Direct Marketing #1

June 3, 2012 · 25 comments

I talked previously about doing some direct mail campaigning in attempt to find leads for properties. Well, we’ve spent the past several weeks immersing ourselves in direct mail strategies, and finally started our direct mailing this past week (results of that campaign are below).

For our first mailing, we targeted “absentee owners with equity” – these are basically people who own properties that they don’t live in, but have equity in. These may be professional landlords, reluctant landlords (those who have a property that they don’t particularly want to have but haven’t disposed of yet), those who have inherited properties, and those who own properties that may have been in their families for many years. We decided to target this group of people first, as there is a decent chance they don’t want their properties (they don’t live in them) and there is a decent chance they will have the ability to sell at a low price if they choose to (they have a good bit of equity).

This may not be the most motivated group of sellers, so there was a decent chance we wouldn’t get any deals from the mailing, but we thought this would be an easy group to target at the beginning. The first big decision we had to make was how much of the work we wanted to do ourselves. While we could accumulate the list of names/addresses, write the letter, stuff the envelopes, address the envelopes, set up the phone line, set up the voice-mail, etc, ourselves, we wanted to get a mailing out very quickly and decided to hire a company that could do all of this for us (they were great, and if you are looking for turn-key direct mailing support, here’s their info: Full disclosure, that is an affiliate link, so if you order through them, I will get a commission…though I’m not affiliated with them in any other way except as a happy customer).

Basically, we just told them the parameters of the people/houses we wanted to target, and they did the rest.

Within a couple days, we had a list of 1000 names and addresses, and a week later, the mailing was sent. The letters were pre-printed (we could have customized the letter but we let them pick a generic one for us) with custom fields on each letter (name of owner, address), and a hand-written envelope that increased the odds that the recipient would open it. They also set up a local phone number for us; this went directly to voicemail (it could have come to our phones but we didn’t want to be inundated with calls the first time around) and each time someone called, the voicemail system sent us an email with the calling phone number and a link to the audio file. We even got the calling phone number when the caller hung up without leaving a message.

Here are the results of our first direct mail campaign (I think the bulk of the calls have already come through, though I imagine there may be some additional calls in the next couple days):

  • 1000 letters sent, targeting absentee owners with at least 40% equity on properties in my county
  • 83 Phone Calls Received (7% picked up the phone to call us!)
  • Of the 83 Calls, 51 were hang-ups who didn’t leave a message
  • Of the 83 Calls, 32 left messages (over 3% actually left messages!)
  • Of the 32 Who Left Messages, 5 asked us to remove their names from the list
  • Of the 32 Who Left Messages, 27 asked us to return their call to discuss a property
  • Of the 27 We Called Back, 25 we either haven’t spoken with yet, were not very motivated to sell their properties or just wanted and/or just wanted to know who we were
  • Of the 27 We Called Back, 2 were motivated (or potentially motivated) to sell

Here are the details on the 2 that are potentially motivated to sell:

  1. The very first person we spoke with owned 3 lots (one of which had an old, uninhabitable house) in nearby neighborhood. The lots total .62 acres and – except for where the house stands – are heavily wooded, so there would be a decent amount of work needed just to make the lots buildable. Houses in the surrounding area don’t support values where building would make sense. The owner was duped into purchasing the lots back in 2007 for $100,000 and wants to be rid of them. We’re not sure we could get much – if anything – for the lots, but we may make a very low offer, perhaps $2-5K.
  2. The next most motivated person was a gentleman who inherited a house from his parents a few years ago. While he’s not willing to “give it away,” it’s in one of the best school districts in Atlanta, and things in that area sell very quickly and easily. It sounds like he may be willing to sell at a price that would still make the deal worthwhile, and if not, there may be some additional opportunity for making money on the deal. We’re meeting with him early this week to look at the house and discuss specifics.

As you can see, we’re still working each of these potential deals (and still have about a dozen potential sellers to catch up with on the phone).

I’ll post updates as we get more information and if any of them turn into an actual deal. We also have a LOT more direct marketing in the works (we have a very interesting business model that we’re planning to pursue over the next few months), so stay tuned for that as well…

25 responses to “Direct Marketing #1”

  1. Kristine-CA says:

    Really appreciate hearing about your entry into mail marketing. Your call response rate is great. Have you had a chance to count the number of “returned as undeliverable” yet (nixies). In some of my mailings it’s as high as 10%. Which actually makes your call rate better. 🙂

    There’s value in the nixies. Tracking down the owners and/or figuring out the situation on those property address has been a great lead source for me. You might not have time to do it and there’s a learning, but you may be able to find or train someone to help you with that. Happy marketing.

  2. Sean says:

    How did you segment your list? Did you break it down by county, zip code, etc?

  3. J Scott says:

    Hi Sean,

    I started to do it by zip code, but didn’t have a big enough list. So, then I went to my favorite cities, and still didn’t have a big enough list. Then I expanded to my entire county, and was able to generate at least 1000 names (which was my goal).

  4. J Scott says:

    Hi Kristine –

    That’s interesting. I hadn’t even thought to ask the company I used about return mail (they sent the letters, so I would expect them to get the returns). I’ll have to do that…thanks for the tip!

