The Power and Profit of the Customer Newsletter..Seriously!

NewsletterPostIf you’re a digital marketing agency customer of Optify, I want you to be as successful as possible (we want B2Bs to be successful too ☺). One of the hard parts about being a new agency or a team that’s expanding in a new direction is how to get started. Some teams are great at SEO, marketing strategy or creating great messaging and product positioning, but what if you want to expand your business and offer new services to your current customers? What should you offer? How do you sell it? How much do you charge? All great questions and I’ve got a place for you to start.

Discover the power and profitability of the customer newsletter service. It’s a relatively simple service to deliver, but it can have a tremendous impact on your business and a great ROI for your clients.

Really? A newsletter? Yes! Before your business clients start worrying about social media, an HTML5 responsive website, AdWords, display advertising or anything else – make sure they have an outstanding customer newsletter.

A good customer newsletter will:

  1. Establish a trusted relationship with the customer. It’s an online world, but customers still buy from vendors they know, trust and have bought from in the past. A well-constructed newsletter with important and relevant content is delivering value. You’ll know it’s valuable and be able to prove it when they read and respond to it.
  2. Deliver upsells of related products and services. Again, it’s easier, faster and cheaper to sell related products and services to people who have already bought at least once. In fact, it’s 5x more expensive to acquire new customers than to sell to existing ones!
  3. Increase referrals to other potential customers. Prospective customers have already done research. Many times they’re simply looking for referrals who have had success. Ask for and promote customer success stories in the newsletter.
  4. Demonstrate cost-effective marketing and great ROI. The newsletter targets the most valuable prospect of all – the current customer. For example, by using Optify for creating a template, sticking to a consistent frequency, and leveraging the power of Optify’s email marketing software, landing pages, autoresponders and Optify Connect to tie it all together – you can deliver a complete, effective and profitable campaign for your clients.

Structure

Section 1: What’s New

Successful businesses rarely stand still – what’s changed that’s great for the customer? Do they have a new product or service that’s an add-on? New packaging/pricing for extending a subscription or generating an upgrade?

Section 2: Customer Spotlight

Demonstrate customer successes. Make sure they know they’re not alone! Include a customer Q&A or customer success story with a picture and a quote.

Section 3: Industry Spotlight

Educational 3rd party article/blog post. There’s a lot of content out there. However, it’s not all good or accurate. Be selective. Credit the source. Another ‘authority’ will support your topic or create added interest and validation.

Section 4: The Call-to-Action

Create a single (or at most two) call(s) to action. What do you want the customer to do, specifically? Call now, order today – you get the idea.

Take them to a landing page with a focused offer. This will give you an opportunity to create context and not distract them with other visual noise (i.e., don’t drop them onto a home page of the website).

Make sure you have set up the autoresponder off the landing page to ensure the customer gets a confirmation and follow-up.

Frequency

The customer newsletter is an awesome offering because it’s something that you can do right away. However, it’s critical to determine how often it makes sense to engage with the customer. Consider the difference in a B2B world versus a B2C client’s target audience. B2B will likely be less often, while a B2C customer might expect multiple emails per month. Have you ever heard the saying “Just because you can, doesn’t mean you should”?

Start with one email per month and go from there. It’s easy to add more communications, but difficult to recover from a bunch of unsubscribes from over-communicating in the first 30 days.

Important: You can always ask for feedback from the audience BEFORE they vote with their Unsubscribe button!

Opportunity

Our CEO Rob Eleveld is constantly reminding us “Successful agency customers know how to keep their business repeatable and we need to help them.” So, why did I start with the customer newsletter?

It’s repeatable. The newsletter service is an easy way to have an ongoing relationship with your clients. In the end, you want to offer retainer-based repeatable services.

The service should be very affordable to clients. Therefore, it’s a relatively short sales cycle and your clients can see almost immediate value add. It’s a service that agency owner/principals are not required to deliver and can still be successful. A much more junior (i.e., cheaper) resource can be applied to research and deliver – more margin.

Cost and Pricing models

Ok, let’s break it down. Clearly, this model is an approximation and won’t be an exact calculation for everyone, but it will give you a framework to use.

Cost

Part of the secret sauce to making the service profitable is understanding how to allocate the costs for successful delivery and managing the content.

  • Resource
  1. Communications/Journalism Major, 0-2 years experience
  2. Approximately $20-$25/hr.
  • Content

Newsletter development: ~4 hrs.

Section 1: What’s New

1-2 paragraphs created by the client, formatted by agency (0.5-1.0 hrs.)

Section 2: Customer Spotlight

Consisting of a short phone interview, write-up and a photo of the customer: (1.5 hrs.)

Section #3: Industry Spotlight

Find/link to 3rd party educational article: (0.5 hrs.)
General formatting & test send: (1.0 hrs.)

Note: there will be a one-time setup cost in your model to upload the customer list and create the landing page with a great call to action.

Pricing

Now that you have the cost model, let’s review the all-important pricing strategy.

Gross Margin Analytics:

  1. Target 65%+ gross margins for your list pricing (about 3x markup)
  2. Resource, $75/hr. ($25×3)
  3. Content, $300/newsletter ($75×4)
  4. Allocate your costs for Optify or other software at $150/client

Total monthly newsletter retainer: $450-$500 per month per client.

Note: $300 per month is still 50% gross margins!

Here’s some additional thoughts and recommendations to consider. If more hours are required, raise the retainer, but keep the fee less than $1,000/mo. It’s more important to sell as many newsletter services as possible. Similarly, as an overall pricing strategy, it’s worth discounting to $300-$400/mo. to get more clients on retainer.

Power and profitability, revisited

Remember, this service is a powerful strategy for moving clients from project-based services to retainer-based services. Your profitability is not only the immediate revenue and margin benefits of the service, but now you’re part of your client’s ongoing marketing process.

If you convert 10 clients @$500/mo. that’s $5,000/mo. in retainers and a very high probability of delivering great ROI for your clients that will lead to additional business.

Powerful resources and next steps

At Optify, we’ve recently done a complete webinar on this digital marketing service and have developed a co-branded presentation you can use to help present your newsletter service to clients. It’s fast, free and complete. Click here to watch the webinar, download the sales presentation and, most importantly, get started today!

Leave a Reply

Your email address will not be published. Please enter your name, email and a comment.