Database Marketing: 12 Direct, 8x8, and 33 Touch

Chapter 3: Database Marketing: 12 Direct, 8x8, and 33 Touch

This chapter focuses on systematizing your marketing efforts towards your database using three key programs: 12 Direct, 8x8, and 33 Touch. These systems provide structured approaches to nurturing leads and building relationships, ultimately driving lead generation and conversions. This chapter provides a scientific background and practical approach to implementing these systems.

3.1 The Importance of Systematic Database Marketing

Real estate success hinges on consistent and targeted communication. Given the scale of potential contacts and the diverse needs within a database, a systematic approach is crucial. These systems enable targeted messaging and consistent follow-up, maximizing the effectiveness of your marketing investments.

3.1.1 The Power of Frequency and Consistency

The core concept behind all three systems (12 Direct, 8x8, and 33 Touch) rests on the principle of mere-exposure effect, a well-established psychological phenomenon. This effect, also known as the familiarity principle, states that people tend to develop a preference for things merely because they are familiar with them. Repeated exposure increases familiarity, which, in turn, increases liking and trust.

• Mere-Exposure Effect Equation:

  Let:
  * L = Level of liking/trust.
  * E = Frequency of exposure.
  * k = A constant representing the initial level of liking (influenced by factors like the first impression).

  Then, L = k + f(E), where f(E) is a monotonically increasing function (up to a saturation point) demonstrating that liking increases with exposure frequency.

3.1.2 The Need for Segmentation

Effective database marketing requires segmentation. Not all contacts are equal. “Mets” (those you’ve already met) require a different approach than “Haven’t Mets” (those who are unfamiliar with you). Segmentation allows tailoring messages to specific groups, increasing relevance and engagement.

• Segmentation Criteria Examples:
  • Demographics (age, income, location)
  • Psychographics (values, lifestyle, interests)
  • Transaction History (past clients, leads)
  • Engagement Level (email open rates, website visits)

3.2 12 Direct: Targeting the “Haven’t Mets”

The “12 Direct” program is a systematized approach to engaging the “Haven’t Met” portion of your database, primarily through direct mail. It involves sending out twelve direct mail marketing pieces annually, typically one per month. This is a leveraged approach designed to reach a large audience efficiently.

3.2.1 Scientific Rationale:

12 Direct is based on the idea of building brand awareness and establishing top-of-mind awareness within a target geographic farm or demographic group. Consistent exposure, even without immediate interaction, increases familiarity and positions you as a local expert.

3.2.2 Implementing 12 Direct:

1. Defining Your Target Group: Identify your ideal demographic or geographic farm.
2. Acquiring a Mailing List: Purchase or compile a list of names and addresses. Verify accuracy and compliance with privacy regulations.
3. Developing a 12-Month Content Calendar: Plan your twelve mailings in advance. Themes should be relevant to the target audience and showcase your expertise. Examples:
   • Market updates
   • Seasonal home maintenance tips
   • Community events calendar
   • Success stories/client testimonials
   • Neighborhood comparisons
4. Designing Compelling Marketing Pieces: Create visually appealing and informative materials. Include a clear call to action.
5. Outsourcing Production and Distribution: Consider outsourcing printing and mailing to save time and resources.
6. Tracking and Measuring Results: Monitor response rates, website traffic, and lead generation. Use unique tracking codes or landing pages to attribute leads to specific mailings.

3.2.3 Statistical Considerations:

The document mentions a 50:1 ratio – for every 50 “Haven’t Met” people marketed to twelve times a year, you can expect to generate one sale. This is an empirical observation.

• Example: To achieve 50 closed sales annually, you need a database of 2,500 people (50 sales * 50 people/sale = 2,500 people).

  This ratio is highly dependent on:
  * Market conditions: A hot market might yield a better ratio.
  * Content quality: Compelling and relevant content will improve response rates.
  * Target audience: A well-targeted audience will generate higher quality leads.
  * Follow-up: Although it is designed for “Haven’t Mets”, it can trigger responses that need follow up.

  Conversion Rate Calculation:

  Let:
  * S = Number of sales.
  * N = Number of people in the “Haven’t Met” database.
  * T = Number of touches (12 in this case).
  * CR = Conversion rate

  Then, CR = S / (N * T). In the example above, CR = 1 / (50 * 12) = 0.00167 (or 0.167%).

3.2.4 Experimentation:

A/B testing can optimize the 12 Direct program.

• Example: Split your mailing list into two groups. Send different marketing pieces to each group and track which performs better in terms of response rates and lead generation.

