The letterbox drop can be a powerful marketing tool for real estate agents, provided it is used correctly. Real Estate Business’ Matthew Sullivan explains
Agents are increasingly taking advantage of social media such as Facebook, YouTube and Twitter to keep in touch with their client base, update information and raise their profiles. Buyers trawl real estate websites well before walking through the door of an agent’s office.
Surely, then, the days of the humble letterbox drop are numbered? Not necessarily. Rather, the range of marketing tools to which agents now have access has increased. Paper-based promotions have been joined by tweets from Twitter accounts, apps for iPhones and web and YouTube broadcasts. There are more ways than ever before for agents to get their name out there and to get their messages across.
Despite the flat property market, properties are selling and motivated vendors are always seeking the services of the best local agents. To stay one step ahead of the competition in what is a challenging property market, agents should maximise their exposure and highlight their achievements using every medium possible.
That includes both ‘old school’ paper-based models and the latest phone apps.
Welcome to the neighbourhood
Establishing a presence in the local market is Real Estate 101. Luton Properties, winner of the Telstra 2011 ACT Business of the Year Award, has built a presence in the group’s local market from the ground up. Luton Properties now claims to be Canberra’s largest independently-owned real estate group, with 80 staff across seven offices. Principal Richard Luton attributes the company’s success to tailored marketing campaigns, excellent communication and negotiation between vendors and buyers.
His marketing campaign incorporates letterbox drops, which he sees as a very effective strategy.
“We use them all the time,” he says. “Some of our agents have a program in place which sends information out monthly, and they seem to get great feedback from this. “We try to make [the letterbox flyer] a newsletter so it’s not classed as junk, but we still put a ‘call to action’ phrase in there to try and generate business. Brand saturation, however, is the most important aspect for us.”
Nigel O’Neil, chief executive of hockingstuart, one of Victoria’s leading franchise groups believes letterbox drops can generate a volume of business that stacks up well against that gained from personal referrals.
“While we do not have any data that supports the effectiveness of letterbox drops as a standalone marketing tool, we do have research that highlights that reputation, marketing tools and advertising style are important to potential vendors when choosing an agent,” Mr O’Neil says.
“Interestingly, they are almost equally weighted against criteria such as a good deal, price estimate, sales volume and property type. Importantly, they are ranked higher than a friend’s advice.”
Branding and presentation
Vendors and home buyers often attempt to gauge the level of professionalism and expertise of an agency based on their use of advertising and their marketing campaigns.
Therefore, agents who decide to use letterbox drops as a marketing strategy need to be sure the branding and presentation of the newsletter or flyer will get a sound response from the target market. In fact, according to Mr O’Neil, flyers and newsletters that lack the creative flair can do more harm than good.
“Marketing materials are a reflection on the brand,” he says. “A professionally produced and printed flyer will no doubt have more impact than a poorly produced flyer that’s been run off on the office’s black and white copier.”
With the branding and design taken care of, however, agents need to ask themselves what their key messages are and what they want to achieve?
What to include
There are two main reasons for using letterbox drops: to advertise an agency to the local market and to advertise the local market to potential clients. When planning the company’s latest letterbox drop, Mr Luton outlines what key messages he will include and how he wishes potential clients to respond.
“Including local market information is a great way to engage the reader,” he says. “When organising a newsletter, we will generally provide the latest auction results, properties that have sold in the area and any emerging trends that grab the attention.”
“We always provide the company’s email address and outline the locations of our nearest real estate office to get people coming through the door.”
When defining a key message, agents should provide a point of difference in order to separate themselves from the pack, Mr O’Neil adds.
“In many suburbs, home owners are inundated with countless letterbox drops from local real estate agents. If the agents in the area consistently produce high quality materials, the message of the flyer may be the only distinguishing factor between one agent and the next,” he says.
Achieving a point of difference in the marketplace can be as simple offering special incentives to the target market. Mr Luton suggests agents can create value and bolster their call back rating significantly by offering appraisals without obligations and other free incentives. Drops also work best when part of a broader marketing push:
“They should be considered as part of an office’s marketing mix, but should not dominate it,” Mr O’Neil says. “Other mediums should also be considered as part of a balanced marketing approach and might include the local newspaper, community sponsorship and email marketing.”
Other agents may opt to use letterbox drops as way to follow up a wider advertising campaign. Mr Luton aims to move the brand into television advertising in the near future, but will complement this with a Canberra-wide letterbox drop, done shortly after the commercial’s release.
What’s it all cost?
As with all marketing campaigns, it is important to weigh up the costs against the possible return. Blanket drops can cost tens of thousands of dollars and do not guarantee a higher rate of return. On average, the cost of print, design and distribution will set you back between $550 and $600 for 1,000 gloss A4 flyers.
There are, however, ways to effectively reduce these costs.
“Targeted drops to selected streets and areas within a suburb would be more cost effective and may provide better return on
investment,” Mr O’Neil says. “Achieving the maximum return on your investment should be front of mind for all agents.”