BMV Property Marketing

One of our clients owns a company that generates bmv leads with the intention of qualifying, packaging and selling these leads on to investors.

Without leads, she has no business, so her day to day activity was a frantic mix of random direct marketing activity. During our first chat, she gave the famous and now somewhat clichéd BMV marketing quote “we’ve tried leafleting and stuff but it didn’t really seem to work” At this point, her faith in basic grass roots marketing had clearly been lost, but this was merely down to not understanding the principles behind the golden number.

In below the line marketing (direct marketing using low profile media), there is always the principle of a golden number – i.e. you perform X actions Y times you get Z results. The Holy Grail is knowing your golden number for any particular marketing activity.

For example, if you print and distribute 10,000 leaflets for £700, you may receive 25 calls (new enquiries) in a week that came directly from seeing the leaflet. If you have an average conversion of 25 calls to 1 deal (removing deals that do not have enough equity, unrealistic asking prices etc) then your response rate is 0.25 % (25/10000) and your conversion rate is 0.01%.

If your average net profit after duties / fees / taxes per deal in that area is £25,000 then you can assume that this advert, generating 25 calls will make you £25,000

This simplistic example shows how it would work in an ideal world…but I’m sure we all know that this very rarely happens. Where disillusion begins to set in is if for example, you distribute 5000 leaflets rather than ten, or as it most often happens, print 10K but only distribute the first 5,000. Using the figures above, this would generate 12 calls but none of them ‘deal-worthy’ resulting in disappointment and often the disposal of the remaining 5,000 flyers.

There is no solution to getting to your golden number, but the two rules of ample time and a large enough sample will always help. Remember

• If leaflet dropping, research your sample area well. Avoid areas that have an abundance of student occupied or multi tenanted properties or large numbers of properties under £150K
• If using direct mail to a repossession list, use a sample large enough to get a realistic result – 50 - 100 is a good amount to start with to estimate a response.
• Don’t give up immediately - try to monitor your response over a period of at least 8 weeks.