In today’s short but highly invaluable episode, Tom sheds light on one very important aspect many wholesalers often get wrong—list management.
How do you manage your list?
Or do you even need to manage it to begin with?
In this episode, Tom will offer expert advice and guidance, show you the math, and answer other key questions related to list management such as:
- Do you need to micromanage your direct mail list?
- Would you lose money if you’ll manage your list?
- Or would you save money if you do it?
Don’t miss this episode. It just might provide the information you need to propel your wholesaling business to greater heights!
If you are Ready to Explode Your Wholesaling Business, Click here to Book a Free Strategy Session with me right now!
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Cody Hofhine: Good morning and I hope you are doing fantastically well today. In today’s short episode, Tom is going to be going over a very important thing in your wholesaling business that has to do with direct mail. And a lot of wholesalers are getting this dead wrong. I mean, just making huge mistakes when it comes to this part of their direct mail marketing. What is it that I’m talking about? Well, I’m talking about list management, as you could see from the title of this thing. Are you someone who is micromanaging your direct mail lists? Could you be losing a ton of money by not doing this? Could you be making a lot more money if you’re doing it? Should you be doing it at all? And if so, what is the best way to do it? Well, Tom’s going to answer all those questions today and I know you’re going to get a ton of value from this episode, so enjoy.
Oh, and before we get into this episode, we really want to take a minute and thank you for your loyal support in listening to this podcast. We are quickly approaching 1 million downloads on this podcast. 1 million downloads. Can you imagine that? We couldn’t have done it without you. So thank you. Thank you so much for being a faithful listener of this podcast. If you haven’t yet subscribed to our podcast because you can actually listen to the show without subscribing, please do so. Please subscribe to our podcast and take a minute out of your busy schedule to give us a rating and review. We have thousands of listeners from all over the country who have told us how much this podcast has helped them in their businesses, but I think we only have like, I don’t know, 225 reviews or something like that. So please, if you enjoy this podcast and have gotten some value from it, please take a minute out and subscribe if you’re not subscribed all ready, and just leave us a quick rating and review. It’s only going to take a minute and we really appreciate it. Okay, onto the episode.
Tom Krol: Hey guys, let’s have a conversation about list management, about all of these lists that you have that you’re sending direct mail to. If you are a wholesaler, wholesaling real estate, you’re wholesaling houses, let’s have a meat and potatoes, no fluff, no BS, straight to the point, actionable information that you can use right now to explode your wholesaling real estate business. So here we go.
First of all, what are lists? When you’re a wholesaler, wholesaling is the art of finding a discounted property. And when you are a wholesaler, what you’re looking for are discounted properties. These are the homeowners who want to sell quick for cash. And you have all of these lists of homeowners, whether they’re equity lists, or absentee owner list, or tax delinquent list, or code violation list, or whatever you have. And the question that comes up very often is how do you manage these lists?
So people will say, well, sometimes they’ll do a mailing and they’ll get their return mail and they’ll start to take a pencil and they’ll cross out the names or they’ll delete it from Excel, the people who are on the list who are not interested in selling their home. Or for some reason they want to take them off the list. The homeowner said, “Hey, I’m not interested in selling,” and hung up. So some wholesalers, especially new wholesalers, will start to manage the lists. This is not a good idea. I’m going to show it to you via math right now. Here we go.
Let’s just say that you do a big, big mailing. Let’s just say you get, for instance, 40,000 pieces. And in our tribe of wholesalers, we put it on an eight week cycle. So that would mean that you’re mailing 5,000. 5, 10, 20, so 5,000 pieces a week for eight weeks and then you repeat your cycle. Now one of the huge benefits of our tribe is that for your list, you only pay 3 cents a name, and you are only paying 32 cents for your mailing, which is a huge bonus for our tribe members and it’s awesome. But let’s just stick with those numbers. So we’re going to just say it is 32 cents for the mailing.
