Transcription:
Frank: There are lots of benefits to direct mail. If you’re watching this that means you understand that. Let’s get into it. Just at the top of your head, what are some of the key things that make direct mail work? The general principles and then let’s drill down on how an agent should pick a farm and farm it. So, what makes direct mail work? Why do people continue to spend more and more money on direct mail in an era that everything feels like it’s digital?
Ryan: Well, it’s interesting because one, direct mail is tangible. I think people still like to be able to touch and feel that product that comes in their mailbox. We felt the pain back in 2012-13 when everybody was shifting to digital. Everything was going social. I can’t tell you how many businesses we’ve talked to at that time that said, ‘Hey, we’re going to switch our money into digital’. Then six months to two years later, they all came back. What happened at that time was mailboxes started to thin out. A lot of people are getting their bills thru online bill pay. There’s not as much mail so as the marketing mail thinned out, our product started working better. We were more exclusive in the mailbox and now more people are catching on in the last five years that direct mail is getting strong. We’re starting to see a surge and that’s just something tangible about getting that product. The shelf life on it is long. You put a postcard in now and a lot of it is going to be thrown away, but for those that are interested or want to hang on to it, there’s something special about keeping it there. It’s on your kitchen counter or on your table. Direct mail is just something that hangs around. Digital, it’s here that moment and it’s gone. Direct mail is not about the necessary expense, but the return on investment and over the years. We’ve just seen significant ROI. The biggest challenge right now is how people take it. It’s still relevant. It’s just how the people respond to it. 10 years ago, we used to do just call tracking numbers. Today, not as many people pick up the phone right thru the direct mail and call that number. What they do today is, do a small tad of research on their smartphones and then call whatever number they find online. We’ve done some things to connect those dots online with the magazine to give us some attribution to the actual product itself. We still do call tracking but, we still have some really special things that I’ll talk about today. To answer your question, direct mail is convenient. The baby boomers still love it. The Millenials are probably shifting a little bit more to digital. But even they think it’s something unique and special. I really don’t know what it is, but we see the results and they’ve been strong.
Frank: The real estate professionals have a really limited budget. Where are they’re going to put their resources for lead generation… Scott, you’re in the meeting here. Say, ‘Hi’ Scott.
Scott: ‘Hello’.
Frank: Scott is in San Diego which is a highly competitive real estate market. You decide to allocate resources to direct mail. Is that right Scott?
Scott: Yeah. I actually didn’t believe in it at first. I had a father-in-law in the business and 30 years ago, I asked what works and he said, ‘Notepads and postcards’. I said. ‘You’re crazy’. I did them and it worked. To Ryan’s point, I think he tried to separate things with the Baby Boomers versus Millennials. I think the shift is much more on the buyers and sellers. Buyers are looking for information online about houses in neighborhoods and they find the agent online. Most sellers want the agent who works in the neighborhood. They want to see signs and be familiar with them. Not just online. I think that’s the reason why direct mail works so well for listing agents.
Frank: Let’s talk about picking a target market which is, I think, the first thing you have to pick before you craft the messaging and create the mail. Scott, you picked a very competitive target market here in San Diego. Can you tell us the details of why you picked the area that you did for the direct mail campaign?
Scott: I started when the neighborhood was new. It was still under construction. It only had, roughly, 2000 homes and at maturation was 4000 homes. The idea is, if 10% of your homes are going to change every year, I feel that we, as listing agents, have an opportunity at about 40% of those. You have to get enough homes in that market to keep you busy and to give you an ROI. You can’t take a hundred homes and do a direct mail campaign for it because it costs too much to do the mailing. There’s not enough turnover and it can be a hit and miss and have great results one year and terrible the next. The other thing is to look at homes that have a lot of turnovers. Condo complexes are good because those are temporary homes. Going into the 55+ senior community is a waste of time because in reality, when they leave, it’s probably the heirs of their estate that’s going to market the house anyway. I love families to give me like a master plan community where a lot of families and houses from condos up to estates. You’ve got people who are going to move a lot within that community and each sale could turn around to be multiple. Direct mail is awesome for that.
