll find this too, I realized that I would usually spend way too much time tinkering with my spreadsheet and way too little time doing the important work like marketing. Ha! I'd just say, don't fall into that trap!
Hope this info helps.
Hi Brandon!
I plan on printing all 23,000 pieces of direct mail (with envelopes) at home using a handwritten font I have but tentatively plan on hiring someone to pack envelope with letter and stamp (depending on how tedious and annoying it becomes, I also work a more than full-time job in the Military right now so I might just hire someone).
Thanks for the compliment on the spreadsheet, I did make it myself, I'm a little bit of a tech geek so I know my way around computers. I'll be sure to check out your blog and comment on it when i become a little more familiar with direct mail.
I'm kind of OCD when it comes to tracking every bit of cost & statistic I can so i'll be tracking what my response and conversion rate for every yellow letter template I send out.
I can see what you mean when you say you find yourself tinkering with spreadsheet too much! I too find myself doing the same but when I think about Wholesale marketing, how much more can you do other than send out the letters, postcards, and put out bandit signs? Once you do all that it's kind of a waiting game?
Also, your blog says you don't use yellow letters because it generates uniformed leads, what kind of marketing do you do and who is your demo? AND isn't every lead somewhat uninformed in some sense? An uninformed lead can still be motivated to sell their property. My limited understanding of marketing is cast the net wide and catch EVERY fish you can big or small. Its a numbers game in my opinion and you want to market to every single person you possibly can.
