CS: Prospecting – How to Write a Prospecting Letter

The Clarity Series is a series of posts all on one subject.  This particular subject is prospecting.  While the context is commercial real estate, these steps and principles can be applied to any sales.  To read the introduction of this series, click here.  To read an overview of the entire prospecting system, click here.  Thank you for reading!

iStockPhoto

iStockPhoto

In the previous posts for this Clarity Series on Prospecting, I wrote about how I prospected on dollar stores in KY.  After choosing my geography and specialty, and then building my database, it was then time to start contacting people.  This post is a slight revision on a previous post I wrote titled The 3 Benefits of a Well Written Prospecting Letter.  It fits perfectly here.

In my next post, I will go over the anatomy of an effective cold call.  But I prefer to warm up that call.  Writing a letter is a fantastic way to do that.  Determine how many prospects you plan to cold call a week.  That is how many letters you send the week before.  Twenty was my number.  You can certainly do more.

Sending letters has had 4 different types of results for me:

  1. It hits the trash immediately.
  2. They see my name on the envelope before it hits the trash.
  3. It is opened and read. 
  4. It motivates the reader of the letter to call me first.

You have to assume that at least 50% of recipients are not going to read your letter.  They just won’t.  And that is fine.  All I’m trying to do is warm up my initial cold call.  When I call those who actually read it, my ratio for getting a meeting goes up.

On average, they would call me first about once a month.  70% of those calls turn into listings – that is our close rate when they call us from the letter.  That is a huge number for the cost of paper and a stamp.

I want to share 2 things in the remainder of this post:  why send a letter, and how to increase your open and read rate.

3 Reasons/Benefits to Sending a Prospecting Letter

  1. Letters warm up the cold call - This is obvious, but it works.  Not only do I have a higher success rate in getting meetings with those that read the letter, it gives me something to refer to right off the bat.  ”Hi Mr. Smith.  I’m Bo Barron and I’m calling to follow-up on the letter I sent you last week…”
  2. Letters force you to follow-up with a call - How is that, you say?  The letters force me to call because I tell them in the letter that I will be calling in about a week.  This is built-in accountability.  It gives you your first opportunity to follow through with integrity – or drop the ball.
  3. Letters force you to be intentional and systematic with your prospecting - This is a huge benefit for most.  To send out a certain amount of letters a week means you must have your database set up.  It means you are intentionally signing X number of letters a week.  It means that you are planning ahead.  It means that you are differentiating yourself from 95% of the rest of the brokerage community.

Now that I have covered why to send the letters, let’s discuss how to get more people to actually open and read the letter!

  • Handwrite the envelope - Studies show that more people open mail that is handwritten versus printed.  I generally had my assistant do it.  She has much better handwriting.  Once a week, 20 letters appeared on my desk.  I signed them and gave them back to her.  She addressed the letters and sent them.  She logged into my cloud-based CRM system and scheduled the cold calls to the recipients.  I made the calls.  Clockwork.  Simple.  Effective!
  • Write a scannable letter - This is a scannable blog post.  I utilize simple sentences.  Short paragraphs.  Lists.  Bullet-points.  A friend of mine runs a local Packages Plus business.  He was sharing with me that studies have been done on increasing the read rate of a letter.  The second most likely thing that is read in a letter is bullet points.  I will tell you the first in a second.  Use them.  That is where your most important information belongs – written in a benefit statement for the reader.
  • Keep the letter short - Anything longer than a page is way too long.  Three-quarters of a page is what I think is best. You have about 15 seconds of eye-ball time.  After that, you lose their attention to something else.  Short and simple works best.
  • Talk about them - Don’t send a letter all about you.  They don’t care.  They care about themselves.  Talk about what is happening that affects their property – their bottom line – their lives.  If you don’t do this, you are wasting your time.
  • Use a Postscript - That’s right – the P.S.  The postscript is the single most read thing in a letter.  Therefore, put the most important thing in the postscript.  I suggest to you that is where you tell them you will call them.  If they read nothing but the postscript, and you tell them you are going to call them, they are much more likely to then read the letter.

I have a couple more thoughts to leave you with.  First, systematize this process.  If you are prospecting on similar properties, there is a good chance that you can use the same basic letter over and over.  If not, take the time to customize the letter to the owner.  Your close rate going from call to meeting will go up.  Take the time.  It is worth it.

Second, delegate everything you can.  I initially wrote the letter.  My assistant would print out 20 a week.  She would lay them on my desk on Wednesday.  I would sign them and give them back to her.  She would then address the envelopes and send them.  Then she would log in to ClientLook and record who was sent a letter.  Finally, she would schedule my calls for the following Tuesday.

