Driving Repeat Business Part 4: Newsletters


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published August 16, 2002

Business-to-Business companies are increasing their focus on repeat and referral business. While this may represent a sound strategy, talk is cheap but action is the key. In this fourth installment on driving repeat business, we will explore the use of Newsletters to drive repeat or referral business.

Company sponsored email newsletters as a marketing tactic is gaining terrific momentum – for both the company marketing value-offerings and the target audience. For the selling company, newsletters deepen customer relationships, provide additional brand-nodes and brand-links within the target market’s mind, and remind customer’s that the value-offering is available whenever the customer’s goals are activated. For the target audience, newsletters can provide value-added information, explain alternative means of using a product/service, or highlight additional opportunities.

At first blush, email newsletters appear to be a costless marketing tool. Email cost nothing to send in comparison to postal mail and sending the newsletter to old clients and prospects reduces the price to creating a recipient list to zero. Yet this viewpoint ignores the opportunity costs associated with the preparation of newsletters and its distribution.

For marketing newsletters to be positively received by the audience, the content of the newsletter must address the issues of the target market audience. For instance, a newsletter from a venture capital fund to its investors may be focused on the performance of the fund and the companies within it. For a professional service firm, the newsletter may be focused on the research and discoveries made within the firm. For any firm, possible topics may include industry trends, new ways to use the product or service, case studies of current customers, or press releases.

The preparation of this content requires effort. While some of the content may be pulled from the general sales and marketing literature produced by the company, much of the content will need to be freshly prepared for each publication. The preparation of this content requires time and effort on behalf of the company staff. This effort comes at an opportunity cost and this cost should be considered prior to planning a newsletter publication program.

A second cost issues is in regards to the distribution. While email can be distributed manually, a distribution list with an audience in the hundreds or thousands will quickly overwhelm the time resource of the sales and marketing staff. A cheap, semi-automated solution can be created using the Microsoft Office suite, yet this has some limitations in regards to presentation. To alleviate this pain, many vendors have created automated software solutions to the distribution of professional looking newsletters.

One of the most publicized issues in regards to email newsletters is that of spam. Clearly, companies want their customers to receive their marketing communications positively and opt-in methods currently have the strongest acceptance. Yet audience receptivity isn’t the only issue with regards to spam. A second looming issue growing in importance is the ability to send a newsletter through a corporate firewall.

Companies appropriately have created restrictions to the type of email that its employees can receive. Unfortunately, these restrictions have created barriers to communication. Many phrases that include the word “free” will automatically force the email to be rejected. Other less obvious phrases also cause problems. Because I want this email to reach my audience, I can’t simply write these phrases in this communiqué. To get around this problem, just remove the word “(delete)” from the following phrases: “as (delete) low (delete) as”, “interest (delete) rate”, “save (delete) up (delete) to”, etc. The point is that rather innocuous phrases made within an article can force the entire newsletter to never reach its audience. Someday, I suspect that this issue will be appropriately addressed, but the conflict between security and free association will continue to be a tension point in our future.

Marketing newsletters will continue to grow in importance. Despite the hurdles mentioned above, email newsletters can improve customer relationships and drive transactions with repeat and referral business. And like other marketing tools, email newsletters should be integrated within a larger marketing plan to achieve maximum effectiveness. Their value as a marketing tool is measured by their ability to support the revenue generating engine.

The May Report, TECH BUSINESS BRIEFS, Aug 16, 2002

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.