Critique this marteting plan please!

[jmd_forest]

I began my marketing campaign about 3.5 months ago and am a little dissappointed in the lack of response. I am hoping the experts in this forum could help me become more effective.

I have a three pronged plan described below:

1) Weekly ad in the Penny-Saver/Ad-Lines magazine. Not one of the timy 3 liners but a business card sized ad.Basically it says "We buy houses for cash: Real Cash - Real Fast: Say goodbyew to problems with foreclosure, bad tenents, liens, repairs, ......" with some house/cash graphics

I'm using the weekly Penny Saver/Ad-Lines since the local daily newspaper carries 5 or 6 classifieds daily for "we buy houses".

2) Direct Mail: I research at the county court house each week to get list of Lis Pendens filed that week as well as probates filed with real estate for my target areas. I get around 10 leads every week. I send a hand addressed envelope with letter and 2 page "Forclosure Resolution Tips" and business card to the Lis Pendens. The executor/rix gets a letter expressing sysmpathy and interest in purchasing estate property for cash.

Also letters sent to vacant and/or run down properties as I discover them.

Lis Penden letters are followed up by post cards once/week.

3) Bandit signs at strategic locations (entrance/exits to subdivisions) in my targeted area. I've placed about 30 bandit signs. They stay up around 3 - 4 days before they dissappear. I replace tham as necessary

Results after about 2 months of effort:

A call from 2 different sellers each looking for full market value (generated byAd-Lines)
1 Call from bandit signs looking for full market valus

1 property under contract from direct mail (in August, 3rd letter I ever sent) to vacant property Settlement scheduled for next week. Property being bought at about 70% FMV - $15K repaits All told, sale price is approximately 55% of ARV.

Although I started with direct mail in August, the Penny Saver has been going on for about 6 weeks, the bandit signs have been out for about 3 weeks.

Total marketing investment so far = $2k

Any ideas to become more effective??


JMD

[aznewbie]

Ha, Ha, Ha
Since no one else has replied, I'll say what I think...
I'm new though so take it easy!

Your plan sounds fine.

A couple things you might want to do though.

Try a couple text ads along with your graphic ad in the pennysaver.
Try the daily paper also, at least sundays. Try wording your ad so it appears first. First word with an "A" or something like "1st choice when you need cash", or something like that.

You never know someone might like how nice and understanding or helpful YOU sound compared to those others.

When you do your searching from the court house try to get the list everyday or every other day if possible. If it's available online that would make it a lot easier. Early bird gets the worm!

Some people have said they got deals from people they sent letters/postcards to over a year ago. He/she wrote on the bottom that if they didn't need to sell right now that they should save the letter in case they needed to later. Tell them to put it with their house papers or other important records so It doesn't get lost or something.

Try placing your bandit ads out of reach if you can. Its easy for someone to go by and pull it from the ground but they might think twice if they have to use a ladder.

If you have gotten one deal, thats great!

I have HEARD that to get a rough idea of the response you'll get is to use a 10% rule.

For example, you mail out 1000 "TARGETED" mailings,
10% might respond,
out of those, 10 % might be motivated,
and finally out of those you might get 10% to accept your offer.

Don't quote me but that is what I have HEARD.

The main thing I see the experienced ones say is persistance is the key.
If something is not bringing in the results you want, try something else.
But keep at it.

One other thing, if it cost you 2k to get one deal but you make 10k from it, is that good for you? I sure wouldn't complain!

Hope this helps, good luck!

[jmd_forest]

Angelina,

Thanks for te reply. You have a couple of good points.

1) I'll add a "Save this notice with your other important papers if you think you might be able to use our services in the future"

2) I'll think about adding a text ad to the graphics ad in the Ad-Lines. I'm trying to stand out from the crowd by using the larger garahics ad. As I mentioned there are several ads in the daily paper and I figured I'd just get lost in the shuffle. Also, the daily paper covers sooooo much more than my target areas and 3 lines run about $25/day but the Ad=-Lines covers by target area almost perfect at $77/week. Even so, maybe I've got to put an ad in the daily.

