Knight I email out something every other week. Response is low on the offers, but I get lots of emails when I send them out and it is too cheap to NOT do.
My wife also sends a periodic email newsletter that gets little response to the offers, regardless of the offer. We do stock it up with promotions and upcoming events in town and at the pizzeria. We get lots of comments and replies . . . it is a relationship builder for us. As we have complete control over the content, this is a free marketing tool we use.
Even new residents of town learn quickly from neighbors to go to the website and sign up for the newsletters