In order to maximize the ROI you’re getting from your newsletter, the first thing you need to do is double-check your mindset. Here’s what I mean. The #1 question I get when I sit down with another company’s team to talk about their newsletter is this: “How do I track new revenue?”
This is a fair question, but it’s the wrong question to ask. Frankly, lead generation is not the best use for a newsletter. If you’ve been hoping your newsletter will generate a ton of new leads, now is the time to flip your mindset. That’s Tip #1 for maximizing your ROI.
Here’s why the mindset shift is necessary: When you put all of your focus on leads, you’re concentrating on the wrong part of what I like to call the “customer journey.” It looks something like this:
Traffic —> Lead —> Nurture —> Offer —> Sale —> Deliver —> Nurture —> Refer —> Retain —> Upsells
The direct ROI part of this process is rooted in three sections: traffic to lead conversion, offer to sale, and upsells. As you might notice, that makes up just 30% of the process. Without the other 70%, you will never have success. Most businesses don’t scale simply because they fail to focus on this entire journey, including the indirect ROI. They get in the mindset that the only things that matter are the lead and the sale, and they forget about the customer after the sale, which hurts retention and overall ROI. Don’t fall into that trap.
Track Your ROI The Right Way
We all know that if you generate 100 leads, you’ll likely close only a small percentage of them. So, once you have leads, you need to nurture them to make the real money. Newsletters are great for nurturing leads, but you can’t track direct ROI on them very easily. That’s why Tip #2 for maximizing your ROI is tracking it the right way. You can track indirect ROI by looking at 3 of your numbers:
- Closed deals percentage
- Average customer lifetime value (CLV)
Here’s why that first one works. Say you’re closing 4 of every 100 leads, then you add a newsletter to nurture those leads and make offers. You can easily track an increase in the percentage of prospects who become clients. The funny thing is that many businesses don’t even think to send their newsletter to prospects! Doing that is my Tip No. #3 for maximizing your ROI.
Tracking your CLV works because keeping a customer is often both more valuable (from an ROI perspective) than getting a customer. Most of us lose money on our first sales, so making a single sale is not some great accomplishment. Building a relationship with the customer after the sale to make them a repeat customer is an accomplishment. If you don’t, they’ll treat you as a commodity and price-shop every time instead of giving you repeat business. That is a low-profit way to run a business.
As far as tracking increases in your number of referrals, I won’t touch on that much here. I talk a lot about referrals in my book “NO B.S. Guide to Maximum Customer Referrals and Retention” and in blog posts like this one. It’s a huge topic that deserves its own deep dive, so when you’re ready, seek out those resources!
The way I see it, once the sale is made, the real work begins. That’s why Tip #4 for maximizing your ROI is this: Use your newsletter to create a nurture campaign.
Crush Your Newsletter Nurture Campaign
Creating a nurture campaign with your newsletter will increase your customer retention rates and lifetime value (LTV). Both of those numbers will mean an increase in profits and a decrease in customer churn. This will really drive your business forward!
You want to use a nurture campaign to build relationships with your customers. This means you should be willing to open up and get personal to entertain, educate, and upsell. Newsletters are a great avenue for this type of campaign. But if you do it wrong, it can actually hurt your business. If you make the newsletter all about selling your product or service, people will ignore you because they will just see it as spam. That’s why the core of a newsletter is the personal article on the front page. You need to be real in it — you need to get personal.
Think about it like this: With so many business choices, be aware that what separates your business from the pack is you, your story, and your relationships. Even if you have a USP (unique selling proposition), better service, more features, or more experience in the industry, most customers don’t understand how you’re better than the next guy. But when you make a connection with a customer, you show them you’re real. You show them you care and have their best interests at heart. Creating that relationship will mean everything for your success and ROI — that’s why getting personal is Tip #5.
Apart from holding back, another major mistake I see people make with their newsletter is mailing inconsistently. When you do that, you’re telling your customers you’re not organized. Nurturing doesn’t work when you’re hit or miss. It would be like taking a girl out on a few dates and then not calling for two months and expecting her to still like you. She may not even remember who you are when you come calling again. So, there’s Tip #6 for maximizing your ROI: Mail consistently, preferably monthly.
The Moral Of The Story
We no longer live in a world where you can simply toss a call tracking number on your Yellow Pages ad and measure ROI. We haven’t lived in that world for at least 20 years! Today, we know that the journey a prospect takes to becoming a customer is long and winding. So, don’t treat your customers like items barreling down an assembly line or assume ROI is all about lead generation. That’s a problematic misconception that, if left unchecked, will ensure your business doesn’t scale. When in doubt, go back to Tip #1!