When you are dealing with often the largest asset a homeowner owns, he may require multiple “touches” by advertising before he is ready to sell his home to you. The other aspect that most people overlook about advertising is that any one method can be very impactful to one homeowner, it can be meaningless to many others. If a homeowner is not in foreclosure, advertising directed at “foreclosure victims” may be meaningless. The same homeowner may jump at advertising regarding selling his home in days instead of waiting months through a real estate agent.
The basics of advertising require repeat contact with a prospect. This is why you see a television commercial with the same ad at the front and end of another commercial. This method of putting the same or slightly different 15 or 30 second spots at the start and finish of another unrelated commercial are called “book-ending” in advertising and are about 40% more effective than one commercial in the same time slot.
Addressing the fear of your advertising not working, I can guarantee it won’t work all the time no matter how good it is so expect this issue. The key element is to put your ads in front of a motivated seller at exactly the right time they need you and do it repetitively until they know they need you. One letter sent to a homeowner may work but a series of 4 – 6 can be much more productive.
I recently had a student call me and tell me how great his “yellow letters” were doing at nearly a 30% response rate. Less than two hours later another student called to say that he had sent 700 yellow letters and had not gotten even one phone call. A yellow letter is a hand-written note to a homeowner that asks to buy his home and is written on a yellow pad of paper. Usually they are hand-delivered to every door in a neighborhood, but in this case the letters were mailed.
The difference is these two students’ success and failure was for various reasons. The 700 guy did a mechanical reproduction of the letter and stressed the fact that he is a buyer of many homes monthly while the 30% guy stated he and his wife wanted to buy a home in the prospect’s neighborhood and hand wrote the letters. A small difference can make a gigantic difference. However, if you start making changes to your advertising pieces, make small perceptible changes instead of massive ones so you can determine what works best.
The key to successful advertising is repetition and answering the prospect’s question, “What can you do for me?” Much less important is how long you have been in business, who you are or how many houses you buy. What is important to the listener or reader is, “How can you solve my problem?”
Focusing your advertising on this mantra of solving homeowners’ problems is what will work. However, no matter how good your advertising is it will only succeed for a few percentage points of your prospects and only if you catch them at exactly the right time. With this minimal acceptance rate in mind, you should plan on an advertising budget that makes sense to start and sustain and only add to it as you make profits on deals.
Too often new investors start with many advertising methods and never stick to each one to see them work. They quit in frustration and say their adverting doesn’t work. Likely another investor in their area is using a similar piece and doing very well – timing is much more important than the quality of the piece.
One good way to get started in seeing what works is to copy other investors’ basic methods – the most successful ad pieces will have been in use over and over for at least 2 – 3 months. Any advertising will work’ it just takes persistence and an advertising budget that will not send you to the poor house.
While I have students who mail over 8,000 pieces a month, their results vary greatly with the same pieces and they are always tweaking them and re-mailing to the same lists. They may spend $20,000 a month but they are doing many times that in net profits. While some of their is their ad pieces, but the consistency and repeat mailings to the same individuals is their key to success.
Start your advertising with an affordable monthly amount and this can be very different for everyone. Stick to 3 – 4 methods so you can see which one or two is working best and put more money in that area. Be careful if you try radio or TV ads as they are expensive and sporadic and require at least 3 – 6 month commitments to build credibility.
Advertising must be an ongoing program because it is the most important aspect of a self-sustainable real estate business. Any advertising will work if done as a sustainable program including door knocking, door hangers, direct mail pieces and numerous “low cost” methods to initially get you deals – just do them even if you feel they are failing because most likely, you gave up too soon!