The Value of a Newsletter by Ed Morrow, CLU, ChFC, CFP, RFC

The Value of sending a newsletter to clients, prospects and other professional advisors far exceeds the cost. But when queried, many financial advisors secretly admit that cost is a major element in their decision not to distribute newsletters. However, in very many cases, cost is not truly a deterrent, merely a basis for continued procrastination.

Newsletter Cost Analysis. Let's assume you send out your newsletter on a bi-monthly basis. Even if you could afford to purchase them monthly that would probably be an over-kill. You won't receive twice the benefit (greater positive client/prospect/advisor impact) for twice the cost.

Let's also assume you mail out your newsletters with first class postage. The USPS regulations now require a minimum of 250 for a discount rate, plus sophisticated sorting and postal bar codes. Unless you have a very large mailing list, the first class rate is cheaper than all the hassle and extra labor.

First Class postal service is supposed to entitle you to address forwarding and address correction, whereas undeliverable third class mail is simply dumped, unless you place "Return Service Requested" on the envelop and pay a very high price for the address correction (70 cents each). The following chart shows the cost of sending out either of the two newsletters offered at special rates to IARFC members by Liberty Publishing.

 

Quantity Mailed Per Issue	100	250
Financial Insider – 8 pages color	$79	$190
Envelopes 9x12 imprinted	Inc	Inc
1st Class Postage, 59 cents	$59	$147
Total Cost per month	$138	$337
20/20 Newsletter – 4 pages color	$52	$125
Envelope, # 10 size (est. 20 cents)	$20	$50
1st Class Postage, 37 cents	$37	$92
Total Cost per month	$109	$267

As you can see, the major difference between sending a four page. 20/20 Letter from sending an eight page Financial Insider version lies in the postage required to send the 9 x 12 envelope and eight page newsletter versus a four page newsletter that will fit in a standard envelope. Your standard imprinted #10 envelope cost may be less than the 20 cents illustrated, but that will hardly affect the cost comparison.

Some advisors like to differentiate between "A" clients and others. Therefore, they send the 8 page Financial Insider newsletter to the first group and the shorter 20/20 Letter to all others. This will save a bit of money, but complicates the mailing process. Liberty Publishing offers a "Freedom Mail" service, which will mail your newsletters for you automatically, for a reasonable fee.

However, if you are using a Client Relationship Management program, such as Text Library System, you can produce the envelopes or labels for a single or dual mailing with great ease. Furthermore, you can send out article reprints and brochures at a moments notice.

Your newsletter envelope is also the "container" for your Business Reply Cards. These cards make it easy for your prospects, clients and other advisors to contact you – with requests for information (sales opportunities) and with referral nominations. It is a great mistake not to include Reply Cards. Time magazine includes two in every issue. Readers Digest has 4 to 6 cards inserted in every issue. Reply Cards work, but you must have realistic expectations.

An important element of your newsletter is your "Masthead" of information. It absolutely should have a good photo of you. Some advisors like to also display the photo of their customer service manager – to elevate that role and encourage direct contact. Other advisors show their building or office entry on the Masthead. All of these help increase the impact of your "advertising" message at the top.

How many should you be mailing? You can easily determine the right number;
At start-up, one advisor firm might have only 100 on the list. A more mature, multi-advisor firm might have 250 or more. Hopefully, as your practice prospers the number will increase, not reduce.

Newsletter Value Analysis. As financial advisors we are well aware that cost is not nearly so important as value. Let's assume you decide to send the eight page, full color imprinted Financial Insider newsletter to 100 recipients, and you elect to mail 6 issues yearly. Your cost is 6 x $138 = $828. 

Let's also estimate that you receive only 20 Reply Cards back from your 1,200 newsletters during the year, at a postal cost of .37 to .70 cents each, depending on your accounting option with USPS return mail cost for just these 20 cards is $14.

Total Outlay $842 – or $8.42 per recipient per year.

Are these 100 persons (clients, centers of influence and good prospects to whom you are mailing worth $8.42 each? Of course!

Let's further assume that of your 20 Reply cards, 6 were requests for your services, 6 were requests for product information and 8 were referral nominees. You should be able to close half of those referrals – thus acquiring four new clients.

What is your NCR? If you have not already done so, you should calculate your average New Client Revenue – the income you can expect to receive from each new client, on average. This includes planning fees, commissions and annual asset-related fees. Suppose your NCR is $2,000. If your closing ratio is 50%, those 8 referrals would then produce four clients 4 x $2,000 = $8,000.

That is a pretty good return on your $842 expense. Plus you will have been "touching" all your clients and prospects 6 times during the year. This will certainly have a positive impact on Client retention and your professional image.

Your Decision Proposition. If you are a single advisor operation do you want to spend $842? No – but you would want to receive the $8,000 NCR (New Client Revenue) wouldn't you?

Your Client Communication Strategy. A client newsletter is not your entire marketing effort, even though it fulfills valuable purposes. It is colorful, it has your photo and perhaps that of your associates or office, it has valuable financial copy, it is not a sales piece and it has predictable frequency. It belongs in your overall Client Communication Strategy.
This strategy might include birthday and anniversary cards, quarterly investment reports, mid year and year end planning memos, an annual review memo sent in February, plus periodic information and articles.

Your Client Communication Strategy is how you maintain a positive "Top of Mind Awareness" with your clients. It is the heart of your client retention efforts. You must have a unique contact action plan for different classes of clients, as well as the other advisors you consider to be centers of influence, general prospects and referral prospects. These sequences of communications should be driven and produced by a Client Relationship Management (CRM) program. The most logical choice is one designed just for financial advisors, the Text Library System, also available at a special discount for IARFC members. Call 800 666 1656 and ask for an information kit and to schedule a free web demonstration.

Your Call to Action. It has been said, "Ideas are a dime a dozen, but taking the right action at the right time is priceless." The value analysis clearly indicates you should be distributing a quality newsletter to your clients. As an IARFC member you have a quality distribution system and quality newsletters available to you. It's time for you to take those priceless action steps. Getting your newsletters into distribution is clearly a move you should initiate – without delay.

The IARFC has developed special pricing for all our members for both the eight page Financial Insider and the four page 20/20 Letter. Why? Because we know that every member should be sending client newsletters. Liberty Publishing is a well established and respected firm. They produce colorful, well designed newsletters. Their copy quality is outstanding and all the copy has been NASD compliance reviewed.

Call Maria Cook at: 800 722 7272, ext. 148, to get started today!