Building The Perfect Marketing Pyramid to Maximize Deal Flow

Mike DeHaan: [0:01] Welcome to the collecting keys Friday focus. What is going on, guys? On this episode of the Friday focus, you are joined by me, Mike DeHaan, the host of the Collective Keys Real Estate Investing Podcast. And I am running the Focus episode today, which is our Friday episode where we usually do a deep dive into something that is like a listener question or something that's been on our mind or something that's just related to business that people have kind of been inquiring about in general. And on this episode today, I'm going to dive into how to build a marketing pyramid. I am calling it the optimized direct to seller marketing pyramid here. I need a better name than that. If you have an idea, you can let me know what you think. But basically, building out that full marketing structure to really maximize your potential lead and deal flow as you are starting to build out your real estate investing business. And I call this a pyramid because there's basically like the different types of marketing that you can do. They all have different categories from how I view them, and you need basically all of these to build the most successful marketing system and brand that you can. But really, they have different use cases and specialties in terms of, you know, the number of people that you reach with them, the cost to operate them, how exactly you can control them, and all that sort of stuff. So I call it a pyramid because basically, there is the most targeted stuff at the top, which you wanna be very specific, which can get you your most deals, but is going to miss out on opportunities because it's so targeted all the way down to what I call the hopeful marketing channels, which are ones that are extremely wide. They are a very low cost per impression on people, but they are going to be a lot more speculative in what you could do. So anyway, it's kinda three tiers to pyramid, so I'm gonna dive into them.

Mike DeHaan: [1:59] So first off, when people are starting out their business, especially when they are cost sensitive, I always suggest that they start with some form of targeted marketing. So if you're looking at the pyramid, this would be the very, very top. You're going to be able to reach the least number of people for this. It is going to be the most expensive cost per lead, but you're going to be targeting people that you know have some sort of reason to sell to you. So this targeted marketing is things like direct mail, k, driving for dollars, going to the county and pulling like very specific lists that require you to go and like have phone calls and know, get all this stuff that, like, requires some extra steps as as opposed to just pulling off of, like, pulling off a data providing service. These things that are going to take you the extra mile to kinda, like, get in front of people can be more expensive to do, but you're going to be talking to people that you know at some level have some sort of motivation. So, you know, typically things you're looking for, people have bankruptcies, liens, all that sort of stuff. So that's publicly available, but you wanna be reaching out to them directly as intentionally as you can. Right? So usually with these, they are expensive to sort of start up, whether that's in time, such as driving for dollars or going and getting sort of like more behind the scenes lists, or they're expensive just to do your outreach, such as direct mail, which typically tends to be the most expensive cost per touch of any of the marketing types that you can do.

Mike DeHaan: [3:29] But they are great because they are typically the highest quality of leads, and from our experience, these types of leads account for about 78% of our deals. In the several 100 that we've done over the past couple years. About 78% of them have come from direct mail or driving for dollars. So I always recommend people get started this way, even it is more expensive per touch just because your chance of success is significantly higher. A lot of people will get drawn towards the bottom of the pyramid because it's cheaper per touch. It feels like it's progress. You're talking to more people and it's costing you less money. But if you're not getting deals, which are the point? I would rather talk to five people and get a deal than talk to 100 people and get one deal. Right? So it comes down to what's the best value for your time. So at the very top, we have the targeted marketing, and this is usually I recommend people start. Once you have the systems for your targeted marketing figure out, you move on to the second layer of the pyramid, which I call the speculative marketing. And so these will use the same sort of list that you got with the targeted marketing up top, but you're going to expand it out even wider to the people that have less potential motivations to wanna sell to you, but potentially still something. Right?

Mike DeHaan: [4:45] So when you're doing this speculative marketing, these are things that are cheaper per touch. So I look at these as being like the SMS blast that people do. These can be cold calling with a dialer, you know, stuff where you're going to be just reaching out to a ton of people and kinda just fishing, right, to see what comes back. And with these, you're going to be targeting absentee owners, so landlords, senior owners, people that have owned their house for a very long time, might be getting into a phase where they're ready to retire and move out of their house, but don't wanna fix it up. People with extremely high equity in the property, people that inherited their property, you know, these ones that aren't necessarily going to have a concrete motivation, but it's possible that they do. And you're gonna, you know, you don't mind, you don't necessarily wanna be reaching out to them to a point where it costs you a few $100 to be able to talk to them like it does the direct mail lead, but also to you wanna make sure that you're getting in front of them in some capacity, so that way they're at least in your sphere of influence. Right? They are at least getting reached out to you in some way. So I like these to be a great supplement to the top of the pyramid. A lot of people will start here, and I think that when people do, they tend to spend a ton of time not making any progress, but doing a hell of a lot of work because you will get a lot of lead generation, but your lead generation will generally be pretty low.