  5. Kristine-CA says:

    J: In my experience, the best mail marketing has a local return address. Did you receive a sample piece mailed to your address at the time YLM did your mailing? What return address did it have?

    Another thing to think about: Your hang-up rate. 51 calls? You have no way of knowing if that was lack of motivation or confusion or turn-off of the seller when they reached a voice mail. I have not found it to be true that filtering lead calls through voice mail necessary proves motivation. Really depends on the voice mail and whether it sounded like a real buyer that would call them back, or a company that was filtering leads. I’ve closed a lot of deals with buyers who would never leave a message on a generic sounding voice mail system and who would never ever fill out a website form. Hopefully, you are planning some back track marketing to those phone numbers? Just some things to think about.

  6. J Scott says:

    Kristine –

    Thank you so much for the information/advice! This is truly very, very helpful…

    To answer your questions:

    – I don’t know the return address (it may actually have been my PO Box now that I think about it…I’ll have to check the box tomorrow). For some reason I didn’t get a mailing, and he put another one in the mail for me, but I haven’t received it yet. It may very well have been a local PO Box, but perhaps PO Boxes aren’t good either…thoughts?

    – The voicemail was very business-like and long. It was a horrible user experience, but we decided not to change it for the first mailing campaign. For the next campaign, the calls will be routed to my wife to answer (through a Google Voice number so she’ll know it’s a DM call); if she doesn’t answer the voicemail will be her asking them to leave a message in a personal tone. I assume that seems better?

    – And yes, we’re calling back the hang-ups, though we haven’t gotten a lot of response from that group (not surprisingly).

    Thanks again for the info and help! Any other tips, feel free to email me directly…I’d love to pick your brain some time!

  7. Gabe Larkin says:


    Your call rate is similar to mine, but your hang up rate is much higher. It is more than double mine. I would change your voice message ASAP. I speak in a plain voice and ask them to leave their name and the property they are calling about and a good time to return their call.

    Also, I second Kristine’s suggestion that you have a local return address. I was in negotiation with a seller a couple of weeks ago who told me she gets a lot of direct mail from investors and automatically throws them in the trash, but she opened mine because it did not appear to be junk mail and when she started reading it she decided she had put off dealing with the property long enough. I have done some light reading on the subject and the cliff notes are humans tend to form an opinion within a few milliseconds of looking at piece of mail (actually the research was on advertising but the conclusions seemed valid for direct mail imo). Thus, if your mail piece signals corporate junk mail, then you automatically are associated the loads of other junk mail they receive; automatically on par with those guys that mail me all the time to tell me I just won a million dollars or whatever. IOW you are starting out down in the count and a long sterile voice mail likely serves to reinforce that negative notion.

    It’s just a thought, and worth what you paid for it, but good luck.

  8. Brad says:

    I am curious on what information/sources they used to define the population to send the letters to? Did they simply use sales date/price from the county auditor with a set of assumptions or was there more analysis completed?

  9. J Scott says:

    Hey Brad,

    Honestly, I don’t know the answer. The list was generated by a list source provider, and I’m not sure where they get their raw data. That said, based on the feedback generated, it does sound like the list is pretty accurate in terms of ownership, date purchased and amount of equity captured. But, I don’t know how these list companies acquire their data.

  10. J Scott says:


    Great advice…I sincerely appreciate it. We recognized early on that the voicemail was horrible, but wanted to let this campaign run its course before we made any changes. But, the voicemail was the first thing we changed for campaign #2, which should get mailed in the next week or two.

    And your point about making the mail look personal as opposed to commercial is very well taken. Our plan is to handwrite all envelopes, use a local return address (thoughts on PO Box vs address???), not use pre-sorted or bulk-mail stamps, and to either hand-write the letter that is sent or use a form letter with a hand-written note attached to it.

    Our targets for the second mailing will be substantially different (not targeting absentee owners anymore), so it won’t be an apples-to-apples comparison, but should be interesting to note the differences in response nonetheless.

    Again, thank you for the advice! Much appreciated…

  11. Jarred Smeltzer says:

    J Scott,

    How much did this cost you in total? I am just wondering. It will be interesting to see if your expenses paid off.

    Thanks for sharing,,,

  12. J Scott says:

    Hi Jarred,

    For the list, I paid $.19 per name, and for three mailings to each person (a letter then a postcard and then another letter), I paid a total of about $2.20 per name. This included all materials, labor, phone line and voicemail. I could have paid a lot less for a single mailing, but wanted to see if the repetition pays off by doing three mailings in short order.

    So, the total was about $2400 (and I still have two more mailings to all of these people). One deal would cover several of these types of mailings.

  13. Gabe Larkin says:


    I do not use a PO Box for a return address, and I believe that on the margin a PO Box return address will cause some people to reject your piece before the open. Since you are mailing in batches of 1000 you should be able to get some statistically valid sample sizes in relatively short order and put the issue to rest.

