There is no marketing tool, skill or service available today that has the referral power of a printed monthly newsletter. This may seem a little “old school” with the advent of the Internet and email, but please read on and you’ll quickly see why it isn’t. A printed monthly newsletter with the right mix of content should bring you a minimum of one to two referral clients for every 100 newsletters mailed. So it quickly becomes a matter of how and what you do to get these results.
While doing research for this article, I came across a gentleman named Jim Palmer, the self-proclaimed Newsletter Guru and the author of the book The Magic of Newsletter Marketing: The Secret to More Profits and Customers for Life. I was so impressed with the book’s content that I reached out to him for an interview for this article. After several attempts and a great deal of juggling around Jim’s hectic schedule, we were able to spend about an hour together on the phone to discuss his perspective on the benefits of newsletter marketing.
Jim is a very astute businessman who understands both the lifetime value and the referral value of a client. According to Jim, a newsletter is a smart tool that can help bring in new clientele. “Each 1 percent increase in customer retention is equivalent to a 7 percent increase in profit in just about every business,” he said. “One of the reasons why is that it takes five to 10 times more effort to acquire a new client than it does to retain one. It’s more expensive, it takes longer and it’s harder to go find new customers. A friendly customer newsletter is the strongest client retention tool you can use [to help] you develop, grow and enhance the relationship.”
I instantly knew that I was talking with the right man. I mean, it’s all about the profit, isn’t it? I jumped at the chance to find out for myself, and our readers, what we need to do and how we need to do it to produce a newsletter that we can all use as a referral magnet.
Jim’s very first client was a mortgage broker who told him that every month he sends out a newsletter and gets a minimum of one new client by way of referral. “I give great service, but if I don’t stay in front of my customers, they forget about me because it’s out of sight, out of mind,” his client said. “I don’t need to think about my mortgage guy. Yet friends and neighbors will ask who did your mortgage for you and if I don’t keep my name in front of them every month, they forget about me.”
KD // Why are newsletters so important for growing your business?
JP // Newsletters are an essential part of a strategy for client retention and are a very effective tool. The overall marketing concept is one of “keeping up.” Because we know that customers who stay engaged with businesses longer, end up spending and buying more of the products and services and they also end up referring much more.
KD // Why are newsletters such an effective marketing tool?
JP // There are a couple of reasons why newsletters are so effective. Customers read them with their guard down, as opposed to reading a sales letter or postcard. When anyone feels a sales offer is coming they put their defenses up. But newsletters tend to be read as informational and people are conditioned to be less resistant to reading information as opposed to advertising. That’s why it’s so much better than other types of marketing. The big advantage is that you have a properly written newsletter—newsletters that are informational, friendly in tone and conversational—so the information gets through. Newsletters are also very good at increasing name-brand awareness, since your name, picture and company info are getting into their mailbox every month. They’re very good at building your reputation as an industry expert, introducing new products and services. Newsletters also tend to get read by multiple readers, making them an excellent source of referral business.
KD // Too many companies look at a reverse mortgage as a single sale cycle and don’t realize the value of retaining the client relationship that took so much time, effort and money to establish. A pleased customer is an absolute goldmine for referral business that way too many people overlook.
JP // Yes, I agree wholeheartedly!
KD // Please discuss the importance of consistency in producing a newsletter.
JP // It’s very, very important that you mail every month. The businesses that have the most success with newsletter marketing are those that do one simple thing: They make sure the newsletter arrives during the same two- to three-day period every month. Things that arrive on a consistent basis, every month, are perceived as important, as opposed to things that arrive sporadically and are perceived as junk mail—and you don’t want your newsletter to be regarded as junk mail. By simply mailing on a consistent basis, you will instantly stand above the crowd and your newsletter will be considered a valuable piece of mail.
If you send out a two-page black and white newsletter every month you will do infinitely more referral business than someone who sends out an eight-page color newsletter quarterly or a few times a year. Consistency also refers to design and type of content. You want to come up with your design and stay with it. Not every customer is going to read your newsletter front to back; realistically most will only read one or two articles, or skim it and put it down. Not that that should dissuade you from producing a monthly newsletter; it’s actually a very good thing. You’re creating top-of-mind awareness, keeping your name in front of your customers and producing a steady source for referrals.
Just about the time you become bored with your marketing message is just about the time your average client is fully understanding it and comprehending it. So don’t be bored with what you look at all the time. It takes a long time to build brand awareness, so keep it consistent.
KD // You spoke about two types of newsletter content. Please explain.
JP // One of the things you need to remember is that the main purpose of producing a consistent newsletter is to build top-of-mind awareness, give people some fun information and basically just get them to remember your business. The ideal ratio of “irrelevant” to “relevant” info should be 80 to 20 percent. Many businesses owners are thrown by this; they think newsletters should be more sales-focused. But newsletters are not there to do the heavy lifting of sales. You should have the majority of your content be non-sales, fun and informative—you want people to read it. You should have a monthly success story and an article or two about the business you’re in; the rest needs to be light and desirable to read by anyone.
KD // Please talk about the design elements.
JP // You want it to look “professionally homemade” and like it came from you. The design should be light and airy; you don’t want it to look like a science textbook. You want to have at least one picture per page and preferably one picture per article. Typically, I do probably two or three articles per page, maybe one main article and two smaller ones, or three smaller articles.
The Newsletter Guru’s test for readability: If your newsletter comes out of the mailbox and your reader looks at it and can quickly determine that they can read it in 10 minutes or less, chances are very good that they’ll read it. If not, it gets put into the “to be read later” pile, which almost always turns into the round file!
KD // What are the major obstacles people face when deciding to produce a newsletter?
JP // Past clients have stated, “We never know what to put in our newsletters and it takes so long to write copy, find articles and find someone to get it designed. We tried before and started and stopped so many times.” One strategy is to realize that you don’t have to write an entire book each month, but you do want to focus on both types of content: the work stuff and the fun stuff.
You can also find a service to provide you with content, like mine, but be careful not to
KD // Why is the newsletter so important for referrals?
JP // It’s about the demographic your readers are dealing with. They are much more community-based, have longer friendships and are much more likely to talk about things like their reverse mortgage. They’ll probably have a stack of your newsletters sitting on a bookshelf somewhere to give away to a friend and make a referral.
My interview with Jim made me realize that the No. 1 priority is to be consistent, every month, without fail. Secondly, I learned that it’s important to make it fun, informative and easy to read.
Newsletters can be the least expensive yet most effective referral strategy out there. For a small investment of a couple hundred dollars a month, you can quickly begin a recurring stream of referrals, and if you grow your list, you’ll increase your referrals even more.
The main problem, as Jim stated, is that people don’t have the time or resources to put this together every month. That’s why the use of a service, for a very nominal fee, is your best solution. You’ll know that it will be done every month, on time, and you’ll appear consistent, which is so important when it comes to newsletter marketing.
Good luck and good marketing!
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