I just wanted to give an update on the Direct Marketing campaign I mentioned about a month ago…
Here are some details:
Target Recipients: Homeowners in my county who were 30/60/90 days late on their mortgage payments.
# of Recipients on List: 2200
Marketing Goals: The goals for this marketing campaign were two-fold:
- Short Sale Investments: First and foremost, the goal was to get properties that would serve as investments for our company. These would most likely be short sale purchases that resulted in investments that we were able to rehab and resell to retail buyers (homeowners). Our typical profit on each of these deals would likely be about $20,000 (our average profit for all deals done over the past 4 years).
- Short Sale Retail Listings: For any leads on properties where we weren’t interested in the property as an investment (it didn’t fit our criteria or we didn’t think we could get enough of a discount), we have a short sale team that we are working with that will be listing the property as a retail short sale, and will give us 25% of any commission generated via that potential sale. Typical commission to us would likely be about .75% of the sale price, or about $750 for a $100K short sale.
First Mailing Details: The first mailing consisted of a personal letter to all recipients. The letter was hand-signed, with a hand-written note on each, and the envelope was hand-addressed with a first-class stamp. The envelope was a standard white business envelope and the letter was standard 8.5″ x 11″. The first mailing was broken up over two weeks, with 50% of the letters hitting on a Monday/Tuesday and 50% of the letters hitting on a Wednesday/Thursday. 50% of the letters had the handwritten note on the letter and 50% had a handwritten note on a post-it attached to the letter. 50% of each subset of letters had a business card included.
Second Mailing Details: About two week after the first mailing, we did a second mailing to the same list. This mailing was broken up into 2 segments: The first segment (called our “Top Tier List”) was the approximately 150 houses where we were intimately familiar with the subdivision (we’d done other properties in the neighborhood) and where we were 100% sure we wanted to buy the house. The second segment consisted of the other 2000 or so recipients. The Top Tier List received a “Hallmark Card” that was handwritten, along with a hand-addressed envelope. The rest of the recipients received a yellow postcard with black-and-white print.
Third Mailing Details: The third mailing to this list has not gone out yet, but will consist of personalized letters to the 2000 or so recipients remaining on our list (the original list minus those that have already contacted us).
Methodology for Receiving Calls: All calls were forwarded from our Google Voice number directly to my wife, who answered the calls if at all possible. When not possible, the call when to a friendly, non-professional-sounding voicemail message from my wife.
Cost of First Two Mailings: The total cost of the first two mailings — 2200 first letter mailings, approximately 150 Top Tier Hallmark Card mailings and approximately 2000 postcard mailings — was around $3000.
Results of First Two Mailings: The results of the first two mailings were unspectacular — while not horrible, we were hoping for more. Here is tally of the results of the approximately 4000 pieces of mail to 2200 recipients. These numbers are as of today, though calls are still coming in, so I expect these numbers will increase:
- RETURNED LETTERS: 46 Recipients (2%) — These were the names/addresses where our mailings were returned by the post office undelivered.
- NOT INTERESTED: 12 Recipients (.5%) — These were calls where the recipient acknowledged that they received a communication but indicated that they weren’t interested in our services (though they didn’t ask to be removed from our mailing list).
- REMOVE ME: 22 Recipients (1%) — These were calls where the recipient asked to be removed from the list (sometimes not so nicely).
- FOLLOW-UP: 5 Recipients (.2%) — These were calls where the recipient ultimately wanted my wife to follow-up with them, either because they weren’t the principal in the transaction or they wanted to discuss with someone else.
- INVESTMENT LEADS: 0 Recipients (0%) — These were calls where the recipient wanted to get the short sale process going and where we considered the property one where we’d make an offer ourselves in hopes of getting the property as our next investment deal.
- SHORT SALE LEADS: 8 Recipients (.4%) — These were calls where the recipient wanted to get the short sale process going and where we were not interested in the property as an investment — we referred the lead to our short sale team in the hopes they’ll sell it and we’ll get a commission.
- LISTINGS: 4/2 as of today (.2% / .1%) — These are SHORT SALE LEADS that have actually been listed by our short sale team and also how many of those listings are currently under contract to sell.
Income From Campaign: Unfortunately, so far we haven’t gotten any potential investments out of the campaign, so the payoff isn’t going to be overly large. But, from the 4 leads that have been listed, the 4 leads that have been passed to the short sale team that they are working on and any additional leads that come in from the first two mailings, it appears there’s a very good chance that we’ll at least break even on the campaign and hopefully turn a small profit from the commissions we earn. Because short sales can take months to complete, we won’t have final results for a while…but I’ll certainly continue to post updates on our progress.