The Holy Grail of Real Estate Marketing: What Actually Works?

The only thing this marketing ignoramus can say with unshakeable confidence, is that marketing ain’t sales. The rest I’m not all that sure about. Though to be fair, the more I read, the more I’m confused. So many of those who put bread on the table giving marketing advice, disagree vehemently with each other on so many aspects of their trade. But that’s true in most disciplines, right?

Anywho, the more I read, observe, and try to understand about real estate marketing, the more I wanna ask the one question I think is almost never asked.

Is your marketing, whether in-house or from outside, producing bottom line, as in ‘your banker is happy to see you’ kinda results?

Since I generally couldn’t market my way out of a wet paper bag, I tend to use what works, discarding the rest. I suspect some of what I have discarded, failed due to my poor execution rather than bad marketing advice. Though Lord knows, I’ve paid for some pretty worthless counsel. Here’s what’s on my new menu.

Direct mail

Warm calls following direct mail

Blogging

IDX on company website

Seminars directed at ‘house’ agents — i.e. Rainmaker concept

What’s the Holy Grail of real estate marketing?

For my sake, let’s not make it too complicated. It’s marketing that predictably delivers wicked good bottom line results.

Did I say results? I meant results measurable in terms of increased bank deposits, not mountains of ‘leads’. Man, if there’s a marketing term that’s pretty much lost any real meaning these days, it’s ‘lead’. I’m surprised there isn’t a statue somewhere in homage to the lead. If there was any justice, it’d be the statue sportin’ the most pigeons.

Let’s really trash what seems to be the prevailing concept of leads while we’re at it.

Have you noticed how most marketing people want you to base the success of any real estate marketing system they tout, upon the quantity of leads, instead of increasing sales? Don’t get me wrong, they tell us sales will go up, but for the most part they’re sellin’ ways to generate leads. To be fair, their logical retort is that it’s not their fault the client isn’t enjoying significantly increased sales — they provided the promised leads, right? Again, is there any more bastardized term in real estate marketing than ‘lead’? It means nothing and all things — simultaneously.

If there’s anyone out there who generates fewer leads a year than I do, please raise your hand now. 🙂 Everyone I know triggers more leads from their online efforts than I. From 1/1 through 7/31 this year I’ve generated a grand total of less than 50. All are from blogging, as direct mail, warm calls, and the rest have been on the sidelines the last seven years. The IDX only went operational several days ago. The reason? I haven’t been able to do business in my local market. Now that I’m back, albeit in a pretty self-limiting way, all those marketing approaches are now back in my marketing arsenal with a vengeance.

Direct Mail

This has proven to be the most predictably successful marketing mode I’ve used over the last 23+ years. (First used mail in 1987) Nothing has come close to its results. In fact, based upon my experience, nothing I’ve ever used has even approached direct mail marketing for result$.

Want numbers?

I’ll use the late 1990’s as an example so there won’t be those who question results based upon a developing bubble. From late 1997 through the end of 1999 direct marketing produced roughly 80% of my business gained through various marketing modes. (Not counting referrals.) In today’s post-correction market, those sales would represent roughly $300,000. Even that’s misleading, as back then I rarely sent more than 500-1,500 pieces of mail, probably less than half of what I’ll now be doing. Also, ’till now, I’ve never mailed to expired listings, FSBOs, or single family rentals.

Of course, I know a lot more now about what works and what doesn’t using direct mailing due to over 20 years of trial and error — mostly error. Still, to be clear — I don’t for a second think I’m anywhere near being even a pretend-expert on the approach. The addition of expired listings will account for much business. The minimum ‘targeted’ mailing will probably be somewhere around 3-5,000 — roughly quarterly. There will also be an VERY narrowly targeted ‘mail farm’ of no more than 1,000 properties. They’ll get something every 4-6 weeks.

From all this, and again, based upon personal experience only, I expect a minimum of 215 leads in the next 12 months. Add to that the 80-100 blogging produces, and the production from those sources will be limited to whatever I can salvage from the combined maximum 315 leads. If my ‘house agent’ colleagues are being honest, and they always have been, that’s about what they create in 4-12 weeks or so. Some are literally swimming in as many as 30-40+ leads daily.

Warm Calls

Pretty much any call I make professionally is warm, cuz that’s the kinda guy I am. 🙂 But kidding aside, it’s warm due to it’s timing — about 24-72 hours after they’ve received mail from me. My batting average isn’t what the pros have predicted though. Many say our production from direct mail marketing should increase by up to 40% when followed up with a phone call within 1-3 days. Due to the ‘Don’t call’ list, and the fact that in San Diego you’re lucky if 20% of the numbers are even findable, I can only confidently say that warm calling has in fact increased my conversion rate and probably more than a bit. I’d say it’s accounted for about a 10-20% increase in direct mailing bottom line results. For a 3,000 piece mailing, that might mean listing 1-2 extra properties — hardly a small impact.

Business produced by IDX

No use talkin’ much about the primary agenda behind my local site’s IDX. I’m tryin’ to combine three different aspects of my marketing to turn it into a listing generator. We’ll see. Much smarter folks than I have tried it and failed. I’ll let you know my results, good/bad/ugly or laughable.

The secondary purpose of the IDX site is to bring in buyers. We’re gonna take a somewhat modified approach. Suffice to say, at the very least our semi-worthless company site will now begin doin’ some of the heavy lifting, something it’s not done since it came online in 2006. None of the local sales will be to investors — ever — no exceptions. I won’t be handling those buyers.

Annual Conversion Rates — Direct Mail

Expired Listings: 500 pieces — 12 Exchange listings — 42 Sides

Comment: If I can’t go 12/500 I don’t deserve to show my face in public.

‘Targeted’ Mailings: 20-25K Mail pieces — 12 Exchange listings — 42 Sides

Comment: My response rate, throwing out the high and low, has ranged from .25% to a couple calls over 4%. Most were in the .5-1.25% neighborhood. I’m assuming a .5% average for the year. Based on 20K pieces, that’s 100 people who called me. Again, if 100 investors care enough to respond with a phone call, and I can’t list 12 properties…

Absentee owner: 1,500 Mail pieces — 6 Exchange listings — 21 Sides

Comment: These letters will all be WAY customized to each particular owner’s circumstances. Parameters will include when bought, debt level, probable cash flow, etc. They’ll also include specific & detailed strategies available to the investor/recipient. Often, they will not have known these strategies were on their menus. I suspect the response rate for these will hover around 1-1.5% — possibly more. Those responding will generally be more motivated. Though 6 listings is still what i expect, some may not be for exchange. This would significantly reduce the number of total sides. Time will tell.

FSBO: Mail pieces? No clue. A listing a quarter? Maybe? Bonus biz.

Comment: When I listed/sold homes as a young man, I cut my teeth on FSBOs. Still, I have no freakin’ idea whatsoever if I’ll get any results at all. Then again…

The above is separate from whatever business comes from blogging, seminars (3 different kinds), referrals, some group thingies we’re doin’, and the new IDX venture. When I said I was excited about being able to add my hometown market to the mix, now you can see why. Besides, I can now rightfully take my place at the local real estate agent Happy Hour on Fridays.

Any advice, criticism, or pithy observations are not only welcomed, but encouraged.