Who else 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?

In this context, there is one question I have read 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 take into consideration the typical key marketing performance indicators for this method – 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, track your responses and A/B test mailer versions constantly.

There is some good and bad news here:

There is always risk involved when starting an untested marketing campaign.

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

The bad news for this approach: In addition to the marketing costs of direct mail, you will need to spend additional money preparing an online marketing channel.

In today’s article, 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 make their decision 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
Performance 
Average Response Rate (Lead Conversion Rate)6.6%
Pieces You Need to Send per Lead15.1
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 take into consideration, 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 certain marketing channel, every marketing channel can work. I know, that’s kind of common sense.

But if 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., 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), because I am insecure and uncertain if my planned offline real estate marketing campaign will be successful, and I would really like to make sure that my campaign has a high success rate and mitigate my risks and thus, costs as much as possible.”

The 5 Steps to Make Your Direct Mail and Other Offline Real Estate Marketing Campaigns Work

1) Identify the Copy Elements of Your Offline Campaign

Your print material for the campaign could be postcards, yellow letters, print magazine ads, deal marketing materials for investors, open house brochures, etc.

To keep it simple, let’s just focus on yellow letters.

What testable elements does a yellow letter have?

There is the copy that goes on top of the mailer and there is the actual copy (content) of the yellow letter.

2) Identify/Research the Target Group

Depending on the type of real estate professional you are, your target group for this type of offline real estate marketing campaign will be, most of the time, sellers, both retail or investors.

Then, your target group will be located in a certain location or neighborhood.

Depending on this information, your copy on the print material will adapt and can have different angles.

3) Collect Further Information about Your Target Group

Now that you know a bit more about your target group, you might find addresses via different tools such as Listsource and also get phone numbers.

But this step isn’t necessarily required, since the most important information should be the neighborhood and the type of seller you want to target.

But if you can get this information, you might get your ad spend down a bit more for the test later.

4) Create Different Versions of Your Copy

Now comes the part where you need to apply some copywriting skills to the mailer and the yellow letter content.

And you will create different versions for both.

I can’t give you all the necessary knowledge about copywriting in this short paragraph, but as you might guess, it’s a very important part.

Copywriting fills books and is an art in itself.

If you want a short formula, you can get my copywriting checklist for real estate marketing below this article.

But to continue with this example, I’ll give you a short one.
It is “problem,” “agitate,” “solve.”

It’s a variation of the more known AIDA (Attention, Interest, Desire, Action) formula.

Both can be combined, and would look like this: Attention, Interest/Problem & Agitate, Desire/Solve, Action.

Where should you apply each part?

  • Attention and maybe a tiny bit of Interest/Problem on the mailer
  • On the yellow letter itself should be the whole package Attention, Interest/Problem & Agitate, and Desire/Solve and Action

So, you describe or draw their attention to the problem (e.g. “Why haven’t you sold your nice house at 1234 Mainstreet yet?”).

Then, you elaborate on the problem a bit further and then, you solve it by offering your solution.

In this case, what type of deal you could offer, etc.

For the mailer, you obviously can’t apply the whole formula.

You should focus on the Attention and/or a tiny bit of the Problem part, which corresponds with the headline of a sales letter or sales page.

You can brainstorm different text ideas for the mailer, such as:

  • “To Mr. XYZ, but don’t open it, because it could change your life.”
  • “Mr. XYZ, it’s not your fault that you haven’t sold your nice house at 1234 Mainstreet yet.”
  • “Mr. XYZ, I am surprised that I can even send you a letter to a vacant house.”

Since we can’t test them online, I didn’t mention the other physical attention-grabbing techniques that you can use for mailers such as:

  • Oddly-shaped postcards, maybe in the shape of a house
  • Handwritten mailers
  • Crumbled and/or aged-looking mailers
  • Using Express Delivery Services (e.g. FedEx, DHL, etc.)

You can only test the copy or the main part of the copy.

With regards to the yellow letter body part, you can apply the whole formula and it should relate to the headline, or rather, the copy on the mailer.

5) Create an Online Marketing Campaign with Facebook Ads and/or Google AdWords (Only Search Ads)

Once you have different versions of the mailer copy and the yellow letter main copy, you can begin to test them via Facebook Ads and/or Google Ads.

Creating Facebook and Google AdWords Campaigns is something for another article, or rather an article series, so I will only be looking at the surface here.

How do you test the copy?

You use the copy for the mailer in your ads and see which has a higher CTR (Click-Through Rate), and use your different yellow letter copy versions on landing pages.

The higher the CTR for your AdCopy, the more intriguing the offer appears to be to your target group, the sellers.

So, you create a Facebook Ads and/or a Google AdWords campaign using the following data you have already researched:

  • Neighborhood
  • Phone Numbers

For the yellow letter copy versions, you create different little landing pages with your own website or other services such as one of the following providers below, which you A/B test:

At this point, it’s not really important if you convert a visitor.

Sure, it would be awesome to convert someone already, but this is about testing your copy for your offline campaign.

Most of the above landing page providers offer A/B testing.

Doing this is important, since you can let your yellow letter copies compete against each other and kick out the bad ones.

The same is true for your different ads.

After a while, you can create a new version, which you let run against the winner, and so on.

The metric for the landing page can be measured by using Google Analytics or the analytics data provided by the landing page providers.

Focus on the time spent on the landing page and its bounce rate.

A low bounce rate and a high amount of time spent on the landing page give you hints as to which copy is a winner.

To have enough data to be statically relevant, you might want to wait until you get at least 30 clicks on Google Ads.

With Facebook Ads, you have to wait a bit longer because of the learning algorithm they use, meaning you need at least 200-300 clicks.

This sounds like a lot of work before even beginning with the direct mail campaign, hence you will need some extra money besides your offline campaign budget.

So, you might have already concluded by yourself that starting off with direct mail campaigns first thing might not be the best idea because you should test it online anyways beforehand.

And the process for paid online traffic is basically the same as starting with paid online traffic in the first place.

An approach I would prefer and will elaborate on in another article is to start your marketing mix with paid online traffic to be able to collect market data faster and at lower costs.

Once you have a winning online campaign, you can expand your marketing channels to the offline world with an already tested and successful copy from your online campaigns.

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 are able to do it in a prepared way.

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

So, what else can you do other than creating a good copy for your mailer?

You want to add a QR code.

This is a topic I already covered in my article about real estate business cards.

A QR code is made 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 take a 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 type of 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 one.

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

By using different dedicated phone numbers for each version, you will know when you are called from which mailer version and geographic area a particular lead was generated.

And the same is true for the QR code.

Only leads generated from mailer version A will be generated 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 least preparation would be just getting a dedicated phone number and not several different 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.

When it comes to 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 other competitors, and would distort your marketing performance reporting of that particular campaign.

If you really want to make sure that you can track your campaign from every possible angle, you could do all approaches together: dedicated phone numbers, dedicated landing pages with QR codes, and always asking where the leads are coming from.

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

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

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

So, in the context of 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, and try to beat the new winner again, and so on.

By doing that, you will not only be able to make direct mail for realtors work, but also increase your chances of success and increase even the average key marketing performance indicators of direct mail (a 6% response rate respectively).