As a real estate professional you know the "ins and outs" of listing and selling homes. After all, that's your livelihood and you're the expert. But when it comes to direct mail, are you still the expert? There are a lot of factors that must be considered in order to make your direct marketing postcard campaigns successful. So before you spend even a penny on the next campaign, familiarize yourself with the tips suggested here to ensure that you maximize your profits and minimize your costs. After all, the old adage still rings true today - a penny saved is a penny earned - but in this case we're talking thousands of pennies.
Utilize the 40-40-20 Rule for Success
We've all heard the 80/20 rule of sales - 80% of your sales will come from 20% of your customers. Well, in direct mail, we have the 40-40-20 rule as the most important thing to factor in as you plan your direct mail campaigns. The rule reflects that your success is dependent on:
40% - the list
40% - the offer
20% - the creative
The List
Whether it's a segment of your internal list or an external list, the list you use for direct mail is critical. You need to ensure that this list is composed of people for whom your offer is relevant. There are three types of lists:
- Your customer/prospect database
- Response Lists
- Compiled lists
Your customer/prospect database -- Your own internal list of customer and prospect is going to perform better, in terms of response rates, than most lists. However, you should look into obtaining new prospects/names to augment your list and keep it fresh.
Response list -- A response list is composed of people who have taken an action of some kind to get on the list. For example, they have subscribed to a magazine, bought something from a specific retailer, attended a trade show, or a host of other actions. The magazine publisher or website owner etc... then rents access to those names to direct marketers. Response lists usually generate a higher response rate than compiled lists because the list members have taken a positive action to demonstrate their interest. Response lists are rented on a one time use basis.
Compiled lists -- Compiled lists are derived from public records. Primary sources include the yellow pages, directories, phone research, government data, and any other information that is in the public domain. Compiled lists are less expensive than response lists. Compiled lists are good sources - often the only sources - for providing large number of names within a limited geographical area. They have greater penetration allowing you to reach people and companies unavailable through response lists. Compiled lists are also useful for reaching consumers with specific demographics. For example, someone who has just bought a house and moved into your neighborhood will most likely not need your services right now. If you use a compiled list, you can specify that you want homeowners who have been living in their home for more than 3 years and have two children. That enables you to eliminate renters and new homeowners, saving you money in postage and production of postcards.
A Word or Two About List Pricing -- Pricing structures vary and you'll want to factor this into your planning. Virtually all lists have a minimum order quantity and minimum dollar amount in their price structure. At most mail houses or list brokers, the common minimum order quantity is usually 5,000 names. We offer lists starting at 250 names (if you really want the big push we can get you a list that moves upward of 600,000 names) with a minimum base price of only $49.00 -- well below virtually all other sources. The price structure is generally the base price per thousand names (typically represented as $/M).
The Offer
Of course, your service must be useful and timely for your target audience. Otherwise, it doesn't matter how good your list is. I'll discuss this in greater detail in my next blog post.
The Creative
The creative needs to express your offer in a clear and compelling manner that will gain the attention of your customers. Consider using a larger type of postcard, or thicker card stock or a glossy coating to make your promotion stand out in the mailbox. However, it is important to remember that the right list and the right offer will generate responses even if the creative is poor. On the other hand, the best creative in the world will fail completely if either the list or the offer is unsuitable/ill-matched/poorly chosen.
Would you like to read more? See Direct Mail Secret #2.
Chris Hendricks
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Very informative Chris. I've only mailed to my SOI and have been contemplating adding neighborhood lists to the mix. this will give me some ideas for getting started and for refining the content and offer on the mailings.