A Guide to Direct Mail in Canada

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Direct Mail strategies that work consistently in the US tend to work in other Western societies. But the implementation process takes a different route. Canada is an example of different implementation processes that experienced direct marketers should consider before undertaking any mailing in this country.

At the time of this writing, high tariffs to produce mail in the US encourages mailers to print and mail in Canada. This is one reason why local direct mail houses and large US firms like RR Donnelley do a significant volume of direct mail in Canada. 

There is a national goods and services tax of 5% and a Provincial Sales tax 7% on production in British Columbia. No Provincial sales tax is charged on postage, but there is a 5% GST tax con postage.

One advantage to mailing in Canada is the exchange rate. At this time, every $US is worth $1.32 Canadian. Spending $100,000 Canadian dollars on mail equals $75,000 US Dollars. 

The first thing to consider is that all compiled names in Canada emanate from Canada Post. The strict privacy laws and their unique access to the Canadian census forms the nexus of available compiled names.

Canada Post offers an internal targeting service that was established about 5 years ago. For a fee, they create customer profiles using client databases to target names using demographics and Prizm 5 analytics. Home ownership, annual income, household composition, type of dwelling and so on are indexed for accurate targeting. There are well over 100 data points for each address for a file totaling 14 million address in the country.

Response lists are small and often not worth testing for some mailers due to inadequate scalability. Compiled names from Canada Post offer the primary list source for Canadian prospect mailings

When working with US or Canadian based printers, they should have a strong working relationship with Canada Post. Some large printers in Canada actually perform their own analytics having direct online access to the Canada Post files.

Another difference between US and Canadian mail are the three categories of available postage in Canada. Here are the three types of Canadian bulk mail.

  1. Neighborhood mail (NM) that distributes mail without a name or address. The price per piece is C$ .092 per piece. Postal code selection is available with clusters of 20 addresses per code in urban areas and up to 2000 addresses in rural areas. Targeting consists of all the same variable as the more expensive mailing categories listed below. But the targeting is done at the postal code level and not per household. the lack of addresses and names means that these files are not purgeable or able to delete no mail names or existing customers.

  2. Postal Code Targeting (PCT) allows the use of addresses but no names. The cost per piece is C$ 0.281 per piece. The advantages over neighborhood mail other than an actual address is the ability to make selections at the household level. The improves targetability and makes the list purgeable by deleting customers from prospect mailings and other house file names such as inquiries that require a different treatment than prospects.

  3.  Personalized Mail (PM) offers the same benefits as standard mail in the US with names and addresses. The cost per piece is C$ 0.3638 per piece. As with PCT, the names are targetable at the household level and purgeable.

There are other interesting aspects beyond the Canadian list selection processes. For example, the postage meters are customizable at no added cost with the sender’s company logo. One additional benefit is that compiled list rentals are included in the postage costs.

As for the creative executions, the formats, offers and language are identical to the US. the only exception are the spellings that follow European English norms such colour instead of color. If mailing in Québec, of course, the creative should be sent either as English with French running parallel or French only.

I hope you found this Canadian mail primer helpful Please let me know if you have questions or need support with your direct mail planning and creative development.

Posted on April 17, 2019 and filed under Planning, Direct Marketing Strategy, Direct Mail.

Three Deadly Direct Mail Myths

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The direct marketing principles in this article apply to other direct channels such as print, DRTV and permission email. These principles are generally accepted by direct marketing professionals who know what they know through empirical testing. In other words, for direct marketers, this knowledge does not come from customer surveys where customers say one thing but do the opposite when they pull out their checkbooks. But rather these answers are based on actual behavior and results taken from thousands of direct response tests performed across virtually every industry and audience.

1. Great creative execution is as important to a successful direct marketing program as the offer.

This is false.

A great offer will out pull almost any well executed creative execution.

Brawn wins over beauty in direct response marketing. In fact, slickness often reduces response. But all things being equal, make your offer easy to understand. Match it with well thought out benefit copy to show the prospect how to win by buying your product.

2. Words like FREE and INTRODUCTORY are so overused they have lost their effectiveness.

Again, this is false.

These words continue to increase response as they have for generations. I do believe, as some have concluded, that a good brand has become more important than ever in a world overflowing with new products. But wisely incorporate news and compelling FREE offers if given the opportunity.

For one high-end jewelry retailer, we overcame the concern we had about weakening the brand with words like FREE by converting the FREE offer into a Gift Certificate. The offer was a $100 free gift certificate for any past customer who purchased over $500 or more of product in a single visit if purchased within the next 30 days. It was the most successful traffic builder they had ever created.

3. Successful direct marketing copy should strive for brevity above all, because the audience of today has little time to read.

The opposite is true. Longer copy that spells out the benefits for responding to your offer now gets higher response rates. Oh, but you might say, my executive customers and professionals don't have the time to go through that much copy!

That seems logical, but long copy pulls better because your copy must neutralize buyer resistance.

Therein lies the key - the buying audience. This is the group that will actually respond to you and not everyone who receives your message. You are talking in full only to those prospects who intend to buy or respond to you for more information. Those .03%-2% of the direct mail recipients will actually read much of the copy. The balance of the recipients will scan your headline and your offer deciding not to proceed further.

Added to that, you want to do all you can to address your buying audience's questions and objections right then. It will often be your only chance to make the sale.This applies to all audiences.

I have tested long versus short copy across many professions and demographics. This included working moms, high-level executives, insurance sales representatives and physicians. The tests came back with the same answer. Write the complete story., even if it requires a lot of copy.

In future posts, I will address other assumptions about direct marketing creative work that hamstring direct mail efforts.

Posted on January 5, 2019 and filed under Direct Mail.

Companies to Customers: "Don't Bother Us By Calling!"

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Have you noticed how difficult it is to find a customer service phone number these days? They give you email, Chat, and links. But your questions are complex and difficult to resolve. Your questions require a phone call to cut through the information maze.

Let’s get down to everyday reality for a few seconds. The problem gets worse when you decide to buy.

It’s as if the business world were conspiring together to keep you from spending your money.

You search the manufacturer’s website for the contact information. But you search in vain for that sales phone number. In many instances, you will never find the contact address or phone number because it isn’t there. If it exists on the website, it is often hidden under layers of clicks.

I think that many companies today make it quite clear they DO NOT WANT TO TALK TO YOU.

Companies apply the same losing approach to existing customers. This kills present and future sales to save money.

The company actually increases it's sales costs when their product finally does sell. Such behavior reduces sales. Frustrated customers call the service or warranty departments rather than sales.

That’s a no-go because you do not have the product serial number allowing you access to a live person.

If you're a customer, the problem continues. The service group wants you to pay a service fee for product support first before they will talk with you.

This bad behavior weakens brands and causes the loss of many customers.

Why are companies so inept at customer service? Don’t they get it? Will they stay in business or prosper for long in a society that demands service above all? In your view, do companies understand that the prospect and customer are the bosses?  

Posted on July 3, 2018 and filed under Branding, New Business.

The Direct Marketer's Core Strategy: The Marketing Allowable

Customer Acquisition Allowable

Use marketing allowables to develop your marketing budget rather than a percentage of sales.

This focuses your budget on your most profitable customers and less on what's left over. Drive your plans using a single evaluation process to create successful marketing programs.

For example, if your customer marketing acquisition is $200 for each new customer. And your business plan calls for 10,000 new customers to make plan. Your total budget for acquisition becomes a matter of simple arithmetