Who has flushed money down the toilet because of a less-than-successful real estate direct mail campaign or other offline marketing strategies involving print material?

I come across one question over and over again in different forums and places on the web: “Does direct mail work for realtors?”

Direct mail works for realtors if you consider this method’s typical key marketing performance indicators – a response rate or lead conversion rate of 6%, respectively.

To increase your chances of success, you also want to test your copy online beforehand and constantly track your responses and A/B test mailer versions.

There is some good and bad news here: There is always risk involved when starting an untested marketing campaign.

The good news: If you want to start with direct mail, you can do offline real estate marketing campaigns in a smarter and more prepared way that increases the odds of success and reduces costs.

The bad news about this approach is that you will need to spend additional money preparing a digital marketing channel in addition to direct mail marketing costs. I will tell you how you can do just that (with no guarantee of success).


Promising Statistics and Marketing Performance Data about Direct Mail

When it comes to direct mail, you can usually count on a response rate or lead conversion rate of 6.6% (source), and 42.2% of the recipients scan or read the piece of direct mail (source).

Additionally, 39% of consumers decide to do business for the first time based on the direct mail they get (source).

CostsDirect Mail
Printing Costs per Piece$0.5
Total Printing Costs (5,000 pieces)$2,500
Design Costs (if you use Fiverr)$7.50
Design Costs per Piece$0.0015
Total Distribution Costs$5.625
Distribution Costs per Piece$1.125 ($0.25-$2)
Total Costs per Piece$1.62

Average Response Rate (Lead Conversion Rate)6.6%
Pieces You Need to Send per Lead 15.1
Cost per Lead $24.46
Cost per Sale (assuming a 10% lead to sale conversion rate) $244.60

So, by looking at the table about the marketing performance data, you will have to consider, on average, a cost per lead of $24.46 and a cost per sale or closing (assuming a 10% lead to closing conversion rate) of $244.60.

You can make every marketing channel work, also direct mail…

If you master a particular marketing channel, every marketing channel can work. I know that’s kind of common sense.

But suppose your direct mail, for example, costs you the hypothetical and ridiculous amount of $10 apiece, but you have a 99.999% open rate, and out of them, you get successful deals 80% of the time, listing contracts, etc.

In that case, you have a great and overall profitable campaign.

But if you read between the lines of the question “does direct mail work for realtors?” from above and apply some laymen psychology, you might hear this emotionally charged message:

“I am afraid to flush money down the toilet (like in the picture below). I am insecure and uncertain if my offline real estate marketing campaign will be successful. I would like to make sure that my campaign has a high success rate and mitigate my risks and thus, costs as much as possible.”

does direct mail work for realtors

Prepare Your Real Estate Direct Mail Campaign for Tracking, Analytics, and Further A/B Testing

Before you have your mailers printed, there is one last step involved, so you can do it in a prepared way.

The main reason is that you can track and improve the campaign over time.

So, what else can you do besides create a good copy for your mailer?

You want to add a QR code.

The latter is a topic I already covered in my article about real estate business cards. A QR code consists of black squares arranged in a square grid on a white background.

It’s sort of a “matrix barcode” that different devices can read, such as your smartphone camera.

If you look to the top right, you will find one, for example.

The one you see there leads you directly to the main page of my website, hackingrealestatemarketing.com.

It just needs to be scanned with your phone camera.

You usually use this optical label to link to a website or an application.

You can create these QR codes with the two applications, Switchit and QRStuff.

Now, how can you use a QR code for tracking purposes of your direct mail campaign?

One of the tracking methods you can use is to make different versions of your mailer.

You may send version A of the mailer to one geographic area and version B to another.

Besides using different dedicated phone numbers for each mailer version, you can also use a QR code linking to a dedicated landing page.

Using different dedicated phone numbers for each version lets you know who calls you and when from which mailer version and geographic area.

And the same is true for the QR code.

Only leads generated from mailer version “A” are captured on the landing page for mailer version A since you linked this landing page to the particular QR code.

You could do something similar with dedicated email addresses.

The minor preparation would be getting a dedicated phone number and not several dedicated landing pages for each mailer version.

The second way to track your direct mail campaign involves even less preparation, but it’s a bit riskier.

You could use just one phone number (your usual business phone number) and/or one landing page for all different versions of your campaign.

But when you answer the phone, you would have to ask each new lead where they heard about you.

Regarding the landing page, you will have to implement additional questions in the contact form and ask the same question.

Why is this riskier?

Your potential customer might not remember anymore how they found you.

They might confuse you with competitors and distort your marketing performance reporting of that particular campaign.

Suppose you want to ensure that you can track your campaign from every possible angle. 

In that case, you could use all approaches: dedicated phone numbers, dedicated landing pages with QR codes, and always asking where the leads are coming from.

Why does all this extra work for tracking in the first place?

With each marketing campaign, your goal should always be to improve it over time through different tests.

To do that, you need to know your test results and where you can improve.

So, in direct mail, the question you want to ask yourself is which mailer version brings you the most results.

Once you know that, you can create a new mailer version that competes with the winner mailer version of your most recent campaign.

And maybe the new version will be even better than the last winner.

Then you start again, try to beat the new winner again, and so on.

By doing that, you can make direct mail for realtors work and increase your chances of success and even the average key marketing performance indicators of direct mail (a 6% response rate, respectively).

This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.

Tobias Schnellbacher