Building Effective Email Lists to Blow Up Your Marketing and Shrink Advertising Costs
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Hey, this is Josh Weidman here with REI 360. Thanks so much for joining me for this week’s training.
Today, I’m going to talk about something that is a challenge for any investor, really, and that is how to increase your leads without really just blowing up your budget.
Several years ago, I had a home buying company that really grew, and grew, and grew. We were wholesaling almost twelve properties every month, but to get to that point, I had to build up an overhead of tens of thousands of dollars. Our Google AdWords budget was about six or seven dollars a month, we had full-time canvassers that were going out into the neighborhoods, who were my employees, who were going out knocking on doors. I had a canvas manager managing them, we were doing direct mail. We had a lot of other marketing outlets, but the problem was we just grew, and grew, and grew and got to the point where if we didn’t have five or six closings on monthly basis, we were losing money.
So, over the last several years, I’ve tried to take that idea of blowing up the number of leads that you get and boil it down to kind of some systems and some outlets, let’s say, where you can increase your leads without killing your budget. In this case, I want to talk about email marketing.
Email marketing is kind of new to the world over the last ten/fifteen years, but it’s something that is a really great opportunity for you to get into the market and to essentially send mailing campaigns to really targeted groups of people.
And who am I talking about? I’m not talking about Tom and Susie Homer, okay. Those are not the people I’m talking about. I’m also not talking about double opt-in lists where people that came to your site already, submitted their information, and now you’re following up. Both of those two groups are really good people to market to, good people to follow up with, but it’s not who I want to talk to today.
The people that I want to talk about today with these lists are a very, very targeted group of people that can sell you multiple deals on an annual basis and also they can do a lot. I’m jumping ahead of myself.
So, the title of today’s training is Building Effective Email Lists to Blow up Your Marketing and Shrink Your Advertising Costs. This is going to be done in four simple steps. The best part about this is by the end of this training, you’re going to know specifically how to go out and do this and better yet, you’re going to be able to do it one time, turn the key, push send, and you’re going to be able to generate multiple, multiple, multiple leads and multiple campaigns with that one click of the mouse to go out throughout the entire year. Alright? So, let’s start with step number one.
Step number one is defining your list. What we want are sources for people that have lots of properties to sell or access to lots of properties to sell. That’s the first criteria, obviously. And then we’re looking for motivated sellers. That’s number one.
The reason for this is that what I want to do goes right into step number two. I want to, instead of having a continual cost to market to these people – buying the lists, printing the postcards, mailing it out over, and over, and over again – I want to be able to have a one-time cost, and I want to generate multiple sales annually. Alright? And finally, I want somebody that’s going to be motivated to sell me their property at a discount. All of those things sound pretty simple, but let’s talk about who these people are, and really the list that kind of kicked me in the butt, got me motivated to go out and build this, and I saw some really great results.
I started with small banks. It just so happened that I made a relationship with a bank asset manager who contacted me and said, “Look, I have this property that’s in the market. I’d like you to make an offer.” Stumbled on my website and the beautiful thing about our initial conversation was he told me what his motivation was. It was the end of the quarter, and quarterly, small banks they have to do their reporting. They want to get these distressed assets off of their books, and if they have to take a loss it would be a loss for that quarter and then they can move on.
It’s not this distressed asset, this nonperforming asset, that’s going to be dragged on the books from quarter after quarter, month after month, year after year. So, I had their motivation and I luckily I had an in to the bank, and so anyway, I make an offer on the property. This property just so happens to be under contract with someone else for forty-five thousand dollars. This individual could not close on it. I looked at it, I offered fifteen thousand, ultimately the bank’s CEO called me back. He said, “We can’t take fifteen thousand. I can take twenty. If you want to take twenty, you can do it.” I put the property under contract, I wholesaled it, sold it for thirty, I made ten thousand dollars. It was a great deal! We closed quickly, everybody was happy, we go on.
And then the end of the next quarter comes, and I get an email from the same bank, and now they have three or four assets that look pretty promising, and I call them up and talk to the asset manager. He said, “Make an offer.” I made an offer on three or four properties, I got two under contract, I made another twenty thousand dollars on the other two properties, and we moved to the next to the next.
What I realized is these small banks they do not have thousands of properties, but they certainly have dozens of properties on an annual basis. That’s one small bank, they have a low number of assets, and so what I thought was “Hmm, I wonder if there’s any other small banks in my area with a few assets?”
So, there was my initial list. They had lots of properties or access to lots of properties, I could pay one time to purchase the list and put it together, and I could do multiple deals annually, and they’ve got an incentive to sell the property at a discount.
What are some other groups that this might fall into? Probate attorneys is a great one. Probate attorneys are under-appreciated, a lot of times they’re underpaid, and sometimes they don’t get paid until an estate is settled, and that’s no fun for them if they can’t sell a piece of real estate that’s in that portfolio or in that estate.
