How to Design an E-Mail Newsletter to Maximize Your ROI: Part 1

Chris Bjorklund: You’re listening to the AllBusiness podcast. I’m Chris Bjorklund. If you’re getting this through iTunes and RSS feed or an online streaming-media player, you can hear interviews with other experts at AllBusiness.com.

Bjorklund: Did you know that a majority of consumers think the email newsletters that are sent to them are spam? Even if they know the sender? How can you make sure your company’s newsletters don’t get sent to the trash? Joseph Carrabis, an AllBusiness blogger and founder of NextStage Evolution, is here to talk about how to design a newsletter to get the maximum return on your investment. Joseph, so many businesses that I talk to, I mean they are all sizes and types, they’re either publishing an email newsletter or they’re planning to publish an email newsletter. Tell me what are some of the key elements for these people that are at least beginning the process, what should they be thinking about in their design so that they get some kind of return on their investment?

Joseph Carrabis: Like everything else we have ever looked at, there are rules and formulas that emerge if you’re willing to put the time and effort into looking at them. So you know, the first thing is with your audience, you’ve got to do research. I know it’s a horrible thing and I know it’s an ugly thing and I know it costs money but the ROI on a little bit of research is truly amazing. For example, first thing, if you can find out what type of device your audience more often than not will first open the newsletter on. I know that--now when I first realized and I got that information, is I said, “That’s idiotic.” But no, it’s true. If you know that your audience is the first time they look at your email newsletter is going to be looking at it on a Blackberry or an iPhone or some kind of smartphone or mobile device, a handheld device and you designed for that device, boom! You have got them. You have just done a little bit of research and you have got tremendous response because we discovered that if you know this one piece of information, if you know the majority of your audience is going to be the first time they see it, seeing your email newsletter on a handheld, and they see stuff in there, so to speak, you know, right there that “that’s good for me, that’s good for me, that’s good for me,” they will react to it. They will take you up on it. They will follow the link or, you know, do whatever they need to do to get you the kind of response you want. The thing that comes right after that that is so important is knowing the demographics. Now obviously, not everybody is going to be looking at your newsletter on a handheld. So if you know something about your demographic--because handhelds do tend to be demographic-specific. Let me just give you another piece of that because this is so rich, I think. People who have handhelds tend to--when they see information they will either technically or mentally mark something as something they should follow up. Now it is not in the sense that “I have to respond” but it is in the sense of “this is important, so when I have a chance, I’m going to go back to it.” And that’s important and this is why what they see it on first is important, because they will see something on their handheld and then they will make the mental note. That’s important: “I want to get back to that.” When they get back to their office, you know, or their home or something, they’ll actually go, “OK, well, I remember seeing that. Let me now check it.” So the important part is they saw it, they may have taken action on it later that day or the day after but they took action on it. So demographics, after, what did they see it on, do the research to find out your actual demographic.

Bjorklund: Joseph, since I don’t have a Blackberry and don’t receive my email on that, maybe some people in the audience don’t either, is it true that you don’t get the same color and graphics when you open an email on that type of device?

Carrabis: To a certain extent, you know, the technology is getting better and better all the time. So there’s the question of you get the same exact colors. That’s an excellent question and with all due respect, it’s almost a little old school. Because the technology, now, I don’t know how to program so please don’t have anybody contacting me and asking me how you do this, one of the things we saw with one of the newsletters was the newsletter, the email itself somehow knew what the person was looking at it on, so the email essentially had some kind of thing inside of it that said, “I’m being looked at on a handheld versus I’m being looked at on a desktop.” And it adjusted itself so that even though the same information was presented, there were certain changes to the presentation so that, you know, how you would follow it, so to speak, with your eye on a handheld versus how you’d follow it on a desktop, a big monitor, it was so beautifully laid out, I sat and I’m looking at this and I’m going, “Wow! Somebody really put time into this.” I don’t know how difficult it is to do, but to your question, are different colors and stuff important? It’s important to the extent that if you know how to design for what’s being seen and how much of your newsletter is being seen, that’s important. Are they, you know, opening this up when they’re on the train or on the subway or whatever, commuting to work? God forbid, they’re not driving down the highway when they get it. But you know, are they looking at this in preparation for the day? One of the things we discovered, especially in healthcare, where family health-style newsletters and personal health-style newsletters, anything that had to do with the person as an individual or as a family member, we discovered that timing literally when do they receive the email in their inbox was critically important. So for example, if you know that the majority of your subscribers in their local time zone open their email, tend to sit down and go through their emails, let’s say after dinner once the kids are in bed. And if you can shoot that email to them, somehow organize your system so the email will come to them right when they’re getting their emails, all of a sudden your email has priority. It just showed up. “Oh! This must be important!” Psychologically, the mind does this little trick and says, “Oh! This has got to be important. It just showed up in my inbox while I’m sitting here. Ooooh!” We found that so much of ROI came down to understanding the psychology of your audience. You know but that’s true in all marketing but because email tends to be more one-on-one, so to speak, it was much more important.