Mike DeHaan: [6:05] They tend to be colder, and have to go through more of a sales process. We found that these middle of the pyramid speculative leads versus our targeted leads at the top, typically take three to four times as long to close as the as the top ones. Right? So just something to keep in mind. But either way, this is still very, very important because it will get you more lead generation, and also too, when you have a team and you have people that are working the leads, it gives them things to continue working towards when sometimes with the direct mail, it can be a little bit more up and down in terms of the flow. And if you have people that are working these 100% full time on your team, they're gonna be able to carve some good deals out of it. So you definitely wanna make sure it's a part of your repertoire. Alright. Lastly, at the bottom of the pyramid, I have what is called the hopeful marketing channels. And I call these the hopeful marketing channels because they are ones that you kind of set up, and you hope that people are exposed to them. You don't have any direct knowledge about who is seeing them. You know, you can kinda figure out how many people are seeing them with some of the different ways that you can you can track stuff, but ultimately, it's not targeted at all, and you're kinda just putting your brand and your services out there. So these are things like online ads, social media ads, Google pay per click ads, TV ads, radio advertisements, billboards, you know, kinda just like the mass, mass marketing stuff that ton of people will probably see, but you have no control over whether or not they are the correct fit for you. And these are typically the last thing that I recommend people add into their their business marketing pyramid, just because you have no control of it, and they can be very expensive, especially some of the media related stuff that requires you to, you know, sign a long term contract or those sort of things. I think people get drawn to these because they seem like they're niche, they seem like they're glamorous.

Mike DeHaan: [7:59] You don't hear about a ton of people doing them unless they're pretty big companies. The reason that you don't is because they are expensive to run and they are hard to fully keep keep tabs on how successful they're being. Right? I mean, I've known people here locally that, I mean, even still spend $5,060,000 dollars a year on TV, and they'll hopefully get like a, you know, three or four deals off of it. That's fine. But like that's hard to to fully track and justify that. I think the more important way to view these hopeful marketing channels, instead of it being like a lead generation source, it is more of a brand growth and a brand awareness source. Right? So you wanna pair this with your targeted marketing and your speculative marketing, I was hoping marketing out there. So when someone receives a letter from you, and then they just happen to also see you on TV, happen to also pass by your billboard on the way home from work, happen to also see your online ad, it gives you extra credibility and it makes your targeted and speculative marketing more effective. Right? So this last channel is one that, you know, I said, a lot of people don't do. They don't really delve into that. They will just focus on the target effective, which I think is fine. But I do think that having this hopeful marketing at the bottom will make you much more credible to the sellers.

Mike DeHaan: [9:17] Right? It will give you a much higher chance of success. And then, you know, people like always ask us, what makes us more competitive with all the direct mail and other things that we send out on a regular basis. And honestly, it's we're not doing anything special with the mail. It is literally just because we are following up with these other forms of hopeful marketing to build that brand awareness. So it's a really important base to your pyramid to really establish that establish yourself with the rest of your marketing channel that you have above. So anyways, guys, ultimately, when it comes to marketing, there is no absolute right or wrong way to do it. I do think you just need to look at it from a holistic picture, and you know, making sure that whatever you do, decide to do, you you commit to it for an extended period of time. We always tell people on our instant investor program, expect to commit to whatever you're gonna do for at least three to four months. That way, you have a track record month by month, that you can see if it's working, if it's not, if there's any sort of improvement, if it's a decline, if you go in and you like do direct mail for one month, you do cold calling for one month, you threw up some Facebook ads or one month, you're never gonna get anything done if you do that.

Mike DeHaan: [10:25] So it's very, very important to pick a type of marketing, focus on it, become really good at it, and then add on the next one. And if I was going to suggest how you do it, and this is how we coach this as well, Start with the targeted marketing, start with a direct mail, it's the most passive, it's gonna get you the highest quality leads. Once that's rocking, add in the speculative marketing, hire an SMS company, hire a cold calling company, bring on a VA, do all those sort of things to start to really build your pipeline and get some more robust deal flow. And then finally, once that's going, lean into the hopeful marketing, get your online ads rocking, you know, start making radio ads, that's something that you want to do, and really start to cement that brand. And going through that phase, it will be the easiest to manage your budget, make sure that you understand the opportunities that are coming through and how to take them down with your sales process, and ultimately have a very successful business that has some longevity to it because you built that foundation the correct way. Anyways, guys, I would love to hear your take on any of these different marketing channels. I'd love to hear what you're doing too if I miss something. So feel free to hit me up on Instagram at mike underscore invest, and let me know. If you have a really unique way of marketing, I just love to hear what people are doing. People come up with some pretty creative stuff these days.

Mike DeHaan: [11:39] And it's a fun business because it gives you the ability to try things at relatively low risk. And there really isn't like the absolute way that this business needs to be run. It is generally free form, the cost of entry, barrier to entry is relatively low. And people are creative, they can get deals in some really unique ways. So if you're doing something like that, I'd love to hear about it. So yeah, hit me up on Instagram, Mike underscore invest, send me a DM. I'd love to hear what you're doing. Besides that, please share this show with anyone that you know that might be interested in real estate investing, or, you know, sharing about different marketing tactics, because this does also apply to different kinds of businesses as well. But, yeah, thanks for listening, everybody. Talk to you all next week. Thanks for listening to this collecting keys Friday focus. Be sure to subscribe wherever you listen to your podcasts.