From the desk:Cold Calling / SMS Lead Generation

SMS keeps beating mail on cost per contract. That looks too good.

Building a channel comparison for an acquisitions budget and the SMS column looks too good, which usually means I've left something out.

Mail: 10,000 pieces at $0.62 all in, so $6,200. Response 0.9 percent, 90 calls in. 14 percent of those become a real conversation with a seller who'll talk price, so 12 or 13. Contract rate 1 in 8. Call it 1.6 contracts. About $3,900 a contract.

SMS via a vendor: 10,000 records skip traced at $0.09, so $900. Vendor charges $0.035 a message plus a platform fee, and their historical average is 2.8 messages per record before they stop, so about $980 plus $600 platform. Total roughly $2,480. They report 6 percent response, 600 responses, but 70 percent of those are wrong number or hostile. So 180 usable. Their reported contract rate is 1 in 22, giving 8 contracts and $310 a contract.

That spread is a factor of twelve, and nothing in real estate is a factor of twelve. Places I suspect the leak: carrier filtering means delivered volume is well under sent volume and I'm being quoted on sent, the 1 in 22 is their best client rather than a median, and the labor to work 180 usable responses inside an hour of arrival is not in either column. I'm also aware that texting consent and outbound rules are the live regulatory question here and any adverse change hits this column and not the mail column.

Decision on my desk this week: whether to fund a 90 day SMS test at $7,500 against a mail program I already know the numbers for.

Answer

3brandonlee36Passive

Delivered versus sent is the whole thing. Ask the vendor for delivery receipts by day, not an average, and ask what percentage of their sends were filtered by carriers in the last 60 days. When I ran a small text program the number moved from 88 percent delivered to 41 percent inside three weeks with no change on my end, and nobody told me until I asked. Your $0.035 is per sent message, so a filtering event doesn't lower your cost, it just lowers your output.

The other omission is the response window. 180 usable responses arriving in a 4 hour blast needs somebody sitting there. If that's a person at $22 an hour for two days, add it in and your $310 becomes something more honest.

2 replies

2gregpowell66AG4BPRO8

Your mail contract rate and your SMS contract rate came from different places, one is yours and one is theirs. That alone can explain most of the twelve. I'd run the test but only fund 30 days, and make the deliverable delivery receipts plus recordings, with the contract count as secondary. You're buying information about the channel this quarter, not contracts.