The salutation of a business letter is something the reader will see before reading the rest of the letter. A badly written salutation can offend the reader and set a bad tone for the rest of the letter. Typically, you should take a formal and respectful approach when drafting a business letter salutation. If you're unsure, addressing someone by their title and last name is always appropriate. There may be instances, however, where first names can be used in business letters.
Rule of Thumb
In general, people are addressed by title and last name in business correspondence. This is the most formal and traditional way to address a business letter, including business letters through email. However, it is acceptable to use a first name in some cases. No matter how you choose to address a person in the business letter, a colon typically is used after any salutation.
If you are on a first-name basis with the person to whom you are addressing the letter, it is generally acceptable to address the person by his first name in your letter as well. Additionally, you can take cues from previous correspondence from the business contact to figure out whether or not you can use a first name. For example, it is acceptable to address a person by first name in business letters if he has sent correspondence to you and signed it using his first name. This is an indication that you can use a more informal approach.
When you are writing to someone you have never met and the first name is ambiguous, like Pat, Leslie or Chris, you may address the business letter by first and last name to avoid using a gender-specific title incorrectly. Other gender-neutral greetings may be used instead that avoid the name altogether, such as "To Whom It May Concern" or "Dear Sir or Madam."
When Not to Use First Names
A business letter that is formal or legal in nature should always be addressed by title and last name, regardless of familiarity with the reader. When addressing females, the writer should never assume marital status; the neutral term "Ms." should be used unless the woman has specifically implied she prefers "Mrs." by using it in her own business correspondence or by telling you. If the person has a professional title, such as "Dr.," it is always best to use this title.