Frank: What are your thoughts on the size of a market for an agent to start with Ryan?
Ryan: I’ve talked to agents and it really depends on what their goals are. Some use postcards just to “talk” to a small radius around a home that they sold and that’s great. For our programs, we try to do a minimum of 1500. To Scott’s point, I think that there is more effort that goes into a solid direct mail piece. We do all of that. We do the heavy lifting and take that away from the agent. We really want to hit and saturate a market. As Scott said, we have the ability to target very carefully. If someone wants to target only homeowners or just saturate the area, we can really focus demographically and geographically. The key to direct mail is really frequency. Sending a postcard or a mail piece and to only do it one time is really a bad Idea. We’ve turned away a lot of businesses who tried to do that because it just doesn’t make sense. You need consistency. No one buys from just one TV commercial or radio spot because it will not work. You’ve got to create a brand, just like in direct mail. It’s probably one of the best avenues for branding. I distinguish things between direct response and branding. Every agent wants a direct response. The holy grail. We all want the listing. But I do think that you have to take some time and patience. You need that neighborhood, whether it’s 1500 or 3000 homes to consistently see that you’re serious. You’re out there to help them. You’re a marketer and you will market their home to get top dollar and sell that house, being that you’re in their face in the direct mail pretty much all the time. I’ve talked to some agents that they want to hit as often as weekly. It’s expensive, but a great long term strategy.
Frank: 1500 to 3000 units looks like a small niche Ryan. If you want to saturate a very specific area with a very specific message, what frequency would you recommend?
Ryan: At least monthly. I know some agents that have been successful going 24 times a year. Approximately twice a month, but our model is monthly. We have programs that are more frequent but it gets expensive. One thing that we can’t control is postage. EDDM or Every Door Direct Mail is a great strategy as the postage is extremely low but, it has some disadvantages. You don’t actually print the whole address on the piece itself. What we’ve done is a bit of a hybrid model. We provide the EDDM postage with full saturation. As long as we have a percentage of the carrier route, we’re able to pass along the same postage. We can cut out businesses, portions of some apartments and focus more on neighborhoods and carrier routes that are more of a geographic and demographic that an agent is looking for. We have to sit down and understand the farm that the agent is looking to hit and we can go the EDDM or saturation route. Again, it can get a little bit expensive but we try to get the best value for our agents.
Frank: What is the ‘turnover rate” and how do you find that Scott?
Scott: You just get a title representative to help you out and basically pull up a farm and give it to them by zip code or street names. From there, you ask how many homes are here and how many got sold last year. Basically, what you’re looking at is, if it was 2500 and 250 homes were sold, that means 10% of the homes are selling a year which is high. But you get a lot of communities where people stay in place and you don’t really want to be doing geographic farming in a highly stable neighborhood because they’re not going to move as often. You’re not getting the ROI there. What you want is the less stable/ move up neighborhoods where people are going to move in and out.
Frank: What do you actually mail out say once a month to get someone to respond?
Ryan: Our flagship product is a digest-sized magazine. We’ve done pretty much everything from postcards, EDDM, magazines, and inserts in the magazine. We were able to leverage our other products with the scale and drive down our costs so that we can provide a custom 32-page magazine.
Frank: Why the digest? Vyral marketing sends mail. I receive postcards or flyers in the mail from other companies as well, so, why the digest?
Ryan: It’s working for those businesses or they won’t be mailing those. So direct mail works. We just took it a step further. We studied this a little over a decade ago and did a lot of focus groups. We brought in all those pieces to them. From there, nine out of ten focused on the digest after being asked what they liked the most. The reasons range from how you stack your magazines on the coffee table or how you place things in your junk drawer. Manufacturing wise, it’s a very efficient size. A lot of mail has those tabs that hold a multi-page product together and you’ll have to rip it to open them. Ours just falls open when you receive it in the mail.
