Niches for newsletters.

Specialty newsletters generate cash, zero in on the needs of membership subgroups, and sometimes even serve as vehicles for reaching new audiences. The Community Associations Institute, Alexandria, Virginia, starged its first specialty newsletter in 1978 to report on trends in the legal industry. Ten years later, CAI repeated that success with two more targeted newsletters--one for accountants and one for nonprofit board members.

CAI found success with specialty newsletters not by offering them as a free service accompanying membership, but by appealing to specific market segments and selling the newsletters through separate subscriptions.

CAI is a national association for condominiums, cooperatives, and planned developments. About 60 percent of CAI members are the boards of condominium and homeowner associations. The balance of members are builders; property managers; public officials; and a "colleague" group of attorneys, accountants, insurance agents, and real estate professionals.

While CAI currently has more than 12,000 members, the association had fewer than 2,000 members in 1977, when Executive Vice President C. James Dowden saw the need for CAI's first specialty newsletter. A member survey confirmed that a member-authored column recently begun in the association's monthly newsletter was a hit. The attorney members, most of whom worked for small firms with limited libraries, said they wanted a network to share information from trial-level courts, since the established legal publishers failed to print the decisions from these lawsuits.

If CAI expanded the column in its monthly newsletter, other information could not turn, or the association would face higher production costs without offsetting income for a larger periodical. It was logical, therefore, to create a new periodical.

First efforts

CAI struck a deal with Wayne Hyatt, the author of the monthly newsletter column, to start the Community Association Law Reporter, an eight-page monthly newsletter summarizing court decisions and legislative developments. In return for a share of the profits, Hyatt and another attorney would write all the copy for the newsletter. CAI staff would handle promotion, production, and distribution.

CAI's "sustaining" members pay nearly twice the amount of dues as other members. In return, these members receive multiple copies of periodicals and single copies of new books. Thus, CAI's 500 sustaining members received the Law Reporter as a free benefit; other members received a complimentary copy of the first issue and were invited to subscribe at rates ranging from 50 percent to 100 percent of the dues they were already paying. In subsequent months, CAI mailed additional newsletters to attorney members and nonmembers.

The Law Reporter found a niche among CAI's attorney members. But promotion to nonmember attorneys has never been particularly successful; nor have nonmember subscriptions had a particularly high renewal rate. Nevertheless, the Law Reporter became profitable in its second year of publication, when subscriptions numbered 400.

Among the surprises from the Law Reporter:

* More than 50 percent of the subscribers are not attorneys. They include property managers and the boards of condominium and homeowner associations. While the writing level stays pitched to the legal professional, we do explain unusual points of law and avoid unnecessary jargon.

* A handful of states supply most of the legislative news. As a result of a 1980 reader survey, we dropped coverage of most state legislative activity and added occasional in-depth articles on legal issues.

* Members' subscription renewals have historically rund from 10 percent to 15 percent better than the membership renewal rate. That suggests the Law Reporter has bound members to the association. A 1986 member survey confirmed that the Law Reporter was one of CAI's highest-rated member services.

A new venture

The success of the Law Reporter inspired CAI staff to be alert to opportunities for other specialty newsletters. In the mid-1980s, CAI's accountant members became more active in the association. They elected an accountant to the board of trustees, organized workshops, and formed a network. In response, CAI prodded the American Institute of Certified Public Accountants, New York City, to form a committee to develop accounting and auditing standards for community associations. Soon, attendance by CPAs rose at CAI's national conferences, workshops began attracting significant numbers of nonmember accountants, and two states enacted laws that required larger community associations to undergo CPA audits or reviews. If there was still any doubt, a general CAI membership survey confirmed there was a demand for an accounting-oriented newsletter.

CAI staff prepared a feasibility study for a financial management newsletter. It showed income and expenses under several sets of assumptions, identifying the maximum investment risk and projecting an acceptable cost recovery period. CAI's board approved the newsletter, later named The Ledger Quarterly.

Staff brainstormed a laundry list of potential articles, based on technical questions from members and discussions at committee meetings, workshops, and conferences. Unlike lawyers, however, accountants are not trained as writers. Whereas the Law Reporter basically digested existing case material, The Ledger Quarterly required significant original writing. Previous attempts to get accountant members to share responsibility for a proposed column in the monthly association newsletter fell flat. Thus, we knew the search for an editor/writer of a new specialty newsletter would be difficult.

