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How to increase response rates with handwritten yellow letters
Can a simple yellow letter actually increase response rates by 5% to 15%?
Yellow Letters bring it home!... Really.
I wanted to publish the results of some research and real life testing that I did with these simple yellow letters. If you've read any of my other hubs you would know that I have a background in direct mail marketing, and more recently have developed an interest in the real estate investing market as well.
As a direct mail marketer, I am always on the lookout for an inexpensive way to get a good response rate on a mail piece. Over the years I've tried just about everything that you can think of... from mailing out in zippered money bags addressed with a sharpie, to mailing out follow up letters containing a crumpled ball of paper inside of an envelope with a note that says.."Why did you throw this away?"...(cute or annoying, it got opened).
Some direct mail methods can be very costly. With direct mail there is no guarantee of results, so every initial mailing campaign is a gamble. There is no true "auto-pilot" when it comes to generating sales leads... at least none that I know of. So having been in the direct mail business, I tend to watch for high response rate niches. The most recent niche that I've found to be ultra responsive, from a direct mail standpoint, is the real estate yellow letter mail piece.
As an up and coming real estate investor, I have spent a boat load of time researching ways to generate seller leads. I've tried the "we buy houses" ads and even bandit signs - which I'm not crazy about. I've tried craigslist, backpage, ebay classifieds, and pretty much every classified ad site that I could find. They all bring in leads eventually, but not a steady flow. When you're just getting started in any business, you want to try to generate leads for FREE if possible, or at least at very minimal cost.
As I researched real estate guru, after guru, I found that nearly all of them mentioned using yellow letters to generate real estate seller leads. Ok - it looked simple enough to me, but at 44 cents (now 45) in postage alone, it would have to bring in at least a 3% response rate to make it worth trying.... Well these guys (and you can google it for yourself) all were touting a 5% to 15% response rate... err uhhh, sure.
The only time that I ever saw a response rate average that hovered higher than 10% was in fundraising mailers that were mailing to a "warm" mailing list. So to fathom that these guys were able to mail to a cold list and get such high response rates brought out the skeptic in me.
I have used real handwriting on everything from the envelope to a handwritten "p.s." on the letter itself with very good results. But I had never ventured into using a fully handwritten mail piece, basically because it seemed to be cost prohibitive. My initial thought was that it would also take away from the professional approach needed to build trust with a prospective client. I guess in my mind, I never took it to that level because I just wasn't sure that it would work. A little is good, but a lot is too much... right?... Read on...
The proof is in the pudding...
My hand addressed mail service has really picked up over this past year or so, and is probably what actually piqued my interest in real estate investing in the first place. Many of my handwriting customers are real estate investors from all over the United States.
They were typically getting a solid 3% response rate on their mailings, which to me seemed good. The standard letter was a black and white laser letter with a "we buy houses" or "we buy commercial properties" type pitch. They were going out in hand addressed envelopes. I noticed that, for the most part, the orders were small, and far apart - the reason being, they were getting enough responses to keep their plates full. As much as I'd like for every customer to be a high volume, steady eddy, the most successful customers were scheduleing mail campaigns at lower volumes, although steady, a bit further apart. - That's ok though :-)
Finally, a yellow letter order...
As I said previously, I never pushed my customers to try out a fully handwritten mail piece in place of any business piece that they were mailing. I didn't personally feel confident that it would help. Finally, one of my steady mail customers ordered a yellow letter mailer. What is it? The actual piece (we edited the contact info) is pictured above. He had been mailing a black and white laser letter, inserted into a hand addressed envelope mailed with a 1st class stamp. His average response hovered around 3%, but he too had heard the buzz about yellow letters, watched a few webinars, and asked me if I could produce this mail piece for him.
We used a targeted mailing list, the same as he had been mailing previously - same envelope, same postage. The only variable was the change from a b/w laser letter to a handwritten yellow letter.
The actual results from this initial mail test are posted at GetItOpened.com. But in a nutshell, this guy saw his overall response rate more than quadruple (yes - over 12%). After he widdled his incoming leads down to "real leads", his end result gave him a 300% increase in response rates, just from changing from a standard business style letter, to a yellow letter. Keep in mind, he had already increased his response rates initially by more than double, simply by using a hand addressed envelope. So the two options combined, brought an overall response increase of more than 500%!
It's true. I saw it with my very own eyes, AND he contracted me to call all of his leads back, so i know that I know that I know... It worked!
Getting back down to earth..
I do agree, that real estate investor mail can average between 5% and 15% if you use a targeted mailing list, not a blanketed list. It also needs to be pointed out once again, that real estate investor leads are a "niche" market right now. I wouldn't project a 5% to 15% return on EVERY type of mail piece. Some markets are extremely tough - one in particular is the insurance market, of which I am well acquainted with.
With that being said, I want to point out why I am so excited about the prospect of using handwritten yellow letters, or for that matter, notebook paper, letterhead, stationary, or any personal type of writing paper. The overall response rate will vary by industry. The mailing list is a huge factor in any mailing, as well as the offer or product that you are pitching. My theory is that if you are using direct mail, with even a mild success rate, and have steady response rate results to use a comparison, then testing a handwritten mail piece may be a worthwhile test. Is it a gamble? All marketing is a gamble, but theories based on solid results are a "better" gamble... wouldn't you agree?
Remember, even with overall response rates aside, the real estate yellow letter test increased my customers response rate by 300%. So when doing a side by side mailing where the only variable was the actual letter - (not the list, not the product, not the envelope, not the postage) - the overall response rate tripled.
If a mailer is only getting a 3/4 percent response rate - it would be worth testing a personalized letter to see if you can bring that response up to 2 1/4% - That would be awesome!
I am currently testing fully handwritten letters in a few other industries, and so far the results are wonderful. I think that if you were to try this approach, it would be important to keep in mind why recipients of these mail pieces seem so responsive and word your letter carefully. The idea here is to let your prospective customers know that you are a person, not a nameless, faceless institution. A hand addressed envelope will be opened by nearly 100% of those that receive it - why? Because it's personal. When they open the mail piece, why disappoint them with a mail piece that completely clashes with the outer envelope? Instead, keep with the theme and make it personal.
I will continue testing the yellow letter method in other industries, and will be using them to generate my own real estate leads when looking for both buyers, and sellers.
There are several companies that offer yellow letter mail services - if you google "yellow letter mail" you will see quite a few. The prices range from less than $1 per piece, including postage and up. My own company does offer this service too. I'm not greedy though, there is plenty of business to go around, so do some comparative pricing, ask questions, request samples, and give it a try.
Thank you for reading, and I hope this article has answered any questions that you may have about yellow letter mail. If this is the first that you've heard of yellow letter mail, then I hope that you too decide to do some testing to see if it's worth adding to your marketing arsenal.
Tanya Johnson, aka "buythewayside"
You can reach me at my office number if you have any questions. 302-727-0339
p.s. I do appreciate your comments and feedback!
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