Frank: What’s the call to action that gets someone to respond to the agent?
Ryan: Scott may have better answers on that but we’ve toyed around and it seems that the response is different for every market. But whether it’s an offer or a really hot listing, we’re always pushing people to call the agent. We’re just taking the agent’s call to action and we’re putting it on print. Maybe Scott has something specific that worked for him and his farm.
Scott: I really like the fact that on one of those 10 pages that you create your own content on the magazine, you have one page where you do the “Golden Key” search. You’re pitching in a $1000 for people to find a key in the magazine and then you’re collecting email addresses and forwarding those back to the agent if anybody is showing a lot of interest. They would also be getting the online version in the email moving forward. It’s a great way of getting someone into a drip system or whatever online marketing you’re doing. You really have the opportunity to extend your brand.
Ryan: I’ll touch very quickly on what Scott was saying. The “Golden Key” contest, we fund it on the agent’s behalf. But to the recipient, that is coming from Scott Voak. I mean, people don’t know who we are. To them, we’re just the people behind the curtains. We have little “hooks” like that. Our team works with the agent to try to come up with something creative.
Frank: What’s the cost of a farm of 2500?
Ryan: Over the last month or so, we’ve been testing things and been making some changes. If you’re going to do a magazine every month, the cost is a little more than a dollar plus postage. If we blend in the postcard, we can lower it down to at least 70¢ or so. It’s really hard to say exactly what the cost is. But you can talk to our team and we can work out something very creative that could keep your costs low. However, this is just for expert agents. This isn’t your typical ‘Let me just buy a couple of hundred postcards and randomly send it out’. This is a true marketing campaign that takes some serious commitment and discipline. If you’re serious about your business, then we’re definitely a good team to work with. We’ll walk through all the prices and what not. I also want to touch on the digital element of it. We still believe in it and we’ve been testing all our digital side for the last year or so. We’ve got a program called TNC Wired which sends out a ton of branded Google Ads to all our agent’s farms. This is connected to the magazine and we make it look very similar. We do the same thing on Facebook and Instagram. We tie it all together. We also add a pixel on the agent’s website. We provide a dashboard to the agent so they can see all their stats. By doing this, agents get to establish a solid brand which presents them as a true expert in that farm. We’re also about to go live on something that we’ve been beta testing for the last couple of months and it’s called LeadMatch. This way, we can connect the mailing list along with the people that have gone to the agent’s website and provide a contact notification for those folks.
Frank: That’s really powerful.
Ryan: No one else is doing it. It’s proprietary to us. It’s cool and exciting. It’s starting to turn people on. It’s probably the most exciting thing to happen to us in the last six months and all our agents are about to get a taste of it.
Scott: Frank, I’d just want to get something in there that I want to make sure that everybody got. Ryan was talking about a dollar plus postage but remember, his postage is cheaper. We’re not talking about a dollar plus first class mail. So dial down your numbers a little bit. It’s more affordable than what you may be thinking if that was the case. If you’re looking to step up into a higher priced market and you just don’t have it, nobody else is doing a piece of this quality and it sets you aside. You’re going to have to be creative with your call to action, but the deliverable is going to set you above everybody else.
Ryan: I’m really glad you said that Scott. I forgot about the postage and you’re right. Our average postage is about 18¢. It’s on the lower side and that’s when the folks are doing more of the saturation, but not the EDDM saturation. You’ll have the ability to scrape those lists, which we do as well, and get a little more targeted. If you want to get the absentee owners or be more focused on the demographics then that’s going to be a little bit higher. It’s a marketing standard mail and we keep the cost low. We can bring a product for not much more than a big postcard because of our volume. We have some agents in our “Dominator” program that sends out a postcard and the magazine all in the same month. So 24 units a month and that’s another way we can dominate the market. As long as you give it the time, direct mailing works. Don’t bail out too soon. Your investment will pay for itself if you give it time.
