More Marketing Thoughts

Now I know most people that are in this business don’t think in terms of this being a REAL business, but just them buying a house and selling it or renting it out. But the first thing that any of us would do in anther business would be to try to get “leads”. It doesn’t really matter if your leads are for new customers for you clean clothes for, or if they are multi-million dollar software customers, you still have to get that lead to be in business. So why don’t we in the real estate investment business treat this like a “regular” business? First of all how many of you that are reading this have a business plan developed for your investment company? How many of you even started a real company before you bought your first house? Those are the getting started places that you have to go, and within that business plan you have to determine how you are going to get the leads to buy houses so that you can make money. Think of it this way, if you are not prepared to be in business, are you surprised when you fail? Are you surprised when a banker turns you down? Would you take a risk on you if you were the banker? So business development is another thing that I feel strong about, but I will save that for another time, but I said all of that to say, don’t leave your business to chance, make a marketing plan to start and figure out what works for you. So let’s talk about some of the types of marketing that we mentioned in the last blog. How about the psychology of the referral side of our business. Referrals are one of the easiest and best ways to get leads in our business. Think about this minor fact; if someone refers a person to you the likelihood that they will call anyone else is very slim. In their mind you are the professional that someone referred them to and they are going to deal with you and only you. This is position that you want to be in. The idea is that everyone has a sphere of influence, meaning a number of people that they come into contact with on a regular basis in their normal day to day life, be it business or personal. The obvious ones are the business contacts that all of us think about like your banker, a realtor, a mortgage broker, etc. but what about the other just as obvious ones. How many people do you think the girl at the local 7-11 talks to daily? I am sure a bunch right? Well over the last few years that conventional knowledge says that 1 in every 4 people are either selling a house, buying a house, or know someone that is. That being said, I always tell my buyers if you have talked to 4 people that do not know that you buy houses then you have already missed a referral. Think about that for a second…….do you have a number of houses that you probably missed a lead on in your head now? So before you kick yourself in the butt, let’s talk about what to do to fix it. First make a list of the 200 people in your sphere of influence. Trust me the first 100 or so are easy, the next 50 are pretty tough, but the last 50 or so you will be pulling your hair out. You must then come up with a way to “ask” for this referral. It doesn’t need to be an obvious type of an ask, but a very soft sell version. We use greeting cards for this message.We get anyone that we come in contact with to give us a mailing address, especially the business contacts. Then we start a mail campaign to all of them. We like to do a set campaign of the contacts birthday and then seasonal communication from there such as happy holidays, a summer (maybe 4th of July), a spring greeting, and a fall greeting. This puts you in your contacts mind at least 5 or 6 times per year. The message can be very slight, just a “enjoy the season from xxxxxxxx for all of your real estate needs” will be fine. The average that we have experienced is about 1 lead in every 6-8 mailings. We average somewhere around $1.70 per card so if you do the math that is a $13.60 cost for that lead. If I use my other experience for buying I know that I need about 20 leads to result in 10 appointments in order to result in one buy. That works out to $272 per buy, that I will average somewhere around 10k-20k on for profit!! That is a pretty good return if you ask me. So here is the exercise, write down the people on your list and see how many of them you do not have an address on. I wager it will be a bunch. In this digital age we have everyone’s cell phone and email, but could not tell you their address to save our lives. Now we, as real estate investors, have an advantage here, we are used to finding peoples mailing addresses since we are always tracking down a seller of some sort or another. So use this power for good not evil and find all of the addresses of the business contacts that you have, along with any others that you have. Once you have all of this info you are ready to start building your referrals. Keep in mind you are giving out business cards as well to these same people. In fact you should put a business card in everybody’s hand that you can. Business cards put your contact info in people’s hands that may at some point think enough of you to give you a call. So design you card to convey the message that you want out there. You may even want two different ones, one for official contacts and one for the average contact. A professional version and a marketing version so to speak. I love to have a in-your-face version to make everyone look twice, but my wife always wants me to have a professional version to give to serious business contacts. Your business card should feature a USP or unique selling proposition for your company. This is basically a “what you do” in a sentence type of thing for your business card. So how do you handle all of this greeting card mess, and addresses and mailing?Well, we use an automated system that you can check out at www.sendoutcards.com/36601 that handles all of the hard stuff. It has an integrated contact manager built in and allows you to program the campaigns of greeting cards that you want to use. You can even customize them with photos that you upload and you can even upload your own real signature as well. The total price that we pay per card averages a $1.60-$1.70 per card, including postage and everything. There is not magic in the system that you use, you could just as easy use an excel spread sheet and do the work to stuff them and mail them yourself, however I feel like all of us as investors have things to do that return us a higher amount of money than $1.70 per card. So whichever way is not important, however getting the job done consistently is, which is why we use this type of a system. Once you set the people and when you want the cards sent out, it does itself, nothing for you to even worry about. So this should be leg number one in your referral system, start sending out those cards to all of the people in your sphere of influence and watch those calls start to come in. And while we are talking about the calls coming in please also remember that referrals are reciprocal in nature if they are going to work. You must also refer people to other business professionals. This is called Karma at its best. If you refer people that you come in contact with to your network the network will refer back to you, so make it all about you.