Best Use of Marketing Dollars

I was just curious to everyone’s thoughts on this issue.

I have a certain dollar amount for marketing each month. I have been doing yellow letters among other things and have been getting good responses. Part of my mailing campaign is to vacant houses that I come across when I am working in my targeted neighborhoods. I do the research on these vacant houses and often times the letters I mail are to absentee owners. Sometimes, as I’m sure most of you know, the letters will be returned without a fowarding address. In this case, I will do additional research to see if there is a recent foreclosure or taxes are being paid by a servicer. In the case where there are no recent foreclosures and the owner is the most current payor of taxes but can’t be located by conventional means I generally hire a skip trace service. This has worked successfully in the past and generally costs about $20 per lead.

So here is my question… I have about 20 of these returned letters where all indications point to an owner who simply can’t be found by researching the deed or tax records. So do I spend the $400 it will take to skip trace each lead or keep that $400 in the pool I would normally use towards new mailings? Should I just skip trace 2 or 3 a month so that it doesn’t take too much away from my monthly marketing budget? Unfortunately I am still starting out and am unable to dedicate additional funds to researching the leads without taking away from my monthly marketing budget.

Any thoughts are greatly appreciated!


You have stated that your marketing has been working pretty well. I would think the answer to your question is in the data.

  1. I am assuming you track what you spend, how you spend it and what the response rate is.
  2. If you are breaking down the data you should be able to see the response rate for each stage of the process (yellow letters, etc).
  3. Have you been working on the marketing long enough to know how many deals you secure? Do you know what the profitability has been per deal and in total?

Spending $400 sounds like a big number. It is nothing if 50% of the 20 convert into deals. From that Point Of View (POV) it would be obvious to spend the money.

Flip it around a bit. If the data is solid and you know your numbers, then I would think you can attract an investor to fund the $400. They put up the cash and they get a large return. If the numbers are really solid and clear it is a winner, an investor will be interested. If giving away a large amount of profit feels wrong, you actually know you should do the deal with your own money.

Looking at this another way…

If you were really asking if you should spend $400 on the 20 vs. spend the money on some other type of marketing that performs better, then you are back to limited funds and two or more good choices. Pick the option that provides the quickest profit so have more money to re-invest in marketing. The 20 are likely not going to go stale so you could delay them if you like. Or just get an outside investor to fund everything.