Frank: That’s great. So, we have the frequency, the message, the target market, the cost, the ROI which depends on the price points and the commission rates and is a risk you take as a business owner. Now, let’s talk about the point of all this. I think that’s to meet the homeowners. They call you, you talk to them and build a relationship with that farm of 2500. A good turnover rate would probably be 5% so, that’s about 125 homes that are going to sell. There are multiple layers to maximize that farm of 2500. You have the direct mail, online retargeting where people visit your website and they start seeing you online. Once you meet them, you get their email address and permission to stay in touch. You can’t just spam them all if you don’t know who they are. You need to meet them to get to know them.
Even if you’re going out and door knock, call or hold a community event, this is really a good way to do that. Now, I’d like to share with you some ROI numbers just on a database. This is Gary Keller’s of Keller-Williams which is one of the largest brokers as everyone here knows. A whole lot of research has been done on their database. If you somehow managed to talk to 630 of the homeowners of the 2500 person farm at the time there’s an extra $50k to $200k in commission just by touching your database.
As your database grows, your commission rates start to grow as well. For many agents, you’ll find that most of their business comes from five sources. For the ones that are profitable that aren’t just constantly chasing the online leads, you’ll see it really is database and farming. It’s working a niche farm of homes for listings and once you meet people, not only past clients and sphere. Stay in touch with them and the people you meet in your farm, those are two of the main sources. If I could just somehow talk to three homeowners a day and say, ‘Hey, it was great speaking with you and you know, I publish The Neighborhood Connection. I’d like to send you some of the stuff through email as well in addition to what you’re getting through the mail. Would that be cool? I think that’s really helpful you’ll enjoy it!’. People will say “Yes”. If you do the math on that, even if you started with a database of nothing that’s 15 people a week for you to add to your list or 720 people a year. If you add that new legitimate Mets in your database, ideally homeowners are nitro for your farm! They’re the best people to add to your database. They’re near you and they’ve got homes to sell! You can probably increase your income with that recommended amount. I’ve asked a lot of people and they say that it’s pretty on point. Question is, what do you e-mail them? It’s the online version of the magazine. Right, Ryan?
Ryan: Yup.
Frank: Let me show you an example. This is not The Neighborhood Connection but this could be very easily rebranded as such and this is Frank from Vyral Marketing. I would probably say I’m more of the digital side. At least database video side. To complement what Ryan is doing, is starting the Silicon Valley Neighborhood Connection. Right Ryan?
Ryan: Yup. Absolutely.
Frank: I mean, someone could start a video blog publishing helpful educational videos, answering commonly asked questions just like this. He has his videos on the left, a call to action to find out what your home is worth and to search for homes. It really positions you very well as an expert. This is something put together and you could click any one of these. When you do, the video will start popping up. Isn’t that cool? This is a really good way of staying in touch. You start sending these videos out by email or online, but the big difference is using the Vyral service versus something like Ryan’s that needs permission. You’re direct mailing all these people without their permission which is fine as that how it works. There are commercials on your TV shows without your permission, right? You could do it that way, but through email, you can’t send broadcast email without someone’s permission. It requires you to meet them and get permission to stay in touch. Once you have that, it’s like gold and you send them videos. It really makes more of a full rounded niche. An advertising program that positions you as an expert.
Ryan: I want to add something on that. The digital pages that you’re building with the videos and what not have so many bells and whistles about what we do and I probably couldn’t touch on all of them in just this session today but, we do provide a digital link/interactive magazine along with their magazine which is a really cool piece. We can embed that magazine anywhere and when we update the magazine whether it’s monthly or however frequently it is, it automatically updates as well. It can be on the agent’s website or that video journal/program that you build for them or that landing page, we can put it there and it does add credibility that not a lot of agents have. Not a lot of agents can say that they have their own magazine and that’s the opportunity that we give. Let me go back to LeadMatch real quick. It is complex and if anyone wants to talk call me up, let’s talk. We’ll be putting you up with one of our marketing experts. What I didn’t explain is that, let’s say 50 people go to your website. As a real estate agent, that website or landing page, you typically won’t know who went to your website. Most agents don’t have that type of data because they don’t have that pixel installed. We then know that folks who have been getting that magazine have been connecting the dots. If 10 out of the 50 people got their magazine, we can now give the agent their contact details. Here’s were it gets complex. The 40 people that didn’t get their magazine we can now add them to the mailing list and start touching base with them. They went to Scott’s website for a reason. The magazine isn’t always the end all but it just supports it and compliments it.
