Residential Real Estate Direct Mail Planning Model

75%

25%

We may elect to produce two traffic-builder DM pieces: a single-fold mailer aimed at a broad geographic target, and a 12-page brochure aimed at upscale local or nearby homeowners.  How many should we mail of each piece?  What should each cost?   

1.  Budget.  We apply local historic traffic-to-sales conversion rates (C), and work backwards from target sales to target # Qualified Presentations.  We may assume the simpler piece will attract more non-qualified respondents and set Target Ups slightly higher.

Industry response rates for these types of mailers (often dramatically different) and available mailing lists dictate quantities.  We set an acceptable price per mailer, deduct fixed costs, such as postage and labels, then set creative & art, and printing budgets. 

Total Cost divided by Target Sales yields Target MCPS (Media Cost Per Sale), expressed at the bottom as a percentage of unit sales for each mailer, and for the campaign as a whole.
 
2. Creative Test.  If time permits, we'd produce and  test two or three versions of the simpler piece first (e.g. 5,000 units each), compare results to the model, and monitor all conversion rates.  We'd use the winning concept in the larger, more expensive piece, which can also serve as the take-home brochure.

This method of planning and testing can be applied to any medium (newspaper ads, radio, TV, web search, handouts) and to an entire multi-media campaign. Media support before and during mail drops can increase response.  Presentation skills, incentives, and the product itself will determine final closing ratios.