Note that all I did was initially write the letter and sign them each week.  Everything else was done by her.  When I show up on Tuesday, my call list is already waiting for me.  Delegate everything that anyone else can do so that you can focus on what only you can do.  Systematization at its finest!

Most of you will not do this.  Some because you are lazy.  Some because you don’t know where to start.  Some because you won’t pause long enough to build your database in the first place.

I challenge you to try this for 90 days.  I think you will be blown away with the results.

Let me hear from you.  Have you used prospecting letters before?  Did they work?  What would prevent you from doing it now?  Please share your comments!

Please note: I reserve the right to delete comments that are offensive or off-topic.

  • http://twitter.com/DCRetailBroker Jim Farrell

    Hey Bo…

    Some might call your approach of writing letters “old-school”. So much of business communication nowadays is done through e-mail. But I suspect it’s the uniqueness of this approach that gets you results. As I said above, SO MUCH email, and not enough time. Even if you could get a property owner’s email address, do you actually think they’d read a prospecting EMAIL when they already get tons of them??

    Nice post.

    • http://www.bobarron.com/ Bo Barron, CCIM

      It may be “old school.” I just like to call it effective. The key point is that it is easy, cheap, fast, and effective. It warms up calls that would otherwise be ice cold.

    • http://www.bobarron.com/ Bo Barron, CCIM

      And I agree with you, prospecting is about first connecting with the prospect, not really even communicating. Email is good for communicating, but not so much for actually connecting.

  • Infarction

    One problem that I am having in building my database is that after researching the property owner in a Google search, I find the phone numbers are out of date. Is there a source that offers current phone numbers for small, boutique owners of commercial real estate?

    • http://www.bobarron.com/ Bo Barron, CCIM

      You are not going to get every number. Whitepages.com can help. Or the phone book. My dollar store database probably had 70% phone numbers. Don’t let that stop you from moving forward with the numbers you do have.

    • Rose

      you can go to prospect NOW

      • http://www.bobarron.com/ Bo Barron, CCIM

        Depending on your market, ProspectNow.com is a great solution. And they are really nice people to work with.

        • Infarction

          What a great website–both yours and ProspectNow.com!! Thanks.

          • http://www.bobarron.com/ Bo Barron, CCIM

            Thank you very much!

  • John Moore

    Bo, a good addition to the envelope and way to help increase the open rate is something with shape. For example, you might put a blank key in an envelope and explain you are the key to their next property. Corny I know, but when they feel
    something of shape or hard it will intrigue. I bet it will double your open rate. Good luck!

    • http://www.bobarron.com/ Bo Barron, CCIM

      I like that idea – at least the part about giving the envelope something in it that raises the curiosity of the prospect. I wonder what other ideas besides the key we could come up with? What do you think?

      • http://www.facebook.com/laura.vedder1 Laura Vedder

        I had a meeting yesterday with a guy that sells promotional items. He had different ideas for different letters. For a 25-person mailing I want to do to send to some major prospects, he suggested sending a mini-flashlight with a letter that says “Let me enlighten you…” He used something like that recently and got 9 appointments from the initial 25 mailings. That would be a huge improvement for me.
        For my typical letter I don’t send anything with it, but I’ve had some good response. I’ve gotten a number of clients who’ve called me to discuss their looming lease expiration (I’m a tenant-rep broker), and a number that have saved the letter and my card and called me up to one year later when they needed me!

  • http://twitter.com/bforresttnl Barry R Forrest Sr

    Great stuff! I am putting together a letter campaign right now for
    Dollar stores in my area. Have been thinking about how to draft the
    letter and saw your post. What a great head start. Much thanks.

    • http://www.bobarron.com/ Bo Barron, CCIM

      Awesome – I would expect that you will have similar results that I did. Maybe once a week you will get a call from the letter before you can even follow up. Good luck!

  • Rose

    Do you have a letter that you use that has worked? Please send to rose@1stvalley.com you can blank out the names , just need the content.Thanks

    • http://www.bobarron.com/ Bo Barron, CCIM

      Rose – there isn’t anything magical about my letter. I just used the tactics in this post. It was about benefits to the prospect. It gave them some information of value. It barely mentioned me. And I told them I would call them in a week. Demonstrate that you know something about their property.

      As I’m going talk about in then next step dealing with cold-calls, I don’t believe in scripts. I do believe in preparation.

  • Ken Rhinehart

    Great stuff, Bo. I also am wondering about the actual content of the letter.

    • http://www.bobarron.com/ Bo Barron, CCIM

      Ken – maybe I’ll do a follow up post that deals with more of the content of the letter, but the letter will be entirely different depending on your specialty. All my letters were the same because a Dollar store is a Dollar store. You want to demonstrate in the letter that you know something about the property.

