Is it time for some Local Area Marketing (LAM)?
I was reminded over the weekend how much of a positive impact can be made from a great LAM initiative when I received this impressive Direct Mail (DM) piece from a local realtor Guy Powell Real Estate
What I love about it:
✔️ Happy, welcoming face of the human himself – not hiding behind a logo, making it personal
✔️ Clear & meaningful message – Suburb Review Miami – all Miami Residents are going to be intrigued about property values whether they’re renting, buying or selling
✔️ The DM piece (re)establishes the realtor as a authority in real estate, and particularly in the neighbourhood of Miami, as the DM piece includes great stats such as annual median growth in 1 year, the population number, how many sales in 3 months, highest & lowest house & unit prices, the agencies specific residential sales for the first 6 months of 2021 and some unique selling points (USPs) as to why Harcourts Coastal should be considered if you’re in the property market on the Gold Coast.
If your business relies on your local community then don’t forget some of the more traditional marketing options can still work for your business. And it’s now a novelty to receive ‘hard’ mail.
How to Track your Success
✔️ You can include a QR code for people to scan that will take them to a specific page on your website giving you the ability to track page visits
✔️ Use a dedicated landing page as the call to action (CTA) on your flyer giving you the ability to track web page visits
✔️ Use a dedicated phone number to track calls. You can use this number ongoing for any marketing initiatives however you need to only have 1 campaign using the number at one time to accurately track campaign success
✔️ And if you don’t do one of the above, at least look at your social media and website visits during the campaign period to see if you saw an increase.
✔️ You can also check your email and phone enquiries to see if you saw a surge during the campaign period
Local and national printers like Snap Services or Vista Print can provide competitively priced printing options for you, and Australia Post or a local postal/mail house can assist with sending your mail out. Mail Houses sometimes offer the entire solution from design > print > mailing.
How much does it cost?
The cost comes down to how many pages your direct mail piece will consist of, is it full colour or mono (black + white), what the paper stock will be (thin paper is cheaper than heavier stock paper) and also the print quantity.
As a general rule, I allow for $1 – $1.50 for a 1 page A4 piece plus postage. So, if I print 1000 A4 flyers and send to 1000 homes, the cost would be around $1600 – $2100.
Note, paper prices are increasing due to a shortage of timber so be sure to check with your local printer what’s available and at what cost.
How do you know it’s worth doing?
Before you undertake any marketing initiative you should be clear on what your objective is as this will help you to determine what activity you should do.
In this Real Estate example, I may set 2 objectives:
1. Increase brand awareness
2. Drive enquiries for the suburb of Miami (for buyers and sellers)
To determine my required Return on Investment (ROI) means knowing your numbers… and I don’t really know the Real Estate industry however I’ll have a stab at some numbers, as regardless of the numbers, the approach to working out an ROI is the same:
- How much does it typically cost to get an enquiry (If you don’t already know this, I encourage you to start learning what this is as it enables you to determine what return you need from any marketing spend you do across various activities). I’m going to take a wild stab in the dark that with real estate it’s at least $500 for every listing.
- Based on an average CPE (cost per enquiry) of $500 I need to get 4.2 enquiries to break even on my spend of $2100 ($2100/$500)
- It’s also extremely valuable to know your conversion number. That is from the leads/enquiries/website visits I receive, how many of those convert to actual customers.
In regards to websites, it is well known that only around 2% of all website visits ‘convert’ to a sale.
For B2C marketing, in general, I see the formula works like this:
Audience size = 1000
0.02 or 2% will respond = 20
20 – 25% will convert = 4 to 5 sign ups (listings)
Based on the above calculation this Direct Mail piece should cover it’s cost… But we want to take it further than just forecasting listings. We want to determine what revenue these new listings (sellers) will do for the business:
House is listed at $1,215,000 (using median house price from flyer)
Commission is ~3% therefore each customer (seller) equals $36,450 in revenue
<disclaimer: I’m not 100% sure what the current agent commission is so the 3% is indicative only>
Total revenue as a result of Local Area Marketing
If all 5 listings sell, the Direct Mail piece has driven $182,250 in revenue ($36,450 x 5).
I am confident a lot more hard work goes into getting and making the sale but the above approach & formula helps you determine what marketing activities are worth doing … and what you should except when you put marketing activity in place.
In addition to setting performance metrics on the marketing activity, you can use the forecast to manage resources. If your forecasting suggests, say a 20% increase in phone calls, you need to look at how you can service the increase in calls.
If you recieve 20% more online enquiries, do you have suffiicent team members to respond in a sufficient time period to these enquiries.
Have you order more stock if you’re sellng inventory?
Learning your marketing numbers will not only make you more astute as marketing, it will help you manage your business better.
(Learn more about knowing your numbers here)
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