No-Load Fund Investor--Selling Steak with Sizzle
In the early 1990s, magalogs had begun to look more and more like magazines. Printed in four-color on glossy stock, they no longer seemed representative of the newsletters they were created to sell.
While copywriter Don Hauptman and his client Sheldon Jacobs, editor/publisher of The No-Load Fund Investor, liked the concept of the magalog, they were concerned that it wasn't reflective of the product that prospects would receive upon subscribing.
So Hauptman and Jacobs decided to create a hybrid of a magalog and a specimen issue that would more closely resemble the actual product. Hauptman adapted articles from issues of The No-Load Fund Investor and wrapped them in a few pages of sales copy; designer Ed Elliott, who was part of the initial wave of magalog creations, provided the graphic design.
The first version of this 10-year control mailed in November 1990, immediately beating out the previous envelope control by 11.4% in gross and by 17.3% in revenues.
Jacobs once reported that returns had come in as high as 183% of costs.
With the professional services of Hauptman and various direct mail designers, the specimen magalog has been through several careful copy and design updates since then, including the latest drop in October, but the mission has not wavered: to sell the newsletter via content, not hype.
Challenges of Selling Information
Unlike magazines and newspapers that are sold on the newsstand and have household names, newsletters are often unsung heroes. They might have tens of thousands of subscribers, but they usually are not well known to the public.
To sell newsletters via direct mail, publishers have recognized the need to share some information to sell information, says Hauptman.
This is especially important when selling an investment newsletter, because the audience consists of voracious consumers of content who will devour everything they can find.
In fact, says Hauptman, much of the competition for investment newsletter publishers now comes from the Internet, where sites like The Motley Fool package free editorial content with e-commerce. The shelf life of an investment-oriented mailing has shrunk dramatically from a year to six months to even less, says Hauptman.
For Jacobs and Hauptman, the latest specimen magalog version mailed in October was one of the more challenging revisions. The financial market scene had changed again, and Jacobs' outlook was more cautious. That position was not consistent with the bullish letter and introductory article that had been running in the specimen magalog for a few years.
"My experience is that people buy investment newsletters when the market is positive and people are buying stocks," says Hauptman.
Since Jacobs' mood had become less bullish, Hauptman needed to find a way to sell The No-Load Fund Investor without misrepresenting the editor's position.
If you have a good story to tell, you should put it on the front cover.
Ten years ago, Jacobs and Hauptman launched their specimen magalog effort with a cover that featured Jacobs holding an oversized copy of The No-Load Fund Investor specimen issue contained inside. The bold headline: "The 90's will be another high-performance decade for stocks!"
Ten years later, Hauptman and designer Iris Bell created a new cover for the October 2000 version of the specimen magalog to celebrate the accuracy of Jacobs' prediction.
Jacobs is on the cover again, this time holding the November 1990 specimen effort (shown on page 1). Note the date stamp super imposed on the November 1990 specimen mailing; it demonstrates that this is a real mailing that was dropped a decade ago. The headline on the new cover: "Ten years ago, I sent this prediction to hundreds of thousands of investors worldwide."
The copy below the cover in Jacobs' hands not only explains the headline, but sets the stage for Jacobs' current market outlook and the content to be found inside. "But be warned: Now, a decade later, the strategies of the '90s no longer work! It's a new era, and a whole new investment approach is required."
The slash in the top right-hand corner that identifies the content as "Updated 2001 strategy" also gives prospects a reason to look inside.
According to copywriter Jim Rutz, people often check the magalog's address label to confirm that the mailing is for them, so it's smart not to overlook the back cover.
Hauptman fills this hot spot with a slightly different take on the copy from the front cover, another photo of Jacobs and a table of contents with provocative editorial summaries to drive prospects to the articles inside.
The Editorial's the Draw
As compelling as the sales copy has to be, the articles are the real focus of a specimen issue.
At first glance, the role of the copywriter might look superficial, as if Hauptman did nothing more than replicate articles from The No-Load Fund Investor word for word.
In fact, Hauptman and Jacobs collaborate methodically on the selection of articles that will be the most interesting and/or remain timeless. Then, Hauptman painstakingly edits and re-purposes the content for a direct mail audience.
It's this give-and-take between copywriter and client that makes the specimen content so powerful.
To remind prospects that there is another purpose to the specimen issue, beyond that of sharing investment tips, Hauptman often puts a call to action at the end of editorial pieces that says, in effect, "If you liked this article, then you'll want to subscribe to The No-Load Fund Investor."
The current control contains 10 pages of editorial content. Some of the features are so evergreen, they've been running since the first specimen issue, but a good portion of the mailing has been updated to cover recent investment topics.
For example, says Hauptman, as people became curious about "exchange-traded funds," he and Jacobs made room for an editorial feature devoted to this hot topic.