Some other things – I mean, the biggest, really the hugest pool that we’re looking at here, would be real estate agents. Real estate agents are a great asset to any real estate investor’s business. That said, you have to be very clear, and we’ll get to that, I think, what is that? Step number three. Yeah, we’ll get to that in step number three – being clear about what you want, things like that. But real estate agents, also a good outlet.
I’m always amazed at the ingenuity of my students. I was talking to one of my students recently about these lists, and he brought up that there’s a couple of churches that he had sent mailers to, and talked to the pastors, and he found out that guess what? These churches, a lot of the time, they will get properties that are donated to them either when someone passes away or when something like that happens. So, what he did is he went to a couple churches in the local area. That might be another outlet. Local churches within your target market, maybe you have a certain size or below, and there’s another outlet.
Bail bonds. Another great place. Sometimes they will put a bond on a property and the bond defaults, and they end up taking the property. These are people that they run into, or sources, let’s say, that they run into, opportunities for you. They have multiple sources of multiple properties, they’re motivated to sell at a discount, you can put the list together with a one-time cost.
So, that’s the major difference between really ballooning your marketing budget, and keeping it under control, and actually reducing its cost by same amount of leads or less and that is one-time payment.
Now, step number two. That brings us to sourcing a list. Sourcing the list is a big deal! Because you might know what you want, you might know what you want in the list, but you might not know what the list is, right?
So, first, let’s talk about outsourcing. I love outsourcing. This is the opportunity for you to reach out and leverage your time, leverage your knowledge, and hire somebody overseas. For just a few dollars, and I’m not talking about a few thousand. I’m not even talking about a few hundred. You can hire someone overseas to number one, do the research for you to find the banks, or the churches, or the probate attorneys, or whatever in your market. And then to scrape all that information and put it in an easy-to-access program that you can use. I’m telling you it’s amazing how inexpensively this can be done.
There’s a couple of resources for you to access these people. Number one, guru.com, also elance.com. I use both, I really like elance.com – they have a large, diverse group of talented individuals. But one thing you’re going to notice wherever you hire these people from, you are going to get bids from a dollar, or ten cents a record, up to ten dollars a record. You need to be able to interview these people virtually – it’s all online – communicate back and forth, and get the information that you need. Something that’s reliable, something that you’re comfortable with. It is really excellent. You need to talk to them about the desired fields or desired information.
I’m going to use the bank list that I’ve put together as an example. That had a hundred and five records in it. I asked for the last name of the CEO, I asked for an email, and mailing address, and a phone number. Well, the person that I found had a program that actually scrapes the personal addresses for the CEO from all over the web and at first, I was a little reluctant, but for the hundred dollars I paid for the list I figured, “You know what? If I don’t get any response from the email, then I’ll get our mailing campaign, or maybe it will work, or maybe it won’t.” It worked, and it was fantastic. It was amazing. For a hundred and five dollars, I got an incredible list. But you’re going to tell them what fields you want and be very specific. Be very specific about the types of records that you want.
Here’s an example: let’s say I’m putting together a list of probate attorneys within Washington D.C. I want to be very specific with the individual I’m talking with about these lists. I want to really say to them, “First, I want to search and find out how many probate attorneys we’re talking about,” and define the word ‘probate.’ “Probate is someone who is working with the heirs of the deceased to process a will or an estate.”
So, they’re going to search, and they’re going to find the number of records. If they come back and there are fifty-thousand probate attorneys, according to them in certain cities, that should raise a red flag. That is way too high. The reality is there might be a hundred, two-hundred, maybe a thousand – that’s within reason. But most of the time – well, not most of the time. Sometimes you have researchers who are lazy or don’t quite understand what I’m telling them.
So, break the task up and the assignment up into multiple steps. Step number one: find the number of records that you want to pool. Step number two is going to be go and pool those records. Outsourcing it is a great, great source. For only a few dollars you can have the customized list built for you.
Then, we have these two are very similar. List brokers and list lenders. Let’s define this. List brokers are companies that will employ the same type of outsourcing to go out and build customized or semi-customized lists that you can either define or that they will provide. This is probably where you are going to find your list of real estate agents in a given market, town, city, state, or even nationwide. It is also a place where you can find demographic information. You can define your email, your list, by demographic, financials, locations, the whole nine yards. List lenders are something very similar. The major difference between these are this: the list broker will hand you the information, you hand them a check, and they might have a good return, they might not. At the end of the day, it’s a lot more risky emailing this list then to deal with a list lender because most of the time, this information is scrubbed from the internet. It’s scrubbed from different websites, compiled together, and these people haven’t opted in. They haven’t said “Yes, you can send me information.” That’s important because with spam laws, it can be a very, very expensive mistake to just spam ten thousand people because they’re on your list that you bought from a list broker.
List lenders, what they do is they will provide a promotion, they can put together a very targeted list, and they will send an email on your behalf, and it will cost you money every time they send it out. As I’m looking at these, I like the outsourcing the best because it’s the most cost effective, it gives you the most control of the situation. With that said, you’re going to have to commit to a few hours of defining exactly what you want, communicating that information to the outsourcer and the researcher, and then reviewing and communicating with them as the project goes on to make sure you’re getting what you want.