Let’s just say that you get 5,000 pieces of mail and you’re sending them out every single week. So every Monday or whatever day of the week… I know some people like Thursday, that’s fine too. So every single day of the week you’re sending out your mail. Now you’re not doing it. You have a VA doing it because you stink at ordinary tasks like that because you’re an entrepreneur. You’re a visionary. So somebody, one of your VAs is sending out a mail list of 5,000 pieces every single Thursday let’s just say.
Now the calls start to come in. You’re locking up deals. Revenue in first position. You’re finding discounted properties, you’re putting properties under contract, you’re buying them, or assigning them, or whatever you’re doing as your strategy. And you’re in your element, you’re making money, awesome. Some people, what they start to do is they want to save money and they want to do list management. So what they start to do is they start to manage these lists by eliminating the names of the people who do not want to be mailed or they don’t want to sell or whatever the case may be. Here’s my argument. Don’t do that. Let’s just run through the math.
Let’s just say that you send out 5,000 pieces and you get back a response rate of 1%. So let’s just say a 5,000… I have a calculator right here. So let’s just say a 5,000 pieces times 0.01 that is 50 calls. Which is pretty good. Some markets you’ll have 3% even more. Other markets, you’ll have 0.03% of a response rate, whatever that would be. So let’s just say it’s a 1% that’s 50 calls. Let’s also assume that of the 50 calls you have maybe one or two, what we would call warm or hot prospects. And then the majority are kind of somewhere in the middle. And then you have, let’s just say 20% that are, “Hey, take me off your list. Stop mailing me. I don’t want to sell. Leave me alone.” Whatever is. Let’s just say that that number is 20%. You could go higher or lower if you’re following along based on your own expectations or your own experience.
So let’s just say 20, I can tell you that’s probably 10, but let’s just do that anyway. It’s 10 phone calls. Now here is where the problem comes in. Let’s just say that you don’t do list management. If you’re paying 32 cents, you’re spending an extra times 0.32 $3.20 a week in mail that is probably going to go to the wrong person because they are not interested in selling. So you’re going to save about $3. If you’re doing much, much bigger numbers, a lot of people who are saying that, let’s just move it to $20 a week, right? Let’s just say it’s 20 right? Oh 20 wow. Okay. Now let’s say that somebody else is going to be doing this, hopefully. So now let’s just say that when you eliminate somebody or somebody else eliminates the name from your list, you do it to your full list of your 5,000 pieces, right?
And somebody eliminates a name, but they do it incorrectly. So now all of a sudden, all of the names like Mary homeowner or Sally Smith, is now because they deleted it wrong, incorrect. So now all of the names jumped down a comp. Now what happens is all of those names, you’ll be able to see are now going to be misaligned. Now you’re going to have a huge problem because on your next mailing, all of those names and addresses are not going to line up because the person who was fooling around with your Excel list messed it up.
Here is the bottom line. List management, in my opinion, I would it at all costs. It’s just not valuable time. The other thing too, I learned this from one of my mentors, about list management is your hourly income is not in alignment with that. So whether you’re doing it or somebody else is doing it, so you can take either your personal hourly income or how much money your company produces every hour. The time it takes, and the tedious nature of how specific that is to go into list and then start fooling around with them, it’s just not hourly worth it. So I would definitely avoid list management.
This is a question that comes up a lot in our tribe about what do we do with the return mail? What do we do with the people who say they’re not interested? Do we continue to mail them or take them off the list? In my opinion, I would suggest leave the list alone. The dollar amount that you’re saving by doing list management is really not worth it. And very often the people who are angry and ask to be removed, they couldn’t actually end up selling. Usually when they’re that angry over getting a postcard, there’s something else going on there. Sometimes not, but sometimes there is. So something to think about and hopefully this will help you save some time by avoiding this activity, this mundane, low level, not very big saving, high expensive resource task that can really just be avoided. So hopefully that answers the question and we will go from there. All right. Talk to you soon and have a great day. Bye-bye.