Real Estate

Top 6 reasons direct mail is still a main tool for top producers

Depending on where you live, your mailbox might be full of postcards from other real estate agents. To some, this is baffling. “Didn’t postcards go out in 1999?” To others, they smile when they see these postcards knowing the large return on investment that postcards provide for certain industries, including dentistry, roofing, and real estate. But why do postcards continue to provide this sort of return in the digital age when there are so many different advertising options?

Why does almost every single top producing agent in the industry mail postcards? We’ll explore the top 6 reasons why.

1. Postcards build brand awareness

This is more a lesson in psychology than anything, but when people see the same logo, headshot, and colors over and over they build a warm feeling with the brand. Real estate postcards in someone’s mailbox doesn’t give them much of a choice when it comes to seeing your brand. It is important that you take this into account when designing mail pieces and that you keep the look of your postcards incredibly consistent.

2. Direct mail is highly targetable

It’s not difficult to purchase a mailing list, or obtain one through a title company or other resource, and continue to mail the same households over and over. You can even get lists of absentee owners, owners with equity, and other filters.

3. It makes the real estate agent look “professional”

In most states the barrier to entry of getting a real estate license is pretty low. For this reason, there’s a lot of competition for REALTORS® to obtain real estate listings and buyers. In most markets the competition is often with family members who are often part-time. Direct mail separates the professional real estate agents from the “cousin Jim” with his real estate license. It also helps the professional real estate agent stand out to their sphere of influence so that friends and family don’t worry that you’re just a part-time agent.

4. It’s easy and can be automated

You used to have 2 options when it came to sending postcards to obtain listings: do it the expensive way or do it the hard way. Thanks to recent advancements in technology, companies like Wise Pelican have made sending just listed postcards easy and affordable. Campaigns can be created and sent in minutes and without having to have a large quantity commitment. Wise Pelican in particular allows users to mail just one postcard at a time if they’d like. The days of DIY direct mail are over.

5. Good return on investment

At the end of the day, marketing is all about return on investment. You’ll have a hard time finding a real estate agent that has used direct mail consistently, mailing repeatedly to the same list, that didn’t get at least double their money back.

With that being said, you can find thousands of agents that will tell you that mailing one off pieces won’t do you a lot of good.

Direct mail companies such as Wise Pelican preach relentlessly on the importance of consistency when it comes to direct mail. Geoff Lilienfeld, founder of Wise Pelican, one of the larger companies in the real estate direct mail space, told Inman, “At the end of the day consistency is what ultimately matters. Design and messaging are important but if you aren’t consistent in your mailing you likely won’t see great results. We encourage all of our customers to only mail lists that they can afford to continue to mail at least once per month. In the short term it sounds like we’re shooting ourselves in the foot asking our customers to spend less, but in the long-term it works out for our customers and for us because they end up ramping their campaigns up over time as they start to profit from them.”

To determine the return on investment from your direct mail campaigns take the gross commission income you receive from your campaign and divide it by the cost. For instance, if you mail 1,000 postcards each month at 75¢ each you would spend $750 on postcards each month or $9,000 for the year. According to recent data from Zillow, the median home price in the country is $303,000. If you were to obtain two listings at $303,000 each, both with a 3% listing agent commission, your GCI would be $18,180 from your direct mail campaign. $18,180 GCI / $9,000 spend gives you a 202% return on investment. That would be if only 2 out of the 12,000 postcards you mailed turned into a listing. That’s just .017%. If just 4 of the postcards turned into a listing your GCI would be 404%. It’s likely that you’re also in a market where the average home price is much higher than $303,000.

Wise Pelican offers a postcard ROI calculator.

6. It builds on itself

The longer you’ve been farming an area with postcards, the more brand recognition you’ll have in that area, and the higher the return on investment you’ll receive. It isn’t uncommon for real estate agents to end up with 10% of the market share or more in an area that they’ve been farming for multiple years.

In summary, if you want a predictable source of listings, direct mail absolutely still works and can free you from prospecting activities — but it’s important to follow the guidance of marketing professionals and make sure to stick to it.

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