3.3 8x8: Jump-Starting Relationships

The “8x8” program is an intensive, eight-week campaign designed to quickly build relationships with new leads and move them into your sphere of influence. It combines multiple communication channels to create a strong and lasting impression.

3.3.1 Scientific Rationale:

The 8x8 program leverages the principles of multi-channel marketing and reciprocity. By engaging prospects through multiple channels (mail, phone, email), you increase the likelihood of reaching them and capturing their attention. The initial “touches” also create a sense of reciprocity, making recipients more receptive to your future communication.

3.3.2 Implementing 8x8:

1. Identify Your Target Group: New leads, past clients, or anyone who needs a relationship “jump-start.”
2. Develop an 8-Week Communication Plan: Create a detailed schedule of activities for each week. Examples (as per the document):
   • Week 1: Introduction letter, brochure, market report, business card.
   • Week 2 & 3: Postcard, inspirational card, community calendar, market statistics.
   • Week 4 & 8: Telephone call to follow up on previous mailings and identify potential needs.
   • Week 5: Send a free report.
   • Week 6: Real estate investment or house maintenance tip.
   • Week 7: Refrigerator magnet, notepad, or other useful giveaway.
3. Personalization: Personalize each communication as much as possible. Reference specific details about the recipient or their property.
4. Call to Action: Every touch should include a clear call to action, such as visiting your website, scheduling a consultation, or referring a friend.
5. Referral Reminder: Actively solicit referrals in every communication.

3.3.3 Measuring Success:

Track key metrics to evaluate the effectiveness of the 8x8 program.

• Key Performance Indicators (KPIs):
  • Call connection rate
  • Number of appointments scheduled
  • Lead conversion rate
  • Referral rate
  • Website traffic from direct mail
  • Email open and click-through rates

3.3.4 Psychological Application:

The calls include the phrase, “Did I catch you at a bad time?” This acknowledges the recipient’s time and subtly seeks permission to continue, a technique based on respect and psychological framing.

3.4 33 Touch: Consistent Nurturing

(This section builds upon 12 Direct and 8x8, though details for this part are not present in the provided document. It is assumed it follows the same logical patterns.)

The “33 Touch” program is a long-term, ongoing system for nurturing relationships with your “Met” database. It involves consistent communication throughout the year, designed to maintain top-of-mind awareness and generate repeat business and referrals.

3.4.1 Scientific Rationale:

33 Touch builds on the cumulative effect of communication. Consistent and personalized communication reinforces your brand, strengthens relationships, and positions you as a trusted advisor. This sustained engagement leverages the principles of customer lifetime value❓❓ (CLTV), recognizing that repeat business and referrals are more profitable than acquiring new clients.

3.4.2 Implementing 33 Touch:

1. Define your Contact Database: Segment into groups based on behavior, engagement level, or previous interactions.
2. Create a Calendar of Communications: The goal is 33 interactions a year through a mixture of means. This includes (examples):
   • Personalized emails (birthday, anniversary, holidays)
   • Phone calls (check-ins, market updates, special occasions)
   • Handwritten notes (thank you notes, congratulations)
   • Social Media Engagement (commenting, sharing, liking)
   • Events and Invitations (client appreciation events, open houses)
   • Personal Visits
   • Direct mail (newsletters, market reports, holiday cards)
   • Client appreciation gifts
3. Automate Where Possible: Utilize CRM systems and marketing automation tools to schedule and personalize communications.
4. Track Engagement: Monitor email open rates, website traffic, and social media activity to understand which communications are most effective.
5. Continuously Refine: Adjust your communication strategy based on data and feedback.

3.4.3 Mathematical Model for Customer Lifetime Value (CLTV):

CLTV is a prediction of the net profit attributed to the entire future relationship with a customer. While this is a simplified model, it helps illustrate the value of nurturing your database.

• Simplified CLTV Equation:

  Let:
  * ARPC = Average Revenue Per Customer per year.
  * CM = Customer Margin (Revenue - Cost) expressed as a percentage.
  * RR = Customer Retention Rate (percentage of customers who remain customers each year).
  * DR = Discount Rate (reflects the time value of money; a higher discount rate reduces the value of future revenue).

  Then, CLTV = ARPC * CM * (RR / (1 + DR - RR))

  This equation highlights the importance of increasing average revenue, improving customer margins, and retaining customers for longer periods. The 33 Touch program contributes to improving all three of these factors.

3.5 Ethical Considerations

It is important to note that any database marketing system should adhere to legal and ethical standards. Ensure compliance with privacy regulations (e.g., GDPR, CCPA), obtain consent before adding individuals to your database, and provide clear opt-out options. Transparency and respect for your contacts are crucial for building trust and maintaining a positive reputation.