Latest / Results Driven / Episode 171: The 5 Numbers That Tell You if Your Direct Mail Is Actually Working

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Episode 171: The 5 Numbers That Tell You if Your Direct Mail Is Actually Working · Results Driven

• 0:00
  SPEAKER_00: Guys, if I were to spend 10 grand on mail and you spend 10 grand on mail and we send it to the same list, the same time, the same mailers, but I make four times as much money.
• 0:08
  SPEAKER_00: Here's probably why.
• 0:10
  SPEAKER_00: I'll go to my cost per deal and I'll verify are they made up of assignments, rehabs, retail?
• 0:15
  SPEAKER_00: Like what's going on?
• 0:16
  SPEAKER_00: So I can list it, I can wholesale it, I can flip it, I can hold it, I can get creative.
• 0:22
  SPEAKER_00: You name it, I'm gonna make money off them if they want to sell.
• 0:30
  SPEAKER_00: Are you a driven real estate investor tired of inconsistent deal flow and ready to scale your business?
• 0:36
  SPEAKER_00: I'm Tiffany High and I'm Draco.
• 0:39
  SPEAKER_00: And this is the Results Driven Podcast, where we share proven strategies to build systems, master sales, grow your team, and create a self-sustaining business with predictable income.
• 0:50
  SPEAKER_00: Whether you're a one-person operation or building a team, our mission is to give you the tools, support, and mindset shifts you need to succeed.
• 0:59
  SPEAKER_00: Let's dive in.
• 1:03
  SPEAKER_00: Direct mail shouldn't be guesswork.
• 1:06
  SPEAKER_00: It's all math.
• 1:07
  SPEAKER_00: Every campaign is telling you exactly what's working and exactly what's broken.
• 1:12
  SPEAKER_00: If you know which numbers to look at, that is.
• 1:14
  SPEAKER_00: In this video, I'm gonna break down the five direct mail KPIs that we track and how each one tells us what to fix before we spend another dollar.
• 1:22
  SPEAKER_00: Now we do track more metrics than that, but I want to at least get you down to the top five you should start with.
• 1:27
  SPEAKER_00: So let's dive in.
• 1:28
  SPEAKER_00: Before I get into the actual numbers, there is one thing that has to be true first, or none of it works.
• 1:34
  SPEAKER_00: Okay.
• 1:34
  SPEAKER_00: Every single mail piece and mail drop that's around, right?
• 1:40
  SPEAKER_00: Every mailpiece needs its own dedicated phone number to it.
• 1:44
  SPEAKER_00: If you are using the same phone number on every mailpiece that you send out, you will never actually know which piece performed, which list performed, which campaign actually produced a given call.
• 1:54
  SPEAKER_00: Okay.
• 1:55
  SPEAKER_00: Every call just lands in the same bucket, and then you keep guessing what's actually performing and what's not.
• 2:00
  SPEAKER_00: So you cannot manage what you cannot attribute.
• 2:04
  SPEAKER_00: A unique number per campaign, actually per mailer, is what turns direct mail from a guess into something that you can actually measure.
• 2:12
  SPEAKER_00: So what is a campaign?
• 2:14
  SPEAKER_00: Let's start there.
• 2:15
  SPEAKER_00: A campaign is, for example, let's just put it up at the top and say, I'm gonna mail the foreclosure list for six rounds.
• 2:24
  SPEAKER_00: And I'm gonna do once a month for six months.
• 2:26
  SPEAKER_00: Okay.
• 2:26
  SPEAKER_00: So the campaign is I'm gonna mail the foreclosure list for six rounds and then it branches off round one, two, three, four, five, six.
• 2:35
  SPEAKER_00: Okay.
• 2:35
  SPEAKER_00: Each one of those rounds needs its own phone number so that we can track the performance not only by that round, but also by that mailpiece, right?
• 2:47
  SPEAKER_00: Because let's just say each round is a different mailpiece.
• 2:50
  SPEAKER_00: I won't know which mailpiece was working and not working if they all have the same phone number.
• 2:54
  SPEAKER_00: And then also we track based on the round.
• 2:57
  SPEAKER_00: So what does that mean?
• 2:59
  SPEAKER_00: Let's just say we run the foreclosure list for six rounds three times in a row.
• 3:04
  SPEAKER_00: The stats will then tell us if we're tracking it by round with a different phone number and say, man, the response rate drastically falls off after round three or four or five or six.
• 3:14
  SPEAKER_00: And it might tell us, hey, to optimize our spend, we can back it down to three or four rounds.
• 3:20
  SPEAKER_00: Or maybe it's saying we still have a high response rate all six rounds, and maybe we want to test adding a couple more rounds.
• 3:27
  SPEAKER_00: But we won't know that if we don't have a dedicated phone number per mail piece to be able to track inside of our direct mail tracker.
