THE CASE FOR E-MAIL NEWSLETTERS.

Every month, FirstPlace Software president Brent Winters cranks out a long, densely technical e-mail newsletter about search engine algorithms and keyword positioning strategies. FirstPlace gets an occasional mention in the trade press, but the company's real visibility comes from its highly-qualified newsletter audience--375,000 subscribers who want to hear what Winters has to say. In the search engine world, Winters and his company have developed brand equity and credibility that's probably far better than any advertising or public relations effort could have delivered.

But the more interesting comparison is with traditional e-mail marketing models, which have largely tried to replicate the classical direct mail sales letter. That model worked miracles for a while, but lately it's become like a newly-discovered restaurant--noisy, overcrowded, and often disappointing. Whether or not the market analysts are exactly right about the trendline (see page 2), moreover, it's clear that the problem of mailbox overload is bound to get even worse.

In this context, newsletters seem to be an important exception. Even in niche markets, offers for e-mail newsletters routinely attract tens of thousands (and occasionally hundreds of thousands) of signups, because they're generally perceived as an editorial source of information, advice, and interesting opinions--not as electronic junk mail. Few people ask to be blitzed with more commercial messages, but promising a "free newsletter" on a company Web site almost always generates a flood of names.

And the value doesn't stop with building a mailing list. Unlike one- shot direct-mail letters, newsletters build a sustained relationship with readers. That's especially valuable for products with long sales cycles or large follow-on sales opportunities: A newsletter can be a friendly, non-intrusive way to stay in touch with customers every month or so, and (ideally) to demonstrate a company's expertise and customer support.

Of course, not all newsletters deliver on this promise. Sadly, we see plenty of e-mail newsletters that are little more than serial sales letters, or that bore their readers with pseudo-news about the new Atlanta sales office or the latest venture capitalist who joined the company's board. This is the kind of self-absorbed chatter we tune out in live conversations, and it's even easier to trash an e-mail newsletter that says nothing we care about.

So what does it take to build a successful e-mail newsletter? A few thoughts:

* Figure out what's important to the reader: This is crucial, and it's worth spending a few dollars on research to develop a compelling editorial focus. For desktop product companies, the right formula is almost always usage tips, new third-party products, and support questions (it's no accident that PC consumer magazines never stray far from this formula). For complex products, however, readers tend to be more engaged by application case studies, news about their industry, in-depth technical articles, and career development topics (again, the same content that shows up in IT publications like Computerworld and Information Week).

* Use the newsletter to make a positioning statement: Attracting eyeballs is important, but a newsletter should also communicate a strong positioning message about the sponsoring company. Domain expertise, personality, commitment to customers, and problem-solving abilities are important qualities that customers like to see in vendors, so it's reasonable to ask how the newsletter's content conveys these qualities.

* Develop a distinctive editorial personality: One reason that the FirstPlace Software newsletter works so well, we suspect, is that it's written by a real person, who also happens to be the company's president. As readers, we generally prefer writers with well-defined points of view, strong opinions, interesting personalities. Bland, committee-style writing is boring and unconvincing.

* Keep it simple: Too many sections and changes of perspective are deadly for any kind of e-mail publication. In fact, some of the best e- mail newsletters we've seen are essentially nothing more than single- topic essays, perhaps 800-1,000 words in length. (If the content has to be complicated--say, a mix of product tips and support notes--it's usually better to link the reader to longer text on the company's Web site.)

* Separate editorial and sales copy: Readers don't seem to worry that a newsletter's content happens to come from a vendor, but they do get ticked off whenever sales messages suddenly overwhelm the regular editorial lineup. Stick promotional offers and product announcements at the end of the newsletter, or else create a distinct "product and company news" department for the inevitable commercials.

* Take list management seriously: Sending e-mails to 20,000 people a month is going to produce an awesome number of bouncebacks, address corrections, and--trickiest of all--personalized inquiries. Some of this work can be automated or outsourced, but remember that the newsletter's readers are customers and hot prospects. If they're ignored, they'll probably conclude that the company doesn't give a hoot about customer relationships after all.

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