Frank: Last question Scott. What would you add for someone who wants to succeed like Ryan?
Scott: I really like the synergy of the magazine and Vyral. Instead of people going to a ‘What’s my home worth?’ page on that key search they’re doing, they can go to a page that’s got my all my videos on it. The cross-marketing there. Ryan’s talking about a lot of things because I’m in his backyard, but a whole lot of it hasn’t been ruled out yet. As it does, it gets really exciting. I have my own radio show and podcasts. When you sit and create a one hour podcast with guests and you see that you’ve got 50 to 100 people watching or listening to it and I’m getting 1200 views each one. That’s big. The nice thing is, with you guys, it’s almost turn key. I have a call every two weeks with your guy and we tape two videos. Ryan’s guy Lee hounds me and I give him a couple of articles and I go to my folks for articles, they get my listings and boom! It’s probably a total of five hours a month’s worth of work and I’m a marketing guy. I was a CEO with a marketing background and I’m finally comfortable letting my marketing go. You guys are doing it better than I could.
Frank: It’s the right thing to do. I even struggle with my own company.
Scott: Yeah. If you want to hold that, that’s your jewels, but once you find somebody who does it better you’re like, ‘Go. Do it. I’ll go sell houses’.
Frank: Good. That’s great. I’m trying to find an example to pull up on the screen. It may not be the best resolution but maybe the audience can see this. There’s a book that was written that I think everyone should read. It’s called,’Millionaire Real Estate Agent’. Again this may not be the best resolution I can pull but basically, you divide your role between the people that you haven’t met and the people that you’ve met. Ryan, you do an amazing job of staying in touch in geographic and demographic farming. Sending out a direct mail at least once a month to get your business. That’s what this owns. This is why these two work so well together Scott. Ryan, you also have the benefit with the newsletter that the agency would send out via emails. Just stay in touch with the Mets and Vyral could take it a little further with some videos like I showed you. Once you meet people not only on your farm but also your past clients and sphere, they go on a ‘touch’ campaign where they get on more frequent communication from you. You probably let them have repeat and referral business. You add in the new business from the farm, the repeat, and referral business from the database. You start selling more homes which is the whole point. Right, Scott?
Scott: That’s what it’s all about.
Frank: What else Ryan? How does someone get in touch with you? What’s the first process? What’s the first step in the process to look into getting a farm in place?
Ryan: The easiest thing to do is go to our website just because you can educate yourself on what the product is. You can do a little bit of research there. We have a pretty robust site where you can understand a little bit better. You can watch videos from some agent, you can see some digital samples of the magazine in there and then schedule a demo. Or you can just schedule a demo immediately and talk to our staff. You will immediately be contacted by a marketing expert that’ll jump on the phone with you. They’ll explain the product, understand your needs because we are all about understanding what our agents have done, what they want out of the campaign, and then we figure out if it’s a match. Sometimes there isn’t a match or it doesn’t make sense. We’re completely honest and open about it. We’ll tell you if it makes sense. If it does then we’ll carry down that path and talk about pricing. We’ll help structure a mailing area and jump on a webinar like this with our clients and walk them through the farm. Show them how many they can hit. We can cut it back or add to it.
Frank: That’s great. Ryan, thanks for your time today. Scott, thanks for joining us and we appreciate the insight from someone who’s doing it.
Scott: Thanks for having me.
Ryan: Thanks, guys!