Direct Mail and the Rate of Return

[davisgroup]

I have just started as an independent FE agent, and so far, so good. My only concern is (and I realize this is a worn out topic) the rate of return on my direct mail. I went with a highly recommended company and opted for their most successful mailer. I was told it generated almost 1% better return than their less expensive mailer. I staggered two, 1,000 piece drops in different locations and received 15 total replies. If my math is correct that is .75% rate of return, which is even less than what the company told me I could expect from the cheaper piece. Those leads have costs me $60 a piece, which seems unsustainable. I want to continue doing direct mail, but would like to get my costs down to maybe $30 a lead. Has anyone ever heard of a company that charges by the lead, or provides some type of guaranteed response? Your ideas would be appreciated.

 

[Rearden]

If you want to shave 20 to 30 points off your commission for an FMO to carry the responsibility for providing you leads, talk to EFES or Securus.

Otherwise, you really need to drop 5000 to 10000 pieces to get a true, weighted average of what the response is.

Also, how much time has it been since you sent your first batch? You will get a few straggler leads coming in here and there over the next several months, which boosts total response.

And what mail house did you order from?

 

[360]

I have just started as an independent FE agent, and so far, so good. My only concern is (and I realize this is a worn out topic) the rate of return on my direct mail. I went with a highly recommended company and opted for their most successful mailer. I was told it generated almost 1% better return than their less expensive mailer. I staggered two, 1,000 piece drops in different locations and received 15 total replies. If my math is correct that is .75% rate of return, which is even less than what the company told me I could expect from the cheaper piece. Those leads have costs me $60 a piece, which seems unsustainable. I want to continue doing direct mail, but would like to get my costs down to maybe $30 a lead. Has anyone ever heard of a company that charges by the lead, or provides some type of guaranteed response? Your ideas would be appreciated.

I've got some direct mail leads you can pick up on a cost per lead basis. Let me know if you need some help.

 

[Josh]

I've got some direct mail leads you can pick up on a cost per lead basis. Let me know if you need some help.

Brad is a good dude, you should definitely talk to him about it.


I'm not aware of any mail houses that will guarantee a response rate or charge per lead. If there were, they would definitely charge more than $30/card.

On the plus side, $60 leads aren't necessarily unsustainable. If you can sell at least 2/10 at an average premium of $600 then you're doubling your money. At 20 leads/week and closing 4/20 you're at about $2,400 in commissions and it cost you $1,200. If you can even bump that up to 3/10 you're generating $3,600 in commissions on your $1,200 investment. Keep it in that range every week and that seems very sustainable.

 

[JustinSane]

Well said Josh. I will add, that the problem with these companies that let you buy leads for $30/each, will also dock your commission by 20-30% at least....therefore, those leads end up costing a LOT more in the end, when you add it all up.

My suggestion would be to look for a different lead company instead, since the one you use sounds like they are mailing to a well-saturated list (most likely).

Some I have personally used, include Main Street Power Mail, The Lead Connection and Jen Marco Leads....Hope it works out for you!

 

[Justin Bilyj]

I used Jen Marco for an order. Their avg response rate is 1.75% and a 2,000 minimum order@$800. I got 16 responses so far. Have a good ROI, but was dissapointed with the rate...

 

[Josh]

I used Jen Marco for an order. Their avg response rate is 1.75% and a 2,000 minimum order@$800. I got 16 responses so far. Have a good ROI, but was dissapointed with the rate...

You're disappointed with an almost 2% response rate?

*update* I get it, you're at less than 1%.

You don't know who mailed ahead of you or how things tend to pull in your area. Direct mail can be pretty fickle.

 

[Rearden]

2%/2.............................

 

[jdeasy]

I have just started as an independent FE agent, and so far, so good. My only concern is (and I realize this is a worn out topic) the rate of return on my direct mail. I went with a highly recommended company and opted for their most successful mailer. I was told it generated almost 1% better return than their less expensive mailer. I staggered two, 1,000 piece drops in different locations and received 15 total replies. If my math is correct that is .75% rate of return, which is even less than what the company told me I could expect from the cheaper piece. Those leads have costs me $60 a piece, which seems unsustainable. I want to continue doing direct mail, but would like to get my costs down to maybe $30 a lead. Has anyone ever heard of a company that charges by the lead, or provides some type of guaranteed response? Your ideas would be appreciated.

Mailhouses will mislead you about the returns. Never take what they say as gospel.

Nationall the return on FE mailers is around 1%. Since there are many areas well under 1% there has to be some that getting more.

In my area I would be happy with a .75% return. That's well above average.

Still 2000 mailers is far too small a sample.

 

[Justin Bilyj]

Im gonna order 4,000 next week, will keep everyone posted...