Now, we’ve got a list. We’ve defined it, we’ve sourced, we’ve got this data. We’ve got the email names, the phone numbers, address, all this stuff of our target list.
The next step is to write good copy. What is copy? Copy is just the message. It’s what you want to say, what you want to display to these people that you’re targeting.
It’s very, very important that what you’re mailing out there is not salesy, it’s not gimmicky, it’s not BS, for lack of a better term. You want to be real when you’re sending these things. If you’re emailing an agent, tell them what you want and what you don’t want, who you are, and how you can help them. Not just an agent, but anybody else. When I mail out to these banks, my key is, “I want to get rid of your nonperforming assets. I want to help you get rid of your nonperforming assets for your bottom line before the end of this quarter.” And I said it two or three times throughout the course of the email, and I also told them, “Hey, this is why I’m contacting you, this is how I got your information, this is what I can do for you.” Keep it short, keep it simple, and also, make sure that you put at the end of the email, “If I’m contacting the wrong person here, let me know! I’m sorry. This is the information I had, I wanted to reach out to you, and if you’re not the right person, let me know.”
I get a lot of response on that that just said, “Hey, we don’t have any properties right now, Josh, but when we do, contact this person at the bank,” and I updated my records and that’s where it went.
So, let’s take a look at this: we want to make sure that we’re real with what we’re telling people. We want to be honest with what we present, with what they can expect from us. We do not want to spam them. This is a big deal. You don’t want to seem salesy, not gimmicky, and you really don’t want this to look like a polished marketing piece. This is almost like the opposite of a big fancy postcard. This is a personalized letter or a personalized email. It comes directly from you to the person you want to talk to.
What you’re going to do also is you’re going to make multiple contacts, multiple emails. Typically, what I will do is do maybe one a month, and I’ll do an additional one a month before the end of each quarter – “Hey, just wanted to let you know. Hey, just following up. Don’t forget about me.” Just stay in front of them.
We got the list, we have the copy, now it’s time to automate. I said when we started this training that I was going to show you how to, with just a few dollars, generate a ton of leads and set up your marketing for the entire year. So, this is what needs to happen. What you want to want to deliver, you have who you want to deliver it to. Now, we’ve got to figure out a way to deliver this. This is not the kind of list that you can upload into a Aweber, or iContact, or any of the third-party email marketing websites or software packages. Why? Well, they did not opt-in. These people did not contact you and say, “Hey, I want to do business with you,” or “Hey, please contact me and email to follow up.” So, we have to walk a fine line. We do not want to break the law. We do not want to spam. We don’t want to be offensive to the people we’re contacting. This is a soft contact.
So again, that goes back to good copy, being straightforward, honest, and very clear about what you’re doing.
What we need is a POP3 email marketing software. This is a program that, a lot of times, you can download for free if you Google this. You can download a free version that will allow you to send up to a hundred emails at a time, sometimes more than that, but it’s simple design. What you see is what you get. You cut and paste, basically you load your list up into the program, then you cut and paste your email copy, and it will allow you to customize things like your salutation. Instead of having, “Hi, Vice President.” Maybe you put in there “Hi, Mr. So and So,” and the ‘So and So’ remembers what your list. So, it’s “Hi, Mr. Johnson. This is who I am, this is what I do. Let me know if you’re interested,” and it’s a customized email.
Once this stuff is set up, now it’s time to schedule the delivery. You can do this for all twelve or all fourteen/sixteen of your emails that you’re going to be sending out, and you set it up one time. All of this stuff that you’re doing is leading up to this point where you are putting, I don’t know, four hours worth of work culminating with setting up all of your email marketing to bank presidents for the next year. You schedule the emails, and you click send.
The only complications from this point forward is update this list. And what’s that mean? There are going to be times when people don’t want to talk to you anymore. It happens. Don’t feel bad about it. But because we’re dealing with a small list, because this is not an opt-in list, if somebody says “Don’t email me back,” don’t email them back. Don’t take it personally. Just don’t email them back.
In addition, there will be even more times when the bank president is not the person you need to be talking to. They’re going to put you in touch with the asset manager. Well, the asset manager is a little bit harder to identify, especially with these smaller banks. You have people who are wearing several different hats in the organization, and they’re title is not ‘Asset Manager.’ So, when you send out an email to Mr. CEO, and Mr. Vice President of Asset Management emails you back, search for the bank, get rid of the CEO, and contact the vice president. Put his information into the email list. This is important because you know what? If they’re going to do the courtesy of following up with you and referring the right person to talk to, make sure you’re just as courteous with contacting the right person. Don’t step on toes, basically.
So, that’s the entire gist of today’s training. We want to increase our lead counts, decrease our expenses, build relationships with sources for discounted real estate that will sell us multiple properties over the course of the year.
That’s it for today. Thanks for joining me, and I wish you the best in your real estate investing, and we’ll see you next time.