newsletter growth

Let me hearken back a couple of years (2005, actually).  Lenny Dykstra, star baseball player, has been tapped by Jim Cramer’s TheStreet.com to start writing a financial column.  More, he started writing about options strategies.

Personal Brand Newsletter

The marketing was tight — Cramer and Co. was looking to market a premium newsletter ($995/yr) off of Dykstra’s brand as top athlete parlaying his success on the baseball diamond into options strategies (Dykstra actually wrote about buying deep-in-the-money call options).  This is a common strategy in product marketing — leveraging a famous personality to sell products off of.

What happened?

TheStreet.com (well, Cramer specifically) marketed the crap out of Dykstra and pumped sales to his newsletter to the tune of $1M.  More than that, by marketing Dykstra the way he did, Cramer and the Street in general took reputational risk.  From the video above, Cramer said things like, “He is the one of the great ones… a guy who applied the same skills to money that he applied to sports, it’s brilliant.” Cramer added that there are only “four or five” people in the world he would take stock picks from—and Dykstra was one of them.

Well.  Dykstra blew up when readers began to see that he was falsifying returns, he became personally insolvent, and as Randall Lane describes in his new book, The Zeroes: My Misadventures in the Decade Wall Street Went Insane, Dykstra also pulled the wool over everyone’s eyes, including accepting stock in return for touting a stock pick on TheStreet.com and providing access to Cramer.  That’s bad news.

The Moral

First, check out author Lane’s DailyBeast editorial for more of the sordid details.  But what’s really important for us — for newsletter writers, publishers, and marketers, is reputational capital.  It can take years to build (for Dykstra it took an all-star baseball career) and can be toppled very quickly.

If you are running a newsletter that plays off of anyone’s personality (including your own), you need to understand the risks that you’re taking.  It’s a double-edged sword: as you build your personal brand and expertise, that typically results in increased sales.  But anything you do that jeopardizes that brand (front-running, shady partnerships, etc.) can be disastrous for your business.

Learn from Nails how NOT to do it.

Are you including charts and technical analysis in your newsletter? Think about adding some screencasting functionality. There are really easy ways to turn a static chart into a multimedia analysis of a stock, complete with audio and video. Check out the video below for an easy way to get started.

Earlier this week I was trying to get my three year old to share with his older sister.  Reasoning with him can be bewildering but the main concept I was trying to convey was that sometimes, we need to give a little to get a little.  This feeling of reciprocity drives a lot of our reactions in relationships.  Investment newsletter businesses are built on relationships.

So, successful marketing in our line of work is about building and expanding these relationships.  Websites are great for providing readers with our value proposition and a smattering of our actual work.  But sites struggle in the relationship thing.  Why?  Simply.  Because readers haven’t given anything up yet.

Giving and getting: part of our nature

The simple act of exchange — where a reader gives his email address in return for a subscription to content (free or whatever) — creates a bond and takes the relationship to another level.  Trust is established and a channel of communication opened that didn’t exist there before.  This makes it all the more likely that this reader decides to shell out some of his or her hard-earned cash for your products/services in the future.

ecommerce firms understand this well and see conversion rates (the percentage of readers buying somthing from you) much higher over email marketing than just typical website traffic.

According to Forrester:

89% of retailers cited email is the most mentioned successful tactic overall.- Forrester Research and Shop.org “Retailing Online 2009: Marketing Report’ (2009)

Email works.  So how to build an email list for your investment service/newsletter?

ebooks still work

So, we want to quickly move readers from merely browsing our sites to subscribers of something.  We want that email address and need to provide something of value in return.  Newsletters work well for signups but giving away an ebook works even better to capture that email.

Building an email list of opt-in subscribers is key to marketing and selling your premium investment products.

David Merman Scott, columnist for the NY Times and celebrated new media author, agrees that ebooks are great.  He says of ebooks:

Ebooks are the hip and stylish younger sister of the nerdy white paper.

White papers are used by companies to explain their technologies or trends in their industries. Frequently, as Scott says, they are nerdy.

But ebooks are more flexible.

We want to tell our story in an interesting way.  Weave a story.  Explain why the 3 stocks you think are going to profit next year deserve their attention.  Explain how you arrived at your decisions.  Describe in personal terms your investment process.

5 simple ideas for ebooks

Here are 5 simple ideas for ebooks for you to produce (to get your creative juices flowing):

• Top 11 stock picks for 2011/2012 (lists are great)
• Why the world is not going to melt down and how you can profit (contrarian ideas that cause some dissonance work well)
• Homerun stock X that could be the next Google (careful about over-promising but tying something in to another thing that people are familiar with is a good technique)
• Warren Buffett and the Coming Railroad Bust (mentioning guru investors gets people’s attention)
• Retirement investing: the biggest myths and how not to fall into the income trap (people want to avoid mistakes)

You’ll have to come up with the right title and approach that fits your writing style and investment strategies.  I’ve used very salesy titles just for illustration (it’s not my style but they work in certain cases).  Figure out what type of subscriber you want and write the ebook that he’d like to read.

Word of caution: Scott has grown tired of promises to give compelling content followed up by poor, gobbleygook writing.  If you are going to offer content and expect an email in return, do it write right.

2nd word of caution: Scott’s a PR guy.  He would rather see you provide a great ebook and not require email signup.  He faults white papers for their focus on sales.  You’re running a business and it will be important to get money in return for your time and work.  Decide whether making your ebook freely available for download makes sense.

A lot of people come to me asking how they can jumpstart sales of their financial product.

There is a prevailing sentiment in the financial products industry that I like to call the Field of Dreams Marketing Strategy.  Anyone who has seen or heard of the classic baseball film with Kevin Costner knows the line “build it and they will come.”

Ray builds a baseball stadium in Nowheresville, Iowa hoping — praying — that both players and fans will come out of nowhere to attend and play. It turns out that they do but I don’t think waiting upon a miracle — what actually occurs in the movie — is a great marketing and sales strategy.

Many newsletter publishers employ the same line of thinking.  They’ve built the darn thing, invested time, money and energy in its development and then wait.  And wait.

Don’t just do something, sit there

You don’t have to go out and hire a swanky PR firm to get the word out.  If you’ve produced something of value, people want to hear from you.

Here are a few things you should be doing to build your newsletter

• Start blogging, blogging, and blogging:  People interested in your newsletter will find you.
• Cold call (email) journalists: pitch a story based on something you’ve recently written.  Writers need content and handpicked stories work well.
• Use HARO – the Help a Reporter Out website lists journalists looking for sources of information for stories their writing.  By helping out a writer, you get free PR and they get help with a story.
• Syndicate some free content: Yes, sometimes you have to give to ultimately get and newsletters I’ve worked with do really well when they create free content to give to other sites to publish.  You leverage the other sites’ readership and bring some more followers over to you — you’re increasing the circumference of the sales funnel.
• Comp a sub to influential people: While you shouldn’t build a business by giving away what you charge for, selectively giving complimentary subscriptions to influential people (journos, bloggers, analysts) can generate more back end sales than you’ve given away.
• Write a book: Even if it’s an ebook or short-form work, anything that contributes to your authority helps sells.  It’s a longer-cycle thing, but still contributes to the cause.
• Interview experts for inclusion in the newsletter: While experts happen to enjoy talking (especially about themselves), good interviews make good reading for investors.  Not only do you get someone else to practically write an investment case for you, experts will most likely mention their participation in your product.

Don’t just sit and wait — hoping that someone may stumble across your work and happen to shell out some hard-earned cash for it.  You’ve got to build the field yourself and then ensure people show up for the Big Game.