  • bob

    A trick I used to use when I prospected for leasing listings in shopping centers was to take a picture of the vacant space and print it out on the outside of the envelope with a by line that I could help to fill their vacancies. It addressed an obvious need and showed that I had actually been to the property recently. The owner almost always would take the phone call. I still hand addressed the envelope. Every owner likes to see a picture of their building.

    • http://www.bobarron.com/ Bo Barron, CCIM

      Bob – that is a brilliant idea. We were just commenting about that in our company group on LinkedIn. Thanks so much for bringing that up!

  • http://twitter.com/MassimoGroup Rod Santomassimo

    Gee, Bo, I think you hit a hot topic! Prospecting letters are a terrific tool in today’s market. Stop relying on email – email is NOT a prospecting tool, it’s a presence tool. Both are critical, but ultimately you have to ASK FOR THE BUSINESS.

    • http://www.bobarron.com/ Bo Barron, CCIM

      I couldn’t agree more! Email is not prospecting. It is either annoying or it is building presence. Gee??

  • http://twitter.com/AntonBurman Anton Burman

    Great tips! I work with people that do not use prospecting letters as much as they should but I know when I start brokering that I will be trying to get my name out there as much as possible. This is a good way.

    • http://www.bobarron.com/ Bo Barron, CCIM

      Anton, be careful not to confuse sending prospecting letters with using mail to create market presence. You can use the mail to do both, but what we are talking about here is using a letter to specifically warm up a cold call. An ancillary benefit is that you will raise your presence, but that is not the purpose. Happy hunting!

      • Anton Burman

        Thanks for the advice!

  • Tony

    http://www.argali.com/

    This service searches multiple directories The found listings are combined, formatted in a uniform way and displayed as if they came from one integrated metadirectory. It is a subscription service but will allow 10 searches per month at no charge.

  • glen

    Ok Bo, you are a Dollar Store expert and I’ve done some work with them. Since the tenant is usually the one who pays the real estate tax, at least in my state, the tenant’s contact information is on the assessor’s records. Short of asking a title company for a copy of the dead, how do you assemble all of the real estate owner’s information? It think that the title company would get pretty tired of hearing from you every day!!

    • http://www.bobarron.com/ Bo Barron, CCIM

      Glen – in KY, it is easy to find the owner of record. It is public record. If it is an LLC, then you can get on the Secretary of State website and find out who the members are.

  • glen

    Bo – you answered my comment with regard to KY where you evidently reside, but in AZ the only information that the assessor has is the name of ‘who pays the taxes’ rather than who owns the property. So your solution doesn’t work for me!

    • http://twitter.com/covenant_cre Cory Spanko

      Glen, check out the GIS maps at maricopa.gov/assessor to get property owner info. If it lists the owner as an LLC, you can got to the Az Corporation Commission website and get LLC members info.

      • glen

        Cory – Yes, I understand how to do that, however up here in the ‘sticks’ of Yavapai County, the assessor’s office shows the entity that pays the real estate taxes, which is usually the tenant, as the owner of the property rather than the actual owner as all the gummint cares about is collecting those taxes!

        • http://www.bobarron.com/ Bo Barron, CCIM

          Glen – that is definitely a challenge. I think would I would do in that case is compile a list of all the properties that you need information about, and then start taking your favorite title company person to lunch. It sounds like they would hold the keys to the information that you need. View them as a key resource and develop the relationship. Be willing to promote them to your clients, etc. so that it is a mutually beneficial relationship. My guess is that you do this already.

  • Pingback: The 8 Steps to a Killer Prospecting System | theBarronBlog

  • http://www.salesproblog.com/ Johnny Bravo

    Loving this serious so far Bo. Keep it up. Looking forward to things to come.

  • http://www.facebook.com/marias.love.7 Ken Randall

    We are in the process of launching software to help with Property Prospecting in the UK and are considering launching in other countries too. Please see http://www.propertymole.net. We would be very interesting in hearing your views. A demo will be available shortly.

  • Pingback: CS: Prospecting - The Winning Presentation | theBarronBlog

  • Pingback: The Conclusion of the Clarity Series on Prospecting | theBarronBlog

  • Pingback: Commercial Real Estate- Essential Laws of Prospecting and Cold Calling | Commercial Real Estate Law

  • http://www.GiglioCRE.com Carmine

    Hi Bo, I’m new to Real Estate and I jumped right into commercial. I know you mentioned that we should follow up with a call but the problem I’m running into is when trying to find the phone
    numbers for the property owners of residential apartments. I look in the town’s database, go to the Secretary of State, and then try to research their number that way. If I get it then great, no problem, but when I can’t find their phone number how should I write the letter?

    PS: I love this series you wrote and plan on reading your other work.