• 3:34
  SPEAKER_00: All right, the first KPI that I want you to track is called the response rate.
• 3:38
  SPEAKER_00: That means when I send out 100 mailers and let's just say I get 10 calls, then that's a 10% response rate.
• 3:44
  SPEAKER_00: So it's the total calls received divided by the pieces that we mail.
• 3:49
  SPEAKER_00: And this is the first signal on whether a list or a mail piece is working at all.
• 3:54
  SPEAKER_00: So, for example, let's say that I happen to send this same list, these two totally different mail pieces, like one's pink and a postcard and whatever, and one's like a handwritten letter.
• 4:06
  SPEAKER_00: And maybe one piece gets like three times the response rate as the other.
• 4:10
  SPEAKER_00: That tells me that one mailpiece outperformed the other mailpiece, and maybe you want to drop that mailpiece and test a different one.
• 4:17
  SPEAKER_00: But let's just say that both mail pieces had a really low response rate.
• 4:22
  SPEAKER_00: That then tells me that I need to now go say, is this data worth mailing?
• 4:27
  SPEAKER_00: Okay.
• 4:28
  SPEAKER_00: So if it's off, it's usually one of those two things, the mailpiece itself or the data.
• 4:34
  SPEAKER_00: Mail at least three different mailpiece designs to the same distress data set to isolate which one it is, because we can't really make decisions if we're not mailing at least three times, at least to start.
• 4:44
  SPEAKER_00: Okay.
• 4:45
  SPEAKER_00: It's also completely normal to see a higher response rate on round one or two, because you'll have more people calling in saying, remove me off the list.
• 4:55
  SPEAKER_00: And as time goes, those people now are already removed.
• 4:58
  SPEAKER_00: And so you'll naturally see a little bit of drop-off the more rounds that you send.
• 5:02
  SPEAKER_00: But if there's like a massive drop-off from one mailer to the next, you might test to see if it's the mailer first and then send another mailer and you might see it come right back up.
• 5:11
  SPEAKER_00: That's when you know that mailpiece per se needs to be wiped out, and then we test a different mailpiece.
• 5:17
  SPEAKER_00: All right, the second KPI is what I call quality lead rate.
• 5:20
  SPEAKER_00: Now, when you send direct mail, there are gonna be people that call you and say, remove me from the list, and they're gonna be people that say, Yeah, I would love to hear an offer.
• 5:27
  SPEAKER_00: Okay.
• 5:28
  SPEAKER_00: A high response rate, but with low quality leads, which means that I'm getting a ton of calls, but they're all saying, F, you remove me from the list, might mean that we're not targeting the right distress list, or we sent a mail piece that pissed them off, right?
• 5:42
  SPEAKER_00: So I'll give you an example.
• 5:44
  SPEAKER_00: I have a postcard that says urgent and it's yellow.
• 5:49
  SPEAKER_00: Some people get it confused with like being like a code violation or something.
• 5:52
  SPEAKER_00: So they call just bitching that it seemed misconceiving, even though if they read it, it clearly says it's not.
• 5:57
  SPEAKER_00: So you have to pay attention to those moving pieces, okay?
• 6:00
  SPEAKER_00: Now, if you're like blasting a massive just absentee owner list, guys, you're not gonna get quality leads, right?
• 6:07
  SPEAKER_00: We have to focus on quality data.
• 6:10
  SPEAKER_00: So courthouse data, AI list, et cetera.
• 6:14
  SPEAKER_00: I'll make another video for that, but ultimately do not be like mass blasting absentee owner, high equity, long-term owner, or any of that crap.
• 6:21
  SPEAKER_00: Okay.
• 6:21
  SPEAKER_00: Now let's dive into KPI number three.
• 6:24
  SPEAKER_00: This is what I like to call pieces per deal.
• 6:26
  SPEAKER_00: And then after that will be cost per deal, which kind of coincide together.
• 6:30
  SPEAKER_00: So that is the total number of mail pieces divided by the number of deals that closed from that campaign.
• 6:36
  SPEAKER_00: And this tells you the real volume it takes to produce one deal from a given list or campaign, et cetera.
• 6:43
  SPEAKER_00: So if that number is climbing, let's just say hypothetically, this campaign over here was doing one deal for every 2,000 mail pieces, but this one over here is doing one deal for every 5,000 pieces.
• 6:55
  SPEAKER_00: What will that likely tell you, which then leads to KPI, the next KPI, which is cost per deal?
• 7:00
  SPEAKER_00: That likely is telling you that it could tell you a few different things, but the first thing I would think about is am I hitting too broad of a list?
• 7:09
  SPEAKER_00: So it could mean I'm hitting too broad of a list, like I'm pulling absentee owner and hitting on what you shouldn't be doing.
• 7:15
  SPEAKER_00: So it's not niche enough or distressed enough.
• 7:17
  SPEAKER_00: It could be something in the sales process is fallen off.