Bjorklund: Now you studied what? Fourteen hundred email newsletters and then dug in a little further on some of them, just so people know, well you know, we’re talking about research that went on over a period of time and that your insights and advice are really based on a very in-depth study. What kinds of patterns emerged in that work?

Carrabis: Yeah, we did. We actually started off as a bunch of emails and we were looking at emails from all over the country and all over the world, I should think. And on every topic you could imagine. I mean, basically, we had everybody at the office, you know, spend about two days going through different websites and doing searches and if anybody has an email newsletter on anything, just start getting it. And then we narrowed it down, you know, we found certain emails that we used our own technology to analyze and recognize this one probably will be more successful than that one. And we did some followups. We did calling of the authors and contacting the authors and the companies and what’s your response rate, you know. How does this work? Are you being successful? How do you define success as a different link or whatever, you know. Somebody buys more when they go to the store or whatever it is. And everybody has--you know, success metrics are similar and different. It’s one of those interesting things, you know, if you sound like you’re a major distributor of beauty products and your success is measured by how many people go into a retailer and buy your product. OK, well that’s your success. Can you directly link it to the fact that your email newsletter came out? There’s a certain time, you know, response, time application response between you know they open up the newsletter and you know sales went up. OK, that’s good. So it’s things like that and we were able to narrow it down by finding out what was successful, where, and with whom, and when we got them, you know, just a god-awful number of newsletters to a certain specific number and that’s where the real patterns begin to emerge and what we discovered was that there are six basic ways to lay out a newsletter that work in specific verticals with specific audiences. It was really kind of fascinating, the topic. Did the types of these six newsletters designs, I guess I would say. We call them masks because it doesn’t really matter. It’s like a mask you put on your face. It doesn’t matter what’s behind the mask, once you have that mask on, people will just see the mask and respond to it. It’s really kind of…it’s kind of wild! But anyway, so you have these basic forms. There are six of them. One of them, the sixth one that we found is very specific to handhelds so we kind of put that out to the sides. But these other five, if you will, what is your topic? Is the reason for your newsletter to be industry gossip rather than sales per se, OK? Well then there’s you know, mask number 2 so to speak. This form that works really well. Is your reason for doing this kind of a product blast? We just are putting on the shelves this product, go see it, and here’s $10 off. OK, then do you use mask number 3 so to speak. Is the reason that you have the newsletter purely to stay in touch with your audience? Make sure that it stands out, just to, you know keep your name, your company name, your brand in front of a--use mask number 5. And again, you know, I don’t want people to be thinking that, you know, OK here’s you know, one from column A, two from column B type of thing. Do you know who your audience is? It keeps on going back to that in so many ways.

Bjorklund: There’s so--you can’t really have a, you know, there’s not one simple formula, is your point.

Carrabis: Not that we know of yet. We’re working really hard on making one. Just like everything else we do, we’re making a tool that handles but...

Bjorklund: Yeah, but you’re not quite there yet but by identifying these six areas, these six masks, you know, it’s sort of a beginning for companies that are looking for, OK what’s a good tools for my type of newsletter?

