Dos and Don'ts in Today's Canadian List Market

Direct Magazine

DECEMBER 16, 2008 - The old adage still holds true: marketing into Canada can mean adding an ideal test market to your direct mail efforts. With a population of over 30 million people – the majority of whom are located close to the US border and who spend over $12 billion annually on direct response – Canada can be a great market opportunity for US marketers.

But as always, the truism carries a range of caveats – whether it be the differences in list availability or the disparate regulatory and cultural environments, it makes sense to get smart about Canada before trying this potentially lucrative, California-sized market on for size.

DO Anticipate a Less Saturated Marketplace – and Better Response Rates

So what's happening north of the border? Well, it's quite a different scenario.

One would expect Canada to have a proportionately similar ratio of offers and mailings to households as in the US – in the order of a dozen or so mail offers per day.

In actual fact, Canada Post delivers an average of just two items of addressed mail and one item of unaddressed mail daily to each Canadian household. Cornerstone's experience tells the same story – Canada is an under-exploited market. As managers of over 70% of the DM lists available in Canada, we are able to monitor the majority of list rental numbers in this country – and they invariably show that list usage rates are lower here than in the US. And anecdotally, list managers and list brokers confirm that this comparative offer-scarcity in Canada can and often does translate into better results.

DON'T Expect the Same Regulatory Environment

The most significant law to direct marketers, which governs the areas of privacy, telemarketing and consumer protection regulations, is the federal Personal Information Protection and Electronic Documents Act (PIPEDA) introduced in 2004. PIPEDA applies in seven out of ten provinces, and while British Columbia, Alberta and Quebec opted to pass their own legislation, it is substantially similar to PIPEDA. Among other requirements, PIPEDA requires organizations to obtain consent for the collection, use and disclosure of personal information in the course of commercial activity. Unlike most US privacy laws, however, PIPEDA is a principle-based legal framework, whose chief administrator, the Privacy Commissioner Canada, takes action based on complaints with the objective of arbitrating conflict and disciplining marketers who fail to use compliant business practices.

The Canadian National Do Not Call List became operational in September 2008 to carry out the same mandate as the US Do Not Call registry: to reduce unwanted telemarketing calls by allowing consumers to register their phone number with the service. Enforceable under the Telecommunications Act, there are significant financial penalties for non-compliance; again, very similar to the US system.

Obviously it's critical for US firms marketing into Canada to comply with applicable laws, particularly in the area of privacy, in order to protect their organizations from both legal and reputational risk. A recent study showed that in Canada, corporate reputation is nearly as important as product price for many shoppers. Moreover, nearly half (49%) of Canadians surveyed said they are likely to refuse to buy a product from a company they’ve heard negative news about.

DO Modify Your Offer to Capitalize on Differences in Culture

But some significant differences exist as well. As a US marketer in Canada it will for example pay to observe Canadian spelling – so use colour, not color, and neighbour, not neighbor. Make sure you go to market in the right currency – CND versus USD – and observe the metric system as opposed to the imperial system.

Importantly for mailers, differences in culture are perhaps even more considerable; here is a summary to get you thinking in the right direction.

There are two dominant language and cultural groups living in Canada: Anglophone and Francophone Canadians. The majority of people living in Quebec are francophone, and their culture has remained quite distinct from that of the rest of the country. As a result, marketing offers require adaptation to the Quebec market (as opposed to simple translation), in order to appeal to this unique target audience.

You should also anticipate major differences in values when you mail across the border. A key point is that Canadians tend not to respond to appeals with a strong patriotic focus – thanks to an evolutionary versus revolutionary origin as a country. Further, a history of democratic socialism means that appeals to liberal social values such as wealth redistribution, universal health care and multiculturalism can work well in Canada while they may not in the US.

As so much of the Canadian population lives close to the United States with exposure to significant amounts of US media, Canadians are not averse to US marketers. However, those US marketers that can demonstrate respect for Canadian differences through their creative, offers and customer care generally achieve greater success and avoid being seen as culturally myopic.

DON'T Underestimate the Power of Using Local Expertise

Clearly, working with a supplier who has depth and breadth of expertise in Canadian direct response media as well as a good grasp of regulatory issues can give you an immediate leg up in your efforts. To find reputable suppliers that possess that expertise, along with significant size and bench strength, consult the Canadian Marketing Association's Membership Directory: http://cma.telegramcommunications.com/.

CANADA: The Final Tally

And rest assured that there are still more similarities than differences when you compare the US list market to the Canadian one. Your list of best practices and learnings apply equally when mailing in Canada – no need to rethink the basics of success, like rigorous customer profiling and knowledge, offer relevancy and test-and-learn techniques.

The current global economic crisis paradoxically represents a renewed opportunity for US mailers north of the border: comparatively more cautious borrowing habits and better-regulated financial markets have buffered job and retail losses in Canada as compared to the credit blood-bath occurring in the US.

Taken together these factors put Canada in a positive light: for the foreseeable future; the great white north promises to remain a stable and reliable market for US mailers with solid opportunities for entry.

Stuart Young has more than 20 years of international senior management experience in sales and marketing. Prior to joining the Cornerstone Group of Companies, Stuart held senior positions within a multinational promotion-fulfillment company in both Canada and the UK, as well as with leading marketing services provider ICOM Information & Communications. Stuart's broad range of skills in sales, marketing and general management was acquired in working across the Canadian, US and UK markets. Stuart currently heads Cornerstone's List Brokerage, List Management and Data Products units, leading the delivery of services to some of North America's largest direct marketers, as well as managing two of Canada's largest national databases, Info-direct™ and Universe Canada.™ Stuart holds an MBA in marketing from York University.

Contact Stuart at syoung@cstonecanada.com or +1-416-932-9555, Ext. 348.