Lead generation with powerful marketing strategies that really work

I’ve heard many people say that generating leads for creative real estate investing is a numbers game. That may be very true, but there are definitely things you can do to make those numbers work in your favor and greatly improve your odds while spending less money in the process.

Why do we need to generate leads? This is what I tell my students: they must learn and understand my axiom, proven over and over again:

LACK OF CUSTOMERS = LACK OF OFFERS = YOU’RE OUT OF BUSINESS!

Now this is true for almost every business, but today let’s look at some strategies I use to get my cost per opportunity ratio as low as possible. The first thing I want to discuss is the ‘Shotgun vs. Targeted approach to get motivated sellers.

The shotgun method involves buying a list of multiple zip codes and mailing it to everyone on the list. The other name for this strategy is ‘blind archery’, because you’re essentially shooting a thousand arrows into the sky, hoping they actually hit something. You can make a business out of this if you are willing to spend a lot of money and are prepared to do this every month because your response rate will be very low.

The other problem with this tactic is that it is impossible to tailor a message to this audience with this approach. Are you looking for people who are behind on their house payments? People going through a divorce? Someone who just got fired from their job? With the shotgun approach you never know… and it’s important to understand that each of these groups is very different psychologically and will respond to different messages. For all of these reasons, it will be extremely difficult, if not impossible, to achieve “message-to-market match,” which is the foundation of a successful marketing campaign.

What works much better is to get the most specific list you can get and write a message to that group that addresses their current need and situation. You can get a list of people in foreclosure pretty easily, because it’s public record and there are probably plenty of people in your local area who compile a new list every week and will sell you that list. In all cases, money spent on a well targeted message to a defined group will be money well spent.

You can get lists of people who were listed with a real estate agent, and that list has expired. Do you think the message sent to people in foreclosure is likely to get any response from the expired listings message? Probably not, but that’s why you’ll have a specific marketing piece that addresses their concerns (ie showing them local MLS stats of expired listings and getting their attention).

There are many types of specific listings you can get, and as you gain more experience in real estate investing, you’ll meet reputable listing brokers who can source the type of listing you want to market, and can create marketing pieces directly for that group that will improve greatly improve your response rate and you’ll solve the first problem new real estate investors have… getting a lead to talk to.

After a while, you will be able to reasonably predict a response rate to your marketing. For example, if I know that in a month I can get 30 responses per 1000 pieces of marketing (a pretty good 3% response rate), and I know that 5 of these prospects will have the makings of a deal, and I know I can close 4, then I have the foundation of a business that can provide real wealth in a relatively short period of time.

Therefore, the key to a successful real estate investment business is to identify market segments and market to them using a very specific message tailored precisely to that list. In my business, I have a very specific sequence of 5 letters with a precisely crafted message that automatically adjusts over time based on the progress of your foreclosure process.

I also use special “linked” letters to point to expired listings. Once again, they are planned in a sequence and convey the message that resonates with homeowners who had worked with real estate agents and experienced no results, they were disappointed when their listing expired without a buyer.

There are a few other high response lists that we market to, but again, the key is the message to match the market.

In my next article, I’ll discuss how to test responses to determine if there’s agreement there or not, so you don’t waste time talking to people when there can’t be a positive outcome.