Ford Motor Company is widely considered to be an outstanding practitioner of social media marketing. Under the leadership of Scott Monty (more than 36,000 followers on Twitter), the company has created such innovations as multimedia Ford Story website and consumer-generated Fiesta Movement (right).

So I was a little surprised recently when Scott Monty told me, “Most of the mainstream still relies on e-mail. Newsletters will be a big part of our strategy for 2010.”

Newsletters? E-mail? Isn’t that stuff so last millennium? In fact, e-mail continues to be the killer app of social media. E-marketer reported last month that “e-mail was the top channel for distributing content to friends, with 46.4% of all shares. About one-third of shares went to Facebook and less than 6% were tweeted.”

The Pew Internet & American Life Project reported last fall that more people use the Internet for e-mail than for any other activity, including search.

So allow me to sing the praises of e-mail as an engagement medium. Note I didn’t say “marketing medium.” Every marketer I’ve spoken to for the last two years has told me that e-mail blasts are delivering fewer and fewer quality results. E-mail newsletters, however, continue to be a core to their strategies. Here’s why.

Social media provides a great opportunity to create awareness among groups of people you don’t know, but they pale next to e-mail’s capacity to sustain relationships. My newsletter consumes about four hours of my time each week, which is not a small investment. However, it’s an invaluable way to sustain important relationships and a pretty steady source of new business. About 30% of my subscribers open each issue and I invariably get at least four or five direct responses as well as several comments to the blog. The newsletter also generates at least a couple of new business leads every month.

E-mail has one critical advantage over all social media: it’s permission-based. By subscribing to my newsletter, you give me permission to periodically intrude upon your inbox with a message that I hope is of interest to you. Your inbox is hallowed ground to me. While I don’t take unsubscribes personally, I do monitor them for evidence that my topics are going off-base. I respond to every reply I receive to a newsletter and I take those comments seriously. Anyone who takes the time to subscribe deserves my attention.

So let’s abstract this back to a business newsletter. I believe every company should have one. The subscription form on your site creates the opportunity to convert casual visits into conversations. It’s a chance to enhance visitors’ understanding of what you do, update them on new initiatives and demonstrate your value. A static website should catch attention; a newsletter should create a dialogue.

Think Different (As Apple Would Say)

You should think differently about newsletters than you do about other forms of communication. For one thing, you should make the message more personal. Your newsletter subscribers have a deeper interest in what you do than casual Web visitors. Give them your best stuff.

Subscribers should get value from a newsletter that they don’t get from a website or e-mail blast. That may be insight, an offer, an advance peek at something new or an invitation. If subscribers don’t get something special, why should they bother subscribing?

Newsletters are an excellent place to pull together your recent activities and show how your business is moving forward. Speak personally; this is a conversation, not an advertisement. Ask someone in your company to share a bit of expertise. Preview some new research before sharing it with the world. Give subscribers an exclusive discount. Share a behind-the-scenes look at a product or service that the rest of the world doesn’t get to see.

Always invite response. The “Reply” button is the fastest way to establish a dialogue. You might also give people the option to post their comments publicly on your blog or via Twitter hash tag.

When people respond, return the favor. I can’t emphasize this enough. Your newsletter is a way to convert an impression into a relationship. Why would you fumble away an opportunity for interaction? And when I say respond, I don’t mean with a boilerplate message. Better not to respond at all than to leave the task to a robot.

I subscribe to a lot of newsletters just to keep an eye on what others are doing. I’m often amazed at how little attention businesses pay to optimizing the potential of their newsletters. Airlines, for example, fill my inbox with discounts and package deals. I can’t remember the last time one of them invited my feedback or tried to help me be a better traveler. Perhaps that’s why I don’t subscribe to many airline newsletters anymore.

What ideas have worked for your newsletters? Let’s keep the dialogue going by sharing some successes in the comments area below.