3) The bandit signs have been terminated. Just yesterday I got calls from 2 code enforcement officers threatening fines. The worst was $1200/sign for each day the sign is up. Way too much even if they brought in a deal a week. There's $450 bucks down the drain.

4) If the data was online I'd search the courthouse records every day. As I mentioned, currently I spend 1 day/week doing court house research. Even so, only the recording event is available and the actrual notices are not even scanned in for up to 3 weeks. This means to make sense of them you must do some reasonable research to get the actual properties and determine of there isi any equity in it. As I mentioned I get about 8 to 10 "qualified" leads each week "Qiualified" by me to be in my target area and have enough equity to make it worth while.

5) I'm thinking about periodic (quarterly???) mass mailings to my most desired target neighborhoods since I can no longer target them with the bandit signs.

The one deal I've gotten so far should return about $60K in equity after repairs. Since I plan to hold and rent I look at the equity as $90K pre-tax dollars. Of course, this is a little of counting the chickens before they hatch. I've got the property under contract but we don't settle until next week and then the repairs must be performed.

Thanks again for replying.

JMD

[kjb1891]

Most people agree that targeted direct mail marketing is the best. I suggest using postcards instead of letters. Often times when someone in a dire financial situation gets a letter with a business name on it that they don't recognize they think it is "more bad news" for them. So, they usually throw it away and try not to think about it. With postcards they see your message right on the card without having to open it. Develop a good design and message. Also, when you have a mailing list, mail your postcard to them 3 or 4 times for repitition. Do those things and I think you'll get a better response rate. Hope this helps you out!

[namaral]

Stay away from letters!!!, the guy above is right. Anyone going through a tough time is not going to read some more bad news. Get some bright collored post cards. Say what you need there. This is a lure that can't be beat. BRIGHT colors. it works, trust me, your plan is great, just stop the letters and change to post cards, they save time and money.

good luck.

[Joe Smith]

Here are some ideas we found that work...........
Join the Chamber of Commerce, pass out cards at the meetings.
Join your local REI club, pass out cards.
Put a magnetic sign on your car, then park it at the local Mall, K-mart, etc. on weekends.  (We got one of our best deals this way)
Band-it signs are not anywhere as good as they are made out to be, but do generate a modest amount of leads.  But you HAVE to use a 1-800 scripted answering service and a Band-it web site.
Call other Real Estate Investors and NETWORK.
Word of Mouth can't be beat for advertising.   So Integrety is vital, one person thinks they have been cheated and you lose a ton of credibility.  Take a smaller profit if it keeps your customers happy.
Hope you find this usefull.

Eric @
NYE Enterprises, LLC

[pj]

Does anyone have an example of a 1-800 scriped answering service and a bandit web site

[henrytx2002]

As a beginner myself, take my advice for what it's worth.  I have increased my response from 1% of the list to 5% over  3 months of tweaking.  I dropped my list from 1100 people to 400 or so. I get a better response now than before.  My state is different in that we don't get the NOD is not public knowledge, only the Notice of the Trustee Sale, so we have 21 days to market.

Send more than 1 type of letter and send often.  Also, keep in mind they may be bombarded as soon as they hit the list, so hit them up again later on. consistency.  it's not a matter of postcards or letter.  It's both.  Just make sure you are sending it to list that's narrowed down.  You get better results mailing to your good leads often than the whole list once or twice.  I have done a handwritten letter and a typed letter that's metered.  The metered letter got a 5% response.  It can surprise you what different people respond to.  I send a typed letter in a double window white #10 envelope and put a "In regards to <bank>" or "RE: <bank>" at the top of the owner's mailing address. You might want to even bold the bank in your form letter, but leave it in all caps.   It reads like this:

In regards to CTW LENDING
John Doe
123 abc st
anytown, anystate 1234567

Or

RE: CTW LENDING
John doe
123 abc st
anytown, anystate 1234567

It tells them right off the bat, that this letter is in regards to their mortgage problem. You could even enhance it by stamping on the outside "Personal and Confidential" with a self-inking red stamper from Home depot.  Though I haven't done that myself, because I do it all online.

