I always see things differently so here goes.
Entertain. Make people look forward to it. In my business, I used to have a newsletter and we would include a lead article that was educational, a side article that was weird and wacky, a bizarre patent was highlighted, there was local news tid bits and then, most important for me (but not the reader) a little article highlighting our firm's brilliant performance.
The order was always the same with the lead article followed by the wacky followed by we're great followed by local and then the bizarre patent. It made for entertainment and education. People complained when we stopped it.
Too many service businesses lose sight of entertainment as the main delivery medium for news and marketing.
My simple tip would be have great content. If you can customize it for each person receiving it, that's even better.
Another tip is to make sure there's an easy unsubscribe option. Most major providers like Constant Contact and MailChimp have this but it's also something you should have if you send out your own. Otherwise, it may get your email server blacklisted if a lot of people flag you as spam.
1. Content: Like Chris has said, content is the most important part of any promotion - But don't stuff it with too much info. Less is more when it comes to online reading - so be creative with what you say, but keep it short, simple and clear. A call to action at the end is a great way to tell the recipients what to do next - like "Click here", "Buy now", "Leave a comment" and so on.
2. Opt-in lists: Apart from the content, there are some technical aspects to check. The quality of the recipient list matters. If you send a mail to a purchased list, prepare yourself for the lowest results. They will all go to the spam box and your server might be blocked by email clients. Opt-in lists are better: that is your recipients know who you are and are actually expecting mails from you.
3. Measuring performance: Now you have prepared great content and sent it to a quality list. How do you measure performance? Don't check the open rates. They don't tell you much. Check the click rates and real email responses and unsubscription rates. Those are the real tools to check if your emails have been effective. For example, if a 100 people out of a total of 150 opened your mails and only 20 clicked stuff in the mail, it is not so "effective" as another campaign where about 70 out of 150 opened and 60 of them clicked stuff in the mail. It denotes more, interaction, whereas open rates are more like "Okay, they opened it,so what?".
More opens might mean that your subject line is good, among many other things. But not enough to measure performance.
So crisp content, good sender reputation, opt-in recipient lists and measuring performance with click rates/responses are some tips for an effective email campaign.
Just like the other two answers, I would have to say content first. The content needs to be relevant, interesting and easy to read and digest. You don't want to pack the newsletter with too much content, so it just seems overwhelming for someone to read. Also, it is important to realize that the amount of time someone will spend reading your newsletter is minimal. Therefore whatever content you do add should be there for a reason.
Design is also imperative to creating an effective email newsletter. While content is king, you need the newsletter designed in a way that is appealing to the eye so users are able to read without anything getting in the way.
The biggest learning curve for me with an effective email newsletter was recognizing a newsletter is your teaching tool. Teach with your content. People sign up for newsletters to learn something. It is your content. Keep it simple, effective, help people learn and you will increased opt-ins.
Inspire. Inform. Educate. Entertain. Whatever is uppermost as your brand's platform, center meaningful content around that. For instance: a yoga studio might want to focus various newsletter issues on subjects like soft tissue injuries/recovery, winter wellness tips, the importance of stretching, etc.
In my case, since my service centers on personal/planetary evolution, my newsletters discuss the latest aspects of the shift, quoting other resources liberally (*always* with attribution). I make sure those whose work I reference know about it, so they can send the newsletter to their own lists if they choose.
Compelling images help, too.
Decide which content management system (CMS) to use, if any. I used Constant Contact for years but found it to be a cost center with little additional value except for performance metrics, so now I host the newsletter on my own site.
Next, I network the online link in all social media, because this enables me to reach many people who are not subscribers.
Finally, as Sarah points out, have an opt-in list (meaning people choose to sign up to receive your offerings) and make it just as easy to opt-out as to opt-in. Buying lists is fairly useless for most businesses; we all get enough spam as it is!
Hope this is helpful. If you want to take a look at my newsletter, you'll find it at http://www.liveyourlight.com/WhatShines.html
I will keep this simple as the others have made very good points. This is a process that is never done.
Relevant content is a must, know your reader.
Reliable you must send your eNewsletter on a regular schedule and don't over load your recipients.
Response are your recipients responding to you? Measure, track and modify as needed.
yes. opt in--NOT opt out--otherwise you are sending spam. Nobody likes a spammer. Why not distribute newsletter on your company Facebook, LinkedIn, Twitter page? Then those who want to read it can do so.
You've already been given some great advice here already. I will just like to add that you will need to do your research well to find an email service provide that provides all the necessary tools that you need to monitor and determine your ROI and that you can afford their prices as your mailing list increases. It's better and safer to find the right provider from the start than changing providers along the way.
Focus on providing great content and not on things like having a beautiful html newsletter. I have seen some great newsletter that are text only and have large number of subscribers. Even if you're offering awesome content in your newsletter, don't stuff it with too much information. Let your information be in bite sizes and always link back to your website.