    My envelope is similar to what you are describing. I only use first class stamps and I print with a handwritten font. One personal preference I have is increasing the size of the font on the address to mimic the average size of human handwriting. Also, I have done limited testing on blue ink vs black ink for the address and did not notice any significant difference over a small sample size.

  14. J Scott says:

    Gabe –

    Thanks again. The decision not to use a P.O. box is probably a no-brainer — we got a box today that has a full street mailing address, which will certainly help. And for the envelope, we’ve actually found someone to hand-write them all for the first batch — after that, we may try printing with a hand-written font to compare response rates.

  15. Shane Woods says:

    Hey J, I was just talking with Michael today from YLM about some letters & a list. When you use their 1st class stamp option, the envelopes are all hand addressed, then the whole batch is sent to you stamped. Then you drop them in the mail locally so they’ll be postmarked from your home Post Office.

    Maybe you already knew this, but I thought it was interesting vs. their standard mail version where they mail them with the standard postage and no postmarks. Also, I think the envelopes are printed, not hand-addressed with their standard feature.

  16. J Scott says:

    Shane –

    Thanks for the info…I actually hadn’t discussed that in detail with Michael, so I didn’t know that was how it worked. Thanks for that! For the second batch, we’re actually going to be doing the mailing ourselves (we’ve hired some part-time folks to address and stuff envelopes), so I’ll be able to compare the results.

  17. What school district is Respondent #2 in, out of curiosity?

  18. J Scott says:

    Hey Paula –

    Walton High School in East Cobb (Marietta)…

  19. Sean says:


    One thing that I thought about doing was outsourcing the phone calls to a 24/7 answering service that would explain that they needed to gather some simple info for their boss. I would create a simple back end site with the questions that I want asked, where is the property, amount owed, reason for selling etc. that the operator could fill out. It would then be submitted to you so that you got an email with all of the leads data prior to your followup call, essentially screening the lead so that you have all of the info necessary while getting 100% of the calls answered without having to do it yourself or the overhead of a secretary. Might be something worthwhile if you are considering doing this with volume..

  20. J Scott says:

    Hey Sean –

    I love that idea for the possible retail leads (like this first campaign). Moving forward, I think we’re going to be focusing a lot on short sale leads (homeowners who are underwater on their mortgages and want out) — for those, I have a feeling that the callers are going to need a lot of personalized attention on that first call (they’ll have questions about how short sales work, about their specific situation, etc), and so for the time being, I think we’re actually planning to answer the calls ourselves. Moving forward, we may hire a personal assistant just to answer calls and “sign them up.”

    But, for retail leads, we already have a script and list of questions, so an answering service is a great idea!

  21. ELaBelle says:

    Hey J,

    I love the detail you give with the direct mail campaign. I’ll be sending my first batch out in the next week or so and I’ve been researching it as well.

    I have learned with internet marketing, the best thing you can do is design your tests up front, and assume it would work for direct mail as well. For example, if you have a group of 1000 to send to, split that into 2 random groups of 500 and change one thing between the 2 groups and find differences. Say, one group of 500 goes to an answering service and the other 500 is personally answered. Next mailing change what the letter actually says.. I’ve found in internet marketing that things you don’t expect to have much impact actually do. This is the way I plan on attacking direct mail.

    I like the idea of targeting underwater homeowners. I’ve given that some thought lately as well.

    If you are printing yourself there is a blog post on about how he made yellow letters on the cheap. It involved some software that captures your handwriting or something, it seemed pretty cool. I haven’t had a chance to go back and find it but I’m sure a simple search would do.

    Also, I came across, they do handwritten letters and envelopes pretty cheap. Might be worth checking out depending on how cheap your part-time workers are.

    These are some things I have found in studing up on the subject, hope it helps!

  22. J Scott says:

    Hey Eric –

    We’re very much on the same page as you. We do lots of A/B testing of marketing materials and track the various response rates. For upcoming mailings, we plan to track various letters, attached notes/cards, different envelopes, different stamps, various timing of mailings, answering vs voice-mail (and different voice mails), etc.

    Hopefully I’ll have lots of details to report in terms of what is working and what is not. Like you, we’ll be targeting distressed homeowners for the forseeable future.

  23. shafiqurst21 says:

    I first started flipping houses because of my love of the “flipping” shows! While most
    of them have gone by the way-side, you are correct that watching HGTV and other homedesign programs truly give investors a look at up-and-coming styles and also a peak inside the mind of future buyers (no more brown paneling!). Buying a home is such an emotional adventure, and most buyers truly do want just what they see on TV.I also love the DIY shows that give me tons of good ideas on how to do maintenance and rehabs better. I seem to learn something new every time I watch one of those. It’s not often we can say that we learn from TV!
    Keep up the good work!

  24. T says:

    Hey J –

    Once you get someone on the phone, do you have a script or a set of questions that you ask each person? Essentially, what is your “sales call” process in order to qualify the lead and decide if you are going to go look at the property in person?


  25. J Scott says:


    We have a one-page form with a list of questions we want to know the answers to. We don’t treat it like an interview or QA session, but just have a conversation with the prospective seller and ask the questions as the conversation progresses. We try to be informal, but also thorough, so that we have all the information we need by the end of the call.

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