Hauptman's guidelines for updating features in the sample issue are:
1) When material becomes out-of-date;
2) When something new comes along that is generating much attention.
Sometimes it's not an issue of what to drop, says Hauptman, but of whether you should drop any features. The specimen can always increase in sizewhich it has over the years, from 20 pages to 24 pages.
Refreshing the content is vital to keeping the specimen magalog effective. The universe for mutual fund investors is limited, explains Hauptman, so you're constantly remailing many of the same people. It's the copywriter's and designer's job to let prospects know the content's been revisedeven the evergreen material.
Another way Hauptman tweaks the magalog is to rotate the articles in the layout. For example, a story on "focus funds" appears on page five in one mailing, and on page 11 in another effort.
While other specimen magalogs or sample issues run dates on the covers to give the information a timely appearance, Hauptman and Jacobs prefer to omit the date and refer to the piece as a "complimentary sample issue" or a "special edition" only.
Other editorial touches include: the inclusion of running heads and a masthead box.
The Letter's Role
To distinguish the letter from the editorial contentespecially since it starts on page 1 and jumps to page 15it's printed on a yellow tinted background. The current version is similar to the letter copy that's been used since 1997, but with a new opening to address current investment concerns.
In the first specimen magalog, Hauptman broke up the five-page letter that introduces Jacobs and The No-Load Fund Investor with sidebars on topics like small funds versus big funds; a special offer for subscribers to competing publications; the newsletter's performance ranking among other fund publications; and subscriber testimonials.
In the past ten years, these items have been dropped or recast in other ways; for example, the testimonials have been regrouped on a single page with media reviews of Jacobs' book, "The Handbook for No-Load Fund Investors." Besides enhancing Jacobs' credibility, the reviews also promote the value of the handbook, which is one of the premiums offered.
The only sidebar remaining is a short blurb on why Jacobs doesn't have a single favorite fund.
You've Still Gotta Sell
Most investment newsletters are built around an expert like Jacobs. To sell The No-Load Fund Investor, you have to sell Jacobs.
The middle spread of the specimen magalog does just that with a selection of blurbs from leading newspapers in which Jacobs has been quoted, a biographical sketch that outlines his credentials and this large headline in red type that crosses the gutter: "USA Today calls him 'The Dean of No-Load Fund Watchers.'"
Most importantly, Hauptman includes the "Forbes/Hulbert Honor Roll" for investment newsletters, which has named The No-Load Fund Investor a total of four years out of five in its survey.
Another spread, shown at left, provides sample reference tables from issues of the newsletter with call-outs and copy that explain how to use them. This spread helps prospects understand what the product will look like when they get their first issue.
Saving the best for next-to-last, Hauptman devotes an entire page to the two premiums that accompany the one-year subscription offer. According to Jacobs, these are not your typical editorial-based premiums; they are full-length books that have been sold in bookstores. "The Handbook for No-Load Fund Investors" is in its 20th annual edition and contains more than 568 pages; Jacobs' "Guide for Successful No-Load Fund Investing" is a complete primer for investing in funds.
Getting the Order
A magalog rule that's hardly ever broken is that of putting the ordering information on the inside back cover. Hauptman's order page, shown above, is textbook, but has its own style.
The order form itself takes up maybe a quarter of the page. It includes the terms in longest to shortest rank. This is a hard offer only, so prospects must pay by check or credit card. To dramatize the discount, Hauptman squeezes a savings calculation chart onto the order form.
The remainder of the page contains lengthy promotion copy on the bonus report prospects receive for responding by the posted deadline, the guarantee and a phone number and Web address as alternative ordering options.
An interesting note: Until the mid-1990s, the guarantee had been simply added at the bottom of the order form. To give it more emphasis, Hauptman and a previous designer separated it out and put the copy in a certificate border for impact.
Secret of Its Success
Even a novice to direct mail can understand the value of being unique. At the time Jacobs and Hauptman mailed the first specimen magalog, no one else was doing anything like it.
Of course, that changed. Other publishers have mailed their own versions of the specimen-style magalogs, and some have turned out to be controls as well.
But their success has not diminished nor rivaled the achievements of Jacobs and Hauptman. Score one for those of us who believe that a good idea can be shared successfully by mailers!
Jacobs admits that he hasn't aggressively tested against the specimen magalog. He runs a small operation, and doesn't have the resources to test a slew of different packages.
Besides, he adds, the few times he did test an envelope package or something else, it didn't come remotely close to beating the specimen magalog control.
In addition to the strong premiums, Jacobs is a big believer in the representative virtues of the specimen issue. He also is convinced it produces better renewals.
Hauptman would have to agree. In his experience, the closer you get to putting the actual product in prospects' hands, the better you target and qualify your audience. Which is why this effort has been a strong performer for a decade now, and counting.