For the return address, you want it as generic as possible.  Ever wonder why those direct mailers use non-descript generic envelopes that just have a  street address?  That's because it outpulls many of the flashier color graphic envelopes.  People don't know what the letter is about, so they open it.  For the return address, I put:

ADMINISTRATIVE OFFICE
123 abc st
anytown, anystate 1234567

I also changed the paper I use from white to canary yellow.  They have lots of  white paper on their desk,  they can't find yours unless it's a different color.  Direct mail statistics show that goldenrod or grey outpulls white.  I only use canary yellow because that's what's available on the usps.com website.

I changed the paper and the way I addressed it and I got more calls for 400 letters than I did for 1100 letters in different months. Now I am thinking of further limiting the letters to 200. The letter I use does have incredible copy though.  I provide lots of free info on it also.  Lots of compliments from the people in foreclosure. I send it twice, once when the person first hits the list(21 days until auction) and again a week later(14 days left).  They usually panic and call me in the last 2 weeks, 90% of the time.  I don't even stick a business card in them, though I should.


As for handwritten letters, I have done poorly with it.  I have heard of other people with massive success, so I know it's just a matter of tweaking it and getting it right.  I think I messed up the first time by sending them "invitation" size envelopes.  They are small and get easily lost in the mass of mail they have.  I will change to a standard #10 white envelope and see how that goes.

If you send postcards, send a big postcard so it doesn't get accidently missed. Use whatever copy you want, but add this to it.  You can put FREE $25 GAS in the front in big bold letters with a picture of money and a gas pump.  Free $25 GAS goes a longer way than FREE $25 Gift Card.  How many times have you broke in your life  and filling up your car only halfway?  Now imagine what they are going through, because they can't pay utilities and the mortgage and put gas in their car. Each time that gas price goes up, they feel pain.  Your postcard mentioned at the end that a $25 gas card is available to them, if you are able to determine if their house is worth your time to visit to purchase.  You prequalify over the phone for motivation and good numbers .  I haven't tried this postcard yet.  I am looking to get it designed though.  Giveaways are a common promotional tactic in marketing.  

[Bettysue]

henrytx2002

 Your postcard mentioned at the end that a $25 gas card is available to them, if you are able to determine if their house is worth your time to visit to purchase.  You prequalify over the phone for motivation and good numbers .

How would you state "If you determine their house is worth your time?  

I think this is a good tactic.  Just wondering about the wording.

[henrytx2002]

Rising gas prices are crazy these days and I want to help you with your needs.  When you want to sell your house, and we both agree to meet with each other at your house,  I'll give you a FREE $25 gift card  to your choice of Shell or Exxon.  The gift is yours to keep, whether I buy the house or not.   You deserve to fill up your gas tank without the worry and stress of high gas prices.

My grammar is awful.   I need to tweak it a little bit more.

Rising gas prices=Rising anxiety levels.  Gas prices jump every summer.  So this should work even better, when the prices spike up again.

[Bettysue]

henrytx2002

I liked it.  It's direct.

[henrytx2002]

henrytx2002

I liked it.  It's direct.

Of course, when you go out to meet them, you want your contract ready and  all the decision makers there.  No use going there with the gift card if the husband  or wife is not home to sign the papers also.  I hope this campaign is smashing success for you.  

[Redtigress]

One thing I've noticed when talking to potential leads... graphic ads sometimes make them feel (also read "wonder if") they are being ripped off.

They assume big ads are either done by big companies or big rip-off artists.  In an industry where there are so many honest people you have to be dishonest to get lots of publicity.  So the dishonest ones are who everyone remembers.  Often owners of "distressed property" are scared to begin with.. usually of being homeless.  I've met people who are less concerned with who babysits their children then who they deal with on a house sale... ESPECIALLY if they are inexperienced.

Anyway, that's just my 2c's worth.  Other than that the plan sounded good.

[henrytx2002]

Never thought of that.  That's an interesting point.  I will have to do a  trial run with a one color plain postcard with only minor graphics and do a full color professionally designed one to see which one pulls better.  Thank you for sharing this view with me.