The corporate newsletter: Neglected for
years. Resurrected at last!
 Wastepaper
baskets, the world over, are full of them.
In fact, if there were ever a competition to judge the most self-indulgent
of all business communications, the newsletter would have serious competition from only
the corporate video for first place!
A tragedy, when you consider that newsletters have the potential to be by
far the most valuable communications tool any company can invest in.
Certainly, for most JRMA clients, newsletters are the backbone of their
marketing programs.
Our newsletters generate a steady flow of new customers, unlock the
‘lifetime value’ of existing customers and position our clients as leaders in
their fields.
This article explains both why and how you should establish a newsletter
as the backbone of your marketing program. It all starts with a little marketing theory
– an introduction to our ‘relationship-centric’ marketing model.
A ‘relationship-centric’ marketing program
We like to say that there are two types of customer in the
world.
One type of customer buys a product. (They focus on product attributes and
price.)
And the other type of customer buys a relationship. (They are less
interested in a transaction, and more interested in a longer-term relationship.)
Most small- to medium-sized business would be wise to focus on this latter
type of customer. Certainly, small businesses have a natural advantage when it comes to
‘customer intimacy’. Furthermore, relationship-focused customers are prepared to
pay a premium for these relationships – insulating smaller businesses from the
inevitable ‘margin shrinkage’ that efficient markets (read: their larger
competitors) inflict upon them.
Smaller businesses tend to recognise this. But few have any idea how to
attract, to service, or to profit from relationship-focused customers.
The solution is to turn traditional marketing methodology on its ear and
build a relationship- rather than a product-centric marketing program.
Selling a relationship
If you’ve decided you’d rather be in the business
of selling relationships than (keenly priced) products, here’s a three-step
introduction to our ‘relationship-centric’ marketing model (click to enlarge):
-
Take your focus off sales. If your customers aren’t
transaction-focused – you certainly shouldn’t be.
-
Create an automated communications program.
Because a key
ingredient in any relationship is ‘communication’, this system should provide
your customers with regular (and meaningful) points of contact with you. Your automated
communications program should be designed to exploit the value resident in the
relationships under your management. However, rather than designing this program to
optimise the value of individual transactions, you should design it to maximise
customers’ ‘lifetime value’. ‘Lifetime value’ is a measure of the
gross profit earned over the life of a typical customer relationship.
-
Identify potential customers and introduce them to your automated
communications program. Rather than establishing a relationship with people after
they make their first purchase (as is normally the case) you should establish a
relationship in advance. If your potential customers are those who will buy on the
basis of a relationship, doesn’t it make sense to deliver this relationship in
advance? (You’ll discover, in a moment, just how inexpensive it can be to introduce
potential customers to your automated communications program.)
Enter the humble newsletter!
Well, that’s the theory out of the way – and the
stage set nicely for the newsletter!
Step two of our ‘relationship-centric’ model involved building
an automated communications program. And, as you already know, your newsletter should be
the backbone of this program.
The purpose of your newsletter should be to provide those regular and
meaningful points of contact we mentioned previously. Of course, your newsletter can be
augmented with other types of customer contact (outbound calls, face-to-face visits,
workshops, and so on), but your newsletter is likely to remain the most important
component of your automated communications program. This is because a newsletter allows
you to provide your customers with a considerable amount of value, for a fraction of the
cost of face-to-face (or even telephone) communications.
Think ‘mini-magazine’
Now, for your newsletter to make an effective contribution
to the quality of your customer relationships, it must be genuinely meaningful. Remember,
if you emulate the self-indulgent style of the half-dozen newsletters that are currently
providing ballast for your wastepaper basket, yours is likely to suffer a similar fate.
The best model for the editorial style of your newsletter is a magazine.
The competitive nature of the publishing industry has resulted in magazine editors
becoming particularly adept at producing publications that their readers want to read. (In
fact, it’s worth noting that Australia has the highest per-capita readership of
magazines in the world.)
You would, no doubt, have noticed the rapid fragmentation (specialisation)
of magazine titles over the last few years. We suggest that your newsletter should be a
‘mini-magazine’ designed to appeal to a finely targeted group of individuals
– your customers (and potential customers).
The key is to emulate the editorial style (and the look and feel) of a
publication your customers are already likely to read. Your newsletter’s articles can
then provide readers with more specialised, and perhaps more current, information. The
test of the quality of your newsletter is to ask yourself: Would my customers be prepared
to pay for this? If your answer is yes, you have a powerful communications tool.
Compelling content:
four components
Once you’ve settled on the editorial style of your
newsletter, your next challenge is to decide what you’ll write about. Each of our
newsletters typically contains the following four components:
-
Feature story (or stories) . To write a feature story, pick a
subject of interest to your customers from within your field of expertise, and
‘empower’ your readers with a clear understanding of it. (As Queensland’s
Noel Whittaker has demonstrated with his best-selling books on money, a great way to take
ownership of a category is to freely share your expertise.)
