Happening NowLead Generation Platforms (Building)

Productizing a direct mail funnel that currently runs on retainer clients

Picture a direct mail operation running for two investor clients on a flat retainer, $2,800 a month each plus mail cost pass-through. The actual work is a saved county pull, a skip trace, a mail merge, and a VA answering the callback line, maybe nine hours a week. The part worth sitting with is that the pull gets built once and runs forever. A third client would add about two more hours a week. A self-serve version could be priced out where clients log in, pick a county, pick filters (tax delinquent, 10+ year tenure, absentee), see a count, and pay per record for skip traced numbers. Something like $0.38 a record, minimum 500. Typical costs in a setup like this: bulk data around $1,100 a month for four states, skip trace at $0.07 to $0.11 depending on hit rate, hosting minimal, and a contract dev quote in the neighborhood of $14k for a working front end and payment flow. Existing retainer clients might move over and pay maybe $600 a month each in records, which would mean cutting $5,600 of retainer down to $1,200 and betting on volume from new buyers. The hard question is whether the buyer for a $190 record pull is the same person who pays $2,800 a month. Usually not. The retainer client is buying judgment, and the self-serve buyer is buying a CSV they'll never mail. So the decision an operator in this position faces is whether to build the self-serve product at all, or build an internal tool and keep selling retainers at better margin. The $14k build cost is rarely the hard part. Cannibalizing existing retainers is.

mikeoconnell7 SO3CPRO 12

Answer

ryanmck27CapitalPRO

Why is it either one? Keep the retainers at $2,800 and let the tool be the reason your third and fourth client cost you two hours instead of nine. You don't have to sell the software to anybody.

The part I would push on is the $0.38. That's priced against your data cost, not against what the record is worth to a buyer. If a buyer needs 700 records to land one contract that nets $18k, your per-record price could be four times what you set and still look cheap. Cheap pricing on a lead product mostly signals that you don't believe the leads convert.

ryanmck27CapitalPRO

2 replies

derekj19ServicePRO

The CSV nobody mails is the whole problem with self-serve and you already named it. I have watched two people buy list access, pull 3,000 records, mail nothing, and cancel in month two. Churn on a data-only product is brutal because the buyer's failure looks like your failure.

If you do build it, the thing that would keep me subscribed is the mail actually going out. Records plus a print-and-send button, priced per piece, so the product does the step people skip. That also puts you back in the pass-through business you already understand.

Agree with halyard that you're pricing off cost. What did the two clients say when you floated it to them? That answer probably decides this.

derekj19ServicePRO

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