Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital
Your favorite Master Note Buyer – Straightforward, Honest, Fair…
It amazes me how often I am asked about marketing for notes. On a weekly basis I hear the same questions, what works best? What works in today’s market? What about direct mail? What about the internet? Etc, etc, etc. Marketing is the one task in the Note Business that takes up most of our time. If you’ve read my articles before, seen me speak about marketing for notes or heard about my marketing process then you already know that I believe you should have at least 3-5 lines in the water (marketing methods) working for you at any one point in time including BOTH online and offline methods. I want to be clear that with ANY marketing method not all marketing methods work for every individual. You will have to test them out for yourself to find out what works best for you.
Old School Marketing
I will make a bold statement about my favorite old-school direct marketing channel – snail mail is here to stay. I recently read a survey from the Direct Marketing Association talking about response rates finds that in many cases response rates for direct mail are more effective than buzzed-about digital (online) methods. When you add to that extremely targeted direct mail it is even better. However, the survey found that email and digital channels produce by far the better return on investment (keep in mind they were not talking about the note business but rather businesses in general).
The survey found that although general business direct-mail response rates may have dipped, they remain well above those for digital methods. Direct-mail response rates have decreased from 4.37% in 2003 to an average response rate of 3.40% today. That said, they have remained fairly stable since 2010, when the DMA’s last survey showed average rates of 3.42%.
Even though response rates haven’t risen, the report shows that general direct mail is 10 to 30 times more effective than email, and other digital methods have similar low rates. The report states, “For every 1,000 existing customers receiving a direct-mail piece, on average 34 will respond. For email, the average response is only about 0.12%. That means that only 1 customer out of 1,000 would follow the email solicitation through to sale.
The continued effectiveness of direct mail has a lot to do with the quality of data and the ability to target mail more effectively, as I have always taught. The future of direct mail for the note business lies in the quality of the note holders lists, but the quality of the response for direct mail also indicates that direct mail is not going to disappear. It’s not the situation we had with newspaper advertising where it just fell off a cliff. It’s probably stabilizing instead of continuing a steep decline.
Traditional tactics like direct mail and telephone marketing show the highest response rates, according to the report. Yet online channels attract a greater percentage of marketing dollars because they seem to generate a far better return on investment.
You are responsible for keeping track of your personal return on investment of your marketing efforts. The experts say that if you generate $3 for every $1 you spend on your marketing you are doing a great job marketing. There are many reasons that for whatever marketing methods you choose to test for yourself you must keep statistics and track your marketing efforts to find out your personal return.
Comparing the return-on-cost of direct mail with email (again for general businesses), the report stated that the cost is equivalent when they are talking about getting a new customer, but for a response from an existing customer, email is more efficient, with a return on investment that’s four times higher than direct mail! So that tells us that once we get a response from our direct mail we darn well better be following up with emails!
The report goes on to show that the return on investment factor is contributing to widespread use of email marketing. Eighty-three percent of the respondents in the survey use email in their promotional campaigns — it’s the highest usage level for the measured media. Direct mail followed with 79%, and was trailed by paid search, internet display and telephone.
New School Marketing
Taking a look at marketing from a different perspective – in the world of chaos, scams and lies, it is difficult for people to put a price on words. It is not that easy to trust and lay things on the line when it is guaranteed with just a bunch of promises and words on the internet. This is one of the roadblocks that most marketers in any business have to hurdle over. The anonymity of being online does not help at all, especially in the note business! As much as we try to create and go out of the box to try and draw people to use our cash flow services, the trust issue is still the biggest burden that we all have to figure out and overcome with online marketing.
Marketers are turning to blogs and social networking for the answers. It is the perfect place to introduce one’s self and eventually ease in the idea of network marketing or being affiliates and get residual income. You can post a lot of things online from photos and videos that showcase your personality. Unfortunately, these still carry the stigma of uncertainty and distrust. So what else is there to do?
I still believe the trust can be earned even in the chaotic and shady world of internet marketing. This is because the option to go out of the online world is always available. It might sound old fashioned or old school but if you think about it, this kind of marketing tactics have been around longer and have worked just as efficiently even without the frivolities of the internet.
Old school marketing works because a rapport is built face to face or voice to voice. It is done in meetings; conventions and even with random strangers on the streets. Approaching one might be a risk but often, those who receive flyers and see posters tend to go to a specific location not because of just the opportunity to use your services but also because they are curious.
So I am saying that you should incorporate traditional “olds school” marketing strategies and do not rely so much on the internet’s “new age” free and efficient draw. Yes, take advantage of the free software and begin to merge it into your marketing plan! Take advantage of the maximum coverage you can get from the internet and its new age sizzle. But, never forget that there’s a whole other world out there and your online marketing might not be enough to reel all the potential note holders. Sometimes (or even more often than that) old school can still kick the new age’s butt!
Whatever you do, remember, success demands action! Keep on marketing, and being persistent, it’s going to work! TWITA! (That’s What I’m Talking About!) J