If the title “the good, the bad & the ugly” grabs your attention, it should. Because it’s time you knew the whole story. Not just the good, but also the bad and the ugly side of mortgage direct mail. Today we go beyond the sales pitch and tell it to you straight. In the end, you’ll be armed with the inside knowledge you need to know before spending another dime of your marketing budget.
This is the easy part of the story. There’s no question that a well-planned direct mail campaign is proven to generate at least a 2-3x return on your investment. The winning formula is simple:
1) Select the right list: Since about half of your budget goes to postage, you can’t afford to waste money mailing to unqualified consumers. Real credit bureau data is best for targeting the most qualified mortgage prospects, and it’s by far the most accurate data available.
2) Develop a compelling message: For best results, keep the message simple and avoid over-selling, or throwing out too much information in the letter. A simple snap-pack style mailer works well and has a very high open rate – mostly because it looks “important” to read.
3) Stay flexible and track results: What works today, may not work the next day. A good practice is to set up a sampling of variables – i.e. different list criteria & content – and test/track the results for post analysis. Quite simply, learn what’s working lately, and dump what’s no longer performing.
Let’s face it, mortgage direct mail is not cheap, and it’s not for the faint of heart. It requires a long-term commitment, along with a healthy budget, some patience, and hands-on involvement. But, when your campaign is up and running on all cylinders, and generating a steady flow of leads, that’s really not a bad price to pay in the end. Another word of caution: stay closely involved in your campaign, and watch out for people who might try to take advantage of your lack of knowledge (more on that below).
Now, for the ugly side. Unfortunately, there are some unscrupulous – or “shady” – direct mail practices out there. And all of them can be easily averted if you know the right questions to ask. Here are most common trouble areas, and more importantly, how to avoid them:
1) Your list has been used by multiple advertisers – including your direct competitors. Beware of vendors who carelessly offer “one size fits all” discounted lists, which can be re-sold over and over, and remember you get what you pay for. Rather, invest in a fresh, custom prepared credit bureau list that you select and control – and it will be worth every penny!
2) You overpaid for postage. Exact postage can vary by up to .06 per piece, depending on the composition of the mailing list. Postage should be a direct pass-through cost, but some vendors will inflate the postage amount to offset a “too good to be true” low mailing cost – and pocket the difference. The solution? Always ask for an official USPS postage estimate (form 3600), and it will tell you the exact postage amount due for every drop.
3) You paid for more than what actually mailed. I hear it all too often: clients who have been burned by vendors who didn’t end up mailing the full amount paid for – or sometimes, the mail was never dropped at all. But how can you prove it? Easy. There are two methods for ensuring your mail gets dropped completely and on time, and both are free. The first is to insist on a signed 3600 form, notarized by the USPS when the mail pieces are delivered to the outbound mail center. The second is to sign-up for Track N’ Trace reporting, a web based USPS service that records when each mail piece was scanned for local delivery (that’s the bar code you see on each mailer).
The Bottom Line
Now that you’ve heard the good, the bad, and the ugly, you can proceed with confidence while building your next successful mortgage direct mail campaign. And if you’re serious about taking your marketing to a whole new level, contact me today for a free consultation to learn all the answers, and then some.
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