I love direct mail when it is done right. There can be a massive response to direct mail when it is done right. There can be a massive amount of money made when it is done right.
So what does it take to do it right?
It takes having the right message to the right market.
About a year ago, I sent out a direct mail piece to people that already had a reverse mortgage. I sent it to people that got a reverse mortgage prior to the FHA claim limits being increased.
The response rate I got was absolutely amazing. I received over a 17% response rate. That response rate is INSANE! Most direct mail campaigns are lucky if they get a .5% response rate. A good response rate to a good cold list with the right message is 1%. Yet I was able to get a 17% response rate.
Believe it or not, I am still getting calls off that letter over a year later.
I am a firm believer in ugly marketing. The sales letter was 2 pages and black and white. The envelope had peel and stick address labels of the recipients and a hand stamped return address. I also used a live stamp. It kind of looked like junk mail, but not quite either. In other words, people opened it up because they had to make sure it was not junk mail. And getting your mail piece opened up is one of the biggest battles you face.
It was a small list that I got from the title company. There were only 378 people on that list. Yet I got over 60 phone calls from it.
But you know what, I would never send it again.
I know that sounds insane. With over 60 calls from people wanting to refinance their reverse mortgage I should have been closing a ton of loans right?
I could not help a singe one of those people that called. Not one.
As one of my favorite mentors is fond of saying, you can’t deposit response rate.
The people that called fit into 1 of 2 scenarios. Either there was not enough equity for them to be able to do the loan. Or there was a ton of equity but their home value was way over the FHA claim amount and the amount owed was to close to the claim limits for me to do anything.
In other words, I spent a ton of time talking to people and running proposals on people with reverse mortgages that would never qualify. It was frustrating on my part and frustrating on their part too.