Carrabis: Exactly. Yeah, exactly, you know again, the healthcare industry, images in financial markets. For example, if you have a--we actually were working with a financial institution up in Canada about this and one of the things we suggested with their newsletter was they had very well-researched market segments. They know these are their market segments and going after them. Good for them! They did their work. Excellent. And one of the things that we suggested for a younger wealthy audience, you know people who are basically making themselves in the world, so to speak, have images of goals. You know, have an image of the cabin up in the mountains or the place on the seashore or you know, have an image of that high-end Mercedes or you know, whatever. Have an image of that big hunk of diamond ring. Whereas, a more mature, my age group, wealthy audience, it’s not often that somebody in my age group suddenly wakes up and has a million dollars, you know what I mean? We tend to have put a few hours in to establishing ourselves and that’s not the disrespectful or saying things better than anybody else, just, you know, it happens to be what happened and be the late bloomers group. So with us, don’t necessarily show me an image but tell me what’s going to be good and you literally write half a paragraph telling me what’s going to be good and then have a wink after that. So you know, even with financial newsletters and you think, “Ah, well, OK. Here’s the form for financial newsletters.” Yes, here is the mask but then what goes in that mask, you know, is it more graphic or is it more text? Is it more length or is it more color, you know? Is it gender specific? We found a company in Florida that does a newsletter to basically wealthy women, middle-aged wealthy women. Women who have gotten in the executive track and have, you know, made their mark and now basically want to enjoy. And they did just a tremendous job of research and putting together, you know, who exactly is their audience and how would they respond and what do they respond to and what kinds of things do they want in their lives? They laid it out beautifully. We’ve made a couple of very quick suggestions, very, very basic suggestions. Stuff that, you know, if you sat down and saw it, you would say, well, I don’t really see the difference. But it doesn’t matter if when you’re looking for it, you see the difference. What matters is it triggers something in the subscriber’s mind that makes them respond and yeah, sure enough. Their clickthroughs went up and people starting signing up for more stuff and other stuff and seminars. OK! Life’s good again, you know.

Bjorklund: You know, you weren’t talking about links. Is there any--are there any guidelines on how many I should have?

Carrabis: Yeah, it’s a really funny thing and this comes right out of cognitive science and psycholinguistics, it’s one of those beautiful links that you can see in a lab and when you actually see it on the street, so to speak, if you’re a researcher, you get all excited and you point to it and you start grabbing people, “Look! My God, it really works! Look! Look!” You know, a part of Joseph, you don’t really care about. But anyway, you get to find the excitement where you can.

Bjorklund: Right, right.

Carrabis: So, we discovered that if you have a newsletter-style format and you have two basic links. Two things people can do, OK? They’re going to stop. They’re basically not going to follow either link. Or if they follow either link, they’ll do it a long time after the value of the link has expired. So for example, let’s go again with let’s say a daily financial-type of newsletter. Here’s what happened in the market today. Here’s what you should do. OK, that type of thing? There’s where you should put your money today. If you only have two action items in that newsletter, that daily here’s-what-you-need-to-do newsletter, forget it. People aren’t going to do anything. Ninety-nine point nine-nine percent of the time, a lot of the time, whatever, however you want to call it, people will just not respond. But if you do three, I mean, again this is one of those you-got-to-be-kidding jokes. It’s this simple. Yeah, really it is.

Bjorklund: It’s this simple.

Carrabis: If you put three links and here’s the money, and we show this to people and show them how the responses they get and their, you know, “Oh God!” People are banging their heads. You have three items. Here’s the daily financial newsletter, you need to do these things to achieve solidly and you know, liquidity and all of that kind of good stuff and you give them item one, so to speak, that you don’t want them to do. But you put it in there and you give them item three, which is don’t want them to do but you put it in there and give them item two and make item two literally the second option that you give them, the one that you want them to do and they will go after item two.

Bjorklund: That’s nice.

Carrabis: They will just nail that item two.

Bjorklund: Wow! Well, yeah why?

Carrabis: Because you’ve literally given them the middle-of-the-road choice. People like to be in the middle of the road.

Bjorklund: You’re listening to an AllBusiness podcast with Joseph Carrabis, founder of NextStage Evolution. This program is continued in part 2 on how to design an email newsletter to get maximum return on your investment. I’m Chris Bjorklund for AllBusiness.com.