Marketing genius Ryan Smith joined us on the 7 Figure Flipping Podcast to talk about what changes you need to make to your seller marketing to get more leads (now and in 2023).
Based on the marketing shifts Ryan is seeing right now at the close of 2022, Ryan talks about the “source of distress” that he believes is about to increase significantly, the one list he recommends targeting before any others, and what you can use to connect with sellers and stand out from other marketing pieces they’re getting and much more.
Mass marketing and huge lists used to work, but now there is a bit of a disconnect between what sellers are attempting to sell properties for and what buyers are actually willing to pay for those properties. This creates what Ryan calls marketing compression. Marketing compression is when we have saturated a marketing channel or the competition is creating a higher-than-average number of leads that don’t convert to deals. We are currently in a bit of a waiting game as buyers make offers to sellers significantly lower than the asking price and sellers release their expectations of the market now that Covid inflation is over.
Now we are going to start seeing a trend toward financial distress. As the recession settles in, our advice is to look for distressed sellers. A way to find distressed sellers is to search pre-foreclosure Lists. Now, the likelihood is that people on these lists are being contacted by many different sources. You have the advantage if you get in front of them as soon as possible. This requires you to be proactive and get access to county records so you can reach out and start creating a relationship with these sellers before they hit overwhelm in an already stressful process.
What is the best way to contact your distressed sellers?
We personally have experienced direct mail working well in this scenario, but regardless of the method you choose, when you do start sending out marketing, distinguish yourself by getting creative and trying to add value to that seller’s life. In this scenario with the high amount of stress, often these distressed seller’s have checked out a bit. They have auction dates in pre-foreclosure, and they can actually delay thinking things are going to solve themselves. It is up to you to be proactive and let them know to do it differently and handle business before an auction, time will be needed to close a deal.
Empathy will get you the conversation.
If a house is in foreclosure the owner has a multitude of people reaching out from debtors to your direct REI competitors. To these people in distress, all the noise of people reaching out may be so overwhelming, that they have just started ignoring the majority of people reaching out attempting to contact them. In order to get their attention you have to do something different to break through all the noise.
Enter the conversation from the perspective of where your prospect's mind is. Understand that everyone goes through really challenging times and that is a fact of life. Something major changed in their lives and now they can’t afford the house. Treat them with respect and you will receive it in return. If you are genuine and here to solve the problem, that will be felt and responded to.
How Can I Relay Empathy in Direct Mail?
Can you relate to having a property foreclosed on in any way? Do you have a personal story of going through this yourself, had someone close to you going through it, or have you helped someone else through it?
Spend a little more money and create a letter with a personal story. Learn how to think from the place of ‘how do I relate emotionally to my prospect?’ If possible create the letter with a cursive font. You want it to feel personal in every way. Ryan Smith uses a copywriter Colin Dario’s method called The Viking Velociraptor.
Write your marketing letter using the 5 V’s:
Verify - something they’ve been through or feel and set up the story so you are relating to them.
Validate - how they feel about that thing you just told them.
Vantage - restate the first two V’s above and present your solution.
Villains - have a mutual enemy such as the bank, and establish an ‘us vs. them’
Values - state what common values you share and finish with a call to action.
What you end up with is a heartfelt message that elicits a response and is different from what everyone else is sending. Allow your empathy to carry through to the very end of the email as you consider in your call to action, what might be the most comfortable way for them to respond and give options such as the ability to reply via email or send a text. This can feel less daunting than picking up the phone for a direct call when dealing with high stress.
Regardless of what you send, they need to see it…so how can you ensure they open and read your marketing?
Creating Direct Mail That Will Get Opened.
‘The envelope's only job in this world is to get opened.’
The bottom line is this: you want your marketing, in this case, to look like one-to-one communication.
Here are a few ways to do that:
- If you have a mailing list and the addresses have 9-digit zip codes and use the first five.
- When it comes to the return address, don’t use the full company name, avoid logos, etc.
- Use a one-cent stamp in addition to the other stamp. What you would like is
- If you can hire someone, handwrite the address outside, and make it look imperfect.
- You can get into creative envelopes, invitation-size envelopes, or a manila-size envelope, folded over. Whatever makes someone curious and will get them to actually open it.
This is important! Really think about this aspect of your direct mail, because part of the distress of someone in this situation is getting unpleasant mail, and if they think your mail is something different they will feel excited to open it rather than tossing it in the trash.
Use nicer paper. If you send out a mailer on nicer paper, the difference between the paperweight will instantly make a difference. The heavier paper speaks to value, you spend more because you value them and your relationship with them. It’s worth it, trust us.
Yes, the market is changing. Yes, you will need to get more creative, more clever, and more proactive to both find deals and sell houses. We have complete faith in you and we are here to continue to give our best tips from the top investors in the industry to help you navigate the recession and maybe have your most successful year yet!