Direct Mail vs SEO for Real Estate

I almost can’t believe that I wrote that headline?

Yesterday, I spoke with a guy who told me he wanted to run a direct mail campaign to drive traffic to his website and capture leads to “farm” (his word) into clients.

Now, first let me say that farming a cache of leads is a great strategy. You can source your leads lots of ways. We recommend a strong online marketing campaign including strong real etstate seo efforts, ppc, email marketing, and a highly accountable reporting system. direct mail

So, this guy isn’t completely off the mark. Yes, your database of leads and customers is gold. You need to nourish this list and grow it. The more qualified users you can drive to your site, the more leads you will generate. If your site is well built to convert real estate buyers, sellers, and renters into leads, then the more traffic you have the more leads you should have.

As we’ve mentioned many times on this blog, you need to consider the cost of each lead. What did you pay to acquire the lead? If you paid $4000 for 8000 clicks (that’s $0.50 per click or site visitor) on Google Adwords and that generated 400 leads, then you paid $10 per lead. Got it?

Well, let’s think about this direct mail campaign that the guy on the phone wanted to deploy. He’s going to spend money sending those mail pieces upfront. Let’s say he sends our 10,000 pieces at $0.40 each. That’s $4000.

Now, he told me that these mailings were going to direct the users to his website. So, how many of the recipients will actually go to a website on a postcard? Here’s where the plan falls off the tracks.

It’s not likely that many of the recipients will actually go to the website. I don’t know about you, but I toss those mailers in the trash. I pick up my mail on the way into my building and the next thing I do is filter out the junk mail straight into the garbage.

So, if our friendly realtor is lucky, he’ll get maybe 5 or 10% of the recipients visiting his site. If the site was fantastic and converted leads at 10% (which is pretty high) he’d have 10000 x 0.1 x 0.1 = 100 leads. That’s $40/lead. Honestly, the cost would likely be even higher.

Bottom line – For real estate marketing campaigns, SEM, SEO and PPC are far better investments than direct mail. And please don’t be fooled and think that you can generate web traffic efficiently using traditional marketing like direct mail.

Hopefully, we just saved you some time and money.

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5 Responses to “Direct Mail vs SEO for Real Estate”

  • Eric says:

    just curious, a lot of the real estate education out there today centers on the Internet Marketing portion of it, and they evangelize that direct mail to target prospects (eg. pre-foreclosure lists), in conjunction with high-converting squeeze pages,is still a powerful combination for getting leads. I don’t have direct experience myself, so I don’t have an opinion, but what do you think – still a waste of effort?

  • david says:

    Real Estate clients used to tell me (3 or 4 years ago) that if they sent out 1000 post cards, they would get a listing. I haven’t heard anyone tell me that in a while. So I figure it’s no longer the case.

    The answer is NO, I haven’t heard of anyone doing this successfully.

    I’m sure, on some scale sending lots of post cards will drive some small number of buyers to your site and then some of them will convert into leads. That said, you’re talking about some VERY low conversion rates.

    Here’s the situation. I walk into my home and I pick my mail out of the box. I see a post card. I get about 1 of these every day. if I happen to read it that day and it happens to be of interest to me, then I might find the time to go online and visit the website. Then, the landing page has to convert me from a user to a lead.

    It’s really unlikely.

    The biggest issue here is this: We all want to grow our businesses. If you spend $2000 today on a mailing, you might get a deal our of it, but you might not. If you do, then your cash cost for acquiring that deal is going to be $2000 or more and yes you’ll have made some income, but your business doesn’t have much to show for it.

    An investment in SEO is a long term investment. Spend the money now and you’ll rank higher for a while! Keep spending consistently and you should see a consistent return, not a 1 time return.

    Thanks!

  • Lots of good reading here, thanks! I was searching on yahoo when I found your post, I’m going to add your feed to Google Reader, I look forward to more from you.

  • my PPC advertising on Google Adwords is really effective in promoting my affiliate links. my Adbrite PPC advertising cost seems to be higher than Adwords.-*,

  • James Farney says:

    Can’t pick between the 2, but overall I will have to go with SEO. Free traffic for the life of that site. You don’t have to pay for these leads! How can you been a free lead. SEO rules!

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