• 7:21
  SPEAKER_00: So if you're a one-man show, I would go audit your calls and figure out, did I fall off the process and follow an audit framework?
• 7:28
  SPEAKER_00: If you have a team, I would go pay attention to their scorecard and their metrics every day and figure out is there a KPI that's fallen off?
• 7:34
  SPEAKER_00: Because maybe there's something happening in the acquisitions that fell off the process, and that's causing it to go from one of 2,000 to one of 5,000.
• 7:43
  SPEAKER_00: So you should create a checklist of if this is off or this goes above what I would like it to, go check these things as your SOP.
• 7:51
  SPEAKER_00: Check the data.
• 7:52
  SPEAKER_00: Am I going too broad?
• 7:53
  SPEAKER_00: Check, am I getting too many return nails?
• 7:56
  SPEAKER_00: Like maybe I'm not mailing the right houses.
• 7:59
  SPEAKER_00: Check the acquisitions process.
• 8:01
  SPEAKER_00: One thing I want you to notice here is the data is telling me how to close the gap.
• 8:06
  SPEAKER_00: If you're not tracking the data and you're spending money on mail, do you see that if you're not checking all these things, how much money you're probably blowing?
• 8:14
  SPEAKER_00: Now, KPI number five is profit per deal.
• 8:18
  SPEAKER_00: Now, this one's important because a lot of people will drop some mail and then maybe they only primarily focus on one exit strategy.
• 8:25
  SPEAKER_00: So maybe you're only a wholesaler, you're only a flipper, or you're a hold investor or an agent.
• 8:31
  SPEAKER_00: Guys, if I were to spend 10 grand on mail and you spend 10 grand on mail and we send it to the same list, the same time, the same mailers, but I make four times as much money, here's probably why.
• 8:41
  SPEAKER_00: I'll go to my cost per deal and I'll verify are they made up of assignments, rehabs, retail, like what's going on.
• 8:47
  SPEAKER_00: So I can list it, I can wholesale it, I can flip it, I can hold it, I can get creative, you name it, I'm gonna make money off them if they want to sell.
• 8:57
  SPEAKER_00: Now, if you're either just a wholesaler or just a rehabber, then you're boxing yourself in to the ability to make money on anyone that calls you and wants to sell.
• 9:06
  SPEAKER_00: So the next step then is if my profit per deal is low comparatively to what I'm sending, but yet they want to sell, I would challenge do you actually operate all of those tools in your tool belt from when it comes to exit strategies?
• 9:20
  SPEAKER_00: And if not, we now know where the gap is.
• 9:23
  SPEAKER_00: We've got to get educated, right?
• 9:24
  SPEAKER_00: Educated first.
• 9:25
  SPEAKER_00: We gotta learn, do, become.
• 9:26
  SPEAKER_00: First, we gotta learn.
• 9:27
  SPEAKER_00: So if you're only a wholesaler, it's time to learn flipping.
• 9:29
  SPEAKER_00: I would not do direct mail if you don't flip houses.
• 9:32
  SPEAKER_00: The profit per deal probably won't make sense unless you're in a big city where your margins are pretty thick when it comes to wholesaling.
• 9:38
  SPEAKER_00: Also, we need to then execute it, right?
• 9:41
  SPEAKER_00: First we gotta learn how to do it, then we gotta do it.
• 9:43
  SPEAKER_00: A lot of people forget to become, learn, do become because they gotta become the person that deserves the result.
• 9:48
  SPEAKER_00: So ultimately, guys, that's the five core metrics.
• 9:51
  SPEAKER_00: Now, there's a lot more we track than that in our direct mail tracker.
• 9:55
  SPEAKER_00: But if you can at least get these five started, it'll start helping you inch in to doing direct mail and feel confident in investing and at least now have an SOP for each one of those that it, if it's off, then look at this.
• 10:07
  SPEAKER_00: And if you want a link to our exact direct mail mastery system, we build a course for free.
• 10:13
  SPEAKER_00: It's inside of our school community.
• 10:14
  SPEAKER_00: So you'll get the tracker we use inside of there, the training videos we walk through every KPI, and the exact process that we follow to know whether a campaign is working or needs to be adjusted.
• 10:25
  SPEAKER_00: The link to the community is in the description and pin in the comments.
• 10:29
  SPEAKER_00: I'll see you inside.
• 10:31
  SPEAKER_00: This episode has come to an end, but your journey continues.
• 10:35
  SPEAKER_00: Subscribe to the podcast so you never miss an episode.
• 10:39
  SPEAKER_00: If you want direct help from us, join our free community by visiting the results driven podcast.com.
• 10:45
  SPEAKER_00: That's the results driven podcast.com.
• 10:48
  SPEAKER_00: We'll see you next time on the results driven podcast.
• 10:51
  SPEAKER_00: We'll see you next time on the results driven podcast.