After two years of searching for an editor, a potential author came forward. We were encouraged because he had written a self-published text and had credentials with the California Society of CPAs, Sacramento. In short, he was a reliable writer with a promotable background.

We learned from our previous venture to write a contract that included specifies on deadlines and editorial control (see sidebar, "Contract Basics"). The editorial fee was a flat rate, rather than on a profit-sharing basis. Future profits were guarded until subscription levels ensured recovery of our investment and continued success.

We kept promotion for the newsletter simple--a one-page fyer, a poster display at our national conference, and an article and order form in our membership newsletter. Members in relevant groups received the first issue free, along with a letter and order form. Nonmember promotion was limited to CPA lists in a few states that had high concentrations of condominium development.

Some subscribers and nonsubscribers to the Law Reporter had complained about the $9 per issue ($108 per year) price for the eight-page monthly newsletter. Thus, we anguished over pricing The Ledger Quarterly before settling on $36 per year for members and $48 for nonmembers.

We didn't encounter any price resistance for the The Ledger Quarterly, although it too was only eight pages. By the second issue, we had more than 400 subscriptions, putting us one year ahead of schedule for income and in a position to break even and begin recovering an investment of less than $10,000 at the end of the second year.

Besides the quick subscription sign-up, unexpected developments from starting The Ledger Quarterly were

* Attendance by accountants at our conference slightly wanted. One possible conclusion for the drop in attendance is that the newsletter replaced the need for informal diaglogue that had previously motivated accountant members to attend the national conference.

* Contrary to our unsuccessful experience in getting accountants to write for the association's general newsletter, we received an increase in unsolicited manuscripts from accountants. Some articles were general enough for use in the membership magazine; others met the technical standards for The Ledger Quarterly.

A lay-member service

CAI's multi-interest-group composition requires attention to many diverse needs. During the past 10 years, CAI has addressed those specialized needs through targeted conferences, workshops, designation programs, and periodicals. Even the launching of CAI's membership magazine was primarily driven to meet the needs of the association's professional members. As a result, some discontent surfaced among the lay members--the volunteer boards of condominium and homeowner associations that make up nearly 60 percent of CAI's membership. A CAI member survey, for example, revealed that these members rated the membership newsletter more favorably than the magazine.

CAI's lay members paid the lowest dues and had the least spending discretion for optional subscriptions and educational events. Typically, condominium boards even debate and vote on the decision to renew CAI membership. Another subscription newsletter was out of the question.

At the same time CAI was feeling the need to address lay-member concerns, pressure was building for a dues increase. CAI staff proposed the coupling of a dues increase with a new automatic member service for the lay group: a four-page, bimonthly newsletter. Starr wrote short articles and checklists for the newsletter, dubbed Baords Briefs. The concerns of the audience--similar to PTAs, hospital boards, or trade association boards--were leadership, dealing with people and internal politics, and helping them evaluate management or save dollar.

The budget committee, which had turned down this newsletter proposal for two consecutive years, bought it the third time because the increased service helped justify a dues increase. It also helped that staff projected some revenue from selling subscriptions to nonmembers and to professional members. Nonmember subscriptions, in particular, were seen as a way to attract future members by hooking them initially with a low-ticket product.

Since members had not asked specifically for Board Briefs, we enclosed a reader survey in the first issue and asked them to evaluate its content and style and to rate their need for future topics.

The response was overwhelming. Typical comments were, "Just what we needed," and "How did you know we didn't have time to read long articles and big magazines?" The bread-and-butter segment of the membership felt the association had understood and met their needs.

Just in time

Starting two specialty newsletters in one year was a big task. While the publications staff took it in stride (and handled a conversion to desktop publishing at the same time), the marketing department could have used more time to promote subscriptions. And the administrative staff needed more time than we anticipated to prepare accounting procedures and adapt membership records to accommodate two new periodicals.

From a member service standpoint, however, these periodicals came in the nick of time. For the accountants, The Ledger Quarterly provided a forum to address changing rules and emerging methods of practice. And for the largest segment of CAI's membership, Board Briefs told them they were important--their association was listening and anticipating their needs.

Douglas M. Kleine is executive vice president of the Soil and Water Conservation Society, Ankeny, Iowa. From 1979 to 1990, he worked for the Community Associations Institute, Alexandria, Virginia, most recently as senior staff vice president. For information about related topics or ASAE's Communication Section, call Sheryl' Morton at [phone]. ASAE's PR/Communication Symposium is June 25-26 in Washington, D.C. For details, call Cindy Fellows at [phone].