Real Estate Direct Mail Response Rates, and How to Improve Them

Real estate direct mail response rates average between 2% and 4%, according to multiple sources. So for basic planning and budgeting purposes, you could assume a 2% response rate for real estate letters and postcard mailings.

Granted, that’s just a ballpark figure based on industry trends. You won’t know your actual response rate until you start mailing (and tracking) your direct mail pieces. Still, it helps to have a general baseline in mind, for goal setting.

Let’s take a closer look at real estate direct mail response rates, and what you can do to beat the average.

Real Estate Direct Mail Response Rates

The Direct Marketing Association (DMA) has been tracking direct mail results for decades. Here are some interesting numbers from the 2015 DMA Response Rate Report. This was the latest data available at the time of publication:

• The average response rate across all industries was 3.7%, according to the DMA.
• The average cost per response was $19, which is lower than many other marketing channels.
• The best performing format was the oversized envelope, with an average response rate of 5%.
• The next best performing format was the postcard, with an average of 4.25%.

Here’s another interesting tidbit from the 2015 report. According to the DMA, direct mail response rates (for real estate and all other industries) outperformed all digital channels combined. In other words, letters and postcards typically do better than banner ads, pay-per-click, email, and other forms of digital marketing. Perhaps that’s why 82% of survey respondents said they would use the same amount of direct mail in 2016, or more, than they used in 2015. They know it works.

Creating Above-Average Letters and Postcards

Granted, not everyone will enjoy a 3.7% response rate with real estate direct mail. Some marketers get better results, while others fall below average. A lot has to do with how well you execute your campaign.

For example, let’s assume I send two postcards to the exact same list, one month apart. The first one is a “general introduction” postcard without a strong offer. The second postcard offers a free seminar for first-time home buyers, with an educational “take-home” packet. The second mailer would likely get a much higher response rate, simply because it has a stronger offer.

In other words: Your goal shouldn’t be to match the average response rate for real estate direct mail. Your goal should be to exceed it, by creating a better-than-average letter or postcard campaign.

Here’s how you might do that…

• Start growing your own mailing list. Response rates are generally higher for in-house lists, when compared to “prospect lists” purchased from data companies like infoUSA. You can still succeed with a purchased list. But you’ll probably get even better results if you grow your own list.
• Make sure you have a strong offer of some kind. You can offer all sorts of things, as long as the recipient sees value in it. A free seminar, an informative market report, an e-book, a free consultation … these are commonly used offers in real estate direct mail. Stronger offers generate better response rates. So ask yourself: What can you do to increase the perceived value of your offer?
• Use a highly targeted mailing list, instead of canvassing an entire area. For example, a listing agent who sells high-end homes should be targeting homeowners in affluent neighborhoods. An agent who is promoting a free seminar for first-time buyers might want to target apartment complexes with rent levels above a certain price point. Specific demographics like these allow you to create a highly focused and relevant message. This in turn can increase your real estate direct mail response rates.

Sending a strong offer to a highly targeted list is one of the best things you can do to improve your postcard or letter response rates. Those are the steps you must take if you want to beat the 3.7% average response for direct mail. You have to create an above-average campaign.

Need Help With Your Marketing Campaign?

If you need a custom letter or postcard message created, please let me know. I’ve been writing and testing real estate direct mail messages for over a decade. I can help you boost your response rates by using time-tested strategies. I also provide one-on-one consultation calls, if you just need some straight answers to your questions. Just email me to get started.