Something that I hear a lot is that real estate agents don’t believe that farming works anymore.
- Direct mail is old school.
- It’s outdated.
- You should be spending all your time on the internet.
I’m calling that a load of crap, and I’ll tell you why.
About four years ago in my business, I decided that I wanted to farm a specific area of my city. I live in Toronto, Canada, which has a population of seven and a half million people.
At the time I was focusing on condo buildings. So I started small with a zone of about 2,000 condo units and I would send flyers every single month. Pretty soon, I started getting calls—and it kept building from there.
Then I expanded to 5,000 units. And now, every single month, our team sends 10,000 flyers to 10,000 individual condo units. But this strategy would work with regular freehold housing as well.
So what I want to talk about today is what you need to do if you want to implement direct mail into your business in 2023.
But if you want to look at different ways to create new business opportunities, especially in a market where you may not get the same number of sales you were getting before things got rough, keep reading.
What you need to know about direct mail
First things first. When you’re scoping out a potential farming area, you need to calculate the turnover rate, average sales price and typical commission.
To find the turnover rate, you need to know how many homes are in that specific community—how many homes you’re going to hit with a direct mailing every single month. And you look to see, in the last 12 months, how many of those properties sold.
Divide the number of homes sold by the number of homes that are there to get a percentage. A good turnover rate is anywhere from 10 to 12%. A typical turnover rate is probably about 6%.
Townhouses turn over a lot more than larger homes because it’s usually a stepping stone to get to the family home in the future. So, I highly recommend townhouse areas.
Once you know your turnover rate, then you want to figure out the average sale price in the area. So you take a look at all the sales over the last 12 months and figure out the average sale price.
Then do the math based on whatever the typical commission is in your area, and find out how much total commission was up for grabs in the last 12 months. Do the selling side and the buying side. Now you know what percentage of that market you need to get to ensure you’re getting your money’s worth sending these flyers.
After you know the typical commission, the turnover rate, and the average sale price, then you have to do your research and see if there’s anyone else already dominating that area.
If there’s an agent that has a 20% market share of the listings, it’s going to be very, very hard to compete—especially if they’ve been there for a long time.
The reason I went for the areas that I did is because there wasn’t a specific agent that had all the market share; it was kind of spread out between everybody. And I thought, “Okay, there’s an opportunity here.”
A few things you need to know about direct mail
There are a few things to keep in mind before you dive into direct mail (if you’re so inclined).
Number one, it is expensive. Creating and sending flyers that people will actually want to look at costs money. For it to even be worth it, these have got to deliver enough value that people are more likely to save it than to immediately toss it into the trash.
That said, number two, it does generate listings—if you go about it the right way.
You have to send this at least once a month; once every two weeks is actually a better strategy. Keep in mind, too, that you won’t see the results you’re looking for about 9–10 months. It could happen a little bit earlier.
We talked about finding an area with a high turnover. But you’ll also want to pick an area where you actually want to sell real estate, so you’re excited when you get calls to go to these houses.
I’ve found that keeping it simple with a clear message gets me the best results.
Another direct mail hack you definitely want to incorporate into your strategy is a QR code. Ten years ago people thought those failed, but they made a huge comeback during the pandemic. This is the way we’re actually getting appointments.
When it comes to getting people to scan that QR code, I’ve noticed market data performs best. It gets people curious about the value of their homes and of other homes in their area.
A few tried and true examples
Here are a few examples of the types of direct mail flyers that have been working for me
Example #1 says, “Nobody cares about your condo…” And if you’re getting one of these, you’re probably thinking, “Wait, what? What’s this guy talking about here?”
Then at the bottom, it says, “as much as we do.”
On the other side, it has specific downtown condo prices. It shows the data on what’s happened over a period of time with property values—something they probably couldn’t just Google. Even if they did, they’d have a hard time finding this data.
Then you can see a QR code that says, “Scan to learn more.” The whole goal of sending these flyers is to get them to take their phone and scan this QR code.
Example #2 is another kind of statement flyer: “The market has changed. Do you know what your property is worth?” And on the back of the flyer, it says, “Scan to find out.” This will also take them to my appointment page.
For example #3, we make our value proposition very clear. One side of the flyer says what our services are. We have a $10K interest-free home renovation loan. We have a customized concierge service, and we have full home staging. We put the value right there for the homeowner to see.
On the other side, I’ve broken down the average price, medium price, how many sales happen, and the days on market, based on the different areas I’m sending this flyer to.
I’m giving them the data so that they’re interested in what’s happening and they know that I’m the guy. And just this morning, before filming this video, I had a listing presentation from someone that reached out from one of these flyers.
I walked into their property and they literally had a stack of my flyers on their table.
Example #4 shows all the data you would ever need to know. It can get cluttered very quickly, so stick with the data most relevant to your target audience. And make it as pleasing to the eye as possible. No blocks of text in minuscule print. And don’t cram it so full of data that there’s not enough white space to balance it out. Less is more.
When they flip this flyer around, there’s a QR code for them to scan for more personalized info.
Why you should—or shouldn’t—get started with direct mail
At this point, you’re probably thinking, “Tom, this sounds expensive, and it sounds like you’re not gonna get results for a while.”
I will say that if you haven’t already got your repeat and referral figured out, or you haven’t looked at YouTube as an opportunity to find more business, or you don’t have your strategic alliances—don’t do this yet.
But if you’ve gotten to a point in your business that you’re getting repeat and referral, and you’re getting Realtor referrals, and you know loan officer referrals and things like that, then I think you should seriously look at this strategy—because it gets you listings.
And that is the most important thing.
Why this approach to direct mail works
Flyers like the ones I’ve described are your way of showing that you’re the authority.
Even though I had sold a lot of condos in that specific building, for the one I went to the other day, the first time they called me on the phone, they said, “We know you’re the guy around here that sells all the properties. Can you come take a look at ours and let us know what it’s worth?”
That shows just how powerful this can be.
But you can’t give up on it. Just like video. If you do this for three months and you give up, it won’t work. You do this for a year and give up, it’s not going to work.
I’m four years into direct mail. It took a while. But with these types of flyers, we’re now averaging anywhere between 15 to 20 additional listings per year. The return on investment is still worth it.
Yes, it’s expensive. It’s more expensive than all the other types of marketing. But it works if you’re willing to be consistent with it.
The QR Code
So, what happens when they scan that QR code? It takes them to my Calendly page, where they can book a seller consultation, a discovery call, or a buyer consultation.
When they book the seller consultation, it will ask them specific questions about their property. And it’s linked with my calendar directly.
Sometimes I will literally wake up and look at my phone and see I’ve got a listing presentation that week. That’s pretty cool. And it’s all because of these flyers.
What I’ve noticed is that people believe these flyers don’t work anymore. But I’m calling bogus on that. This type of marketing does work—if you’re willing to do it consistently, have patience with it, and execute on the idea every single month.