Editorial comment . Typically, editorial columns are used to
share company news (new employees, etc). If I were you, I’d bump this exciting stuff
to your ‘news in brief’ column below, and use this space to deliver a
thought-provoking (and preferably controversial) opinion piece. Where other articles in
your newsletter may be written in third person, your editorial comment should definitely
be written in first person – preferably by your company’s designated
spokesperson.
News in brief . Here’s the spot for industry (and yes)
company news.
A case study . One of the challenges you face selling
relationships is that your ‘product’ is intangible. Consultants often tend to
find it difficult to dimentionalise the benefits of their services. Obviously, one of the
benefits of your newsletter is that it enables potential customers to experience a
relationship with you prior to making a purchasing decision. Another particularly
effective way to demonstrate the benefits of a relationship is to allow your potential
customers to ‘walk in the shoes’ of existing customers.
A case study should introduce a customer, outline a problem they were
facing, walk the reader through the steps your company took to solve that problem, and
then paint a picture of the end result.
… just add people!
Once you have a newsletter that communicates meaningfully
with its readers, you have your ‘automated communications program’ – the
backbone of our relationship-centric marketing model.
Your next step is to introduce people to this communications program.
These people should come from three sources:
-
Customers . Obviously, your customers have a higher propensity to
spend money with you than strangers do (that is, unless you’re doing something
dreadfully wrong!)
Prospects. These are people who have both the reason and the
ability to become customers of yours. More importantly, they are people you feel are
likely to be relationship- rather than product-focused. We’ll talk more about
identifying prospects in a moment.
Centres of influence. A centre of influence is a person who is
in a position to refer customers to you. He or she may not actually be a prospect. A
typical example of a centre of influence is a journalist from your trade publication.
Introducing people to your communications program is as simple as adding
their details to a database. You could manage this database in-house. However, our advice
is to outsource it to a specialist. Most capital cities have mail bureaus that provide
database management, as well as mail processing (and often list rental and telemarketing)
services.
We do not recommend creating a fanfare when you introduce prospects to
your communications program. A simple letter of welcome will do.
Identifying prospects
The great thing about dealing with relationship-focused
customers is that you don’t have to ‘make a sale’ to have a relationship
with them. In other words, initiate a relationship first, then leave the selling (or
should we say ‘buying’) up to them.
But how do you identify prospects?
Well, if you sell to businesses, it could be easier than you think. You
might just find that the names and contact details of your prospects are available from a
list broker. For example, if your target prospect is a ‘human resource manager
working in a company with 100 or more employees’, this list is available from all
good list brokers. Simply buy the list and add the records to your database.
If your prospects need to be better targeted than this, it might be worth
commissioning some telephone research to filter these records. For example, if you want to
identify those human resource managers who operate a particular software application,
it’s still cheaper to have someone ring and ask, than it is to try and strike up a
relationship with advertising!
If you cannot purchase (or otherwise acquire) a list of suitably targeted
prospects, you may have to resort to less direct forms of ‘lead-generation’.
Now, because you’re looking for relationship-focused prospects, the
trick with lead-generation is to promote a relationship – rather than your product or
service. The obvious way to do this is to offer prospects a free 12-month subscription to
your newsletter. Remembering that your newsletter has been designed to be truly valuable
to prospects – this is an offer that’s likely to be eagerly accepted. (About 20
people a month request free 12-month subscriptions to AdVerb via our Website.)
We recommend the following promotional mediums for your lead
generation-campaign (listed in typical order of effectiveness):
-
Strategic alliances. Your prospects are already other
business’s customers. Identify businesses that serve your prospects, and convince
them to offer a free 12-month subscription to your newsletter to their customers.
Direct mail. If the lists that you can obtain from your list
broker are not qualified enough to warrant the cost of telephone research, you can
identify qualified prospects by offering a newsletter subscription to this list.
Respondents are likely to have both an interest in your services, and a bias towards
relationships.
Advertising. A successful lead-generation advertisement is
little more than a good direct mail letter, reformatted for the media in which you’re
advertising. Of course, your offer is still a free 12-month subscription to your
newsletter. (You’ll find a couple of articles on advertising on our Website.)
Not just a newsletter. A total
marketing solution.
Once you’ve navigated our three-step process,
developed a relationship-focus, built an automated communications program and introduced
prospects to this program, you’ve successfully converted your newsletter into a total
marketing solution.
Your newsletter is now the backbone of a coordinated program that
identifies potential customers, develops a relationship with them – perhaps even
before they need your services – and then manages that relationship to exploit their
lifetime value.
The good news is that the management of your relationship-centric
marketing program shouldn’t consume a lot of resources – financial or otherwise.
Key functions, including the research, writing, production and distribution of your
newsletter, the management of your database, and the creation of your lead-generation
campaigns, can all be outsourced.
And even if you do choose to outsource all of these functions, once
it’s established, your newsletter should cost you around $4.50 per contact.
That’s less than the cost of a face-to-face (and probably even a telephone) contact.
The theory is simple and, in most cases, its application is easily
affordable.
Now might be the time to dust off your newsletter
and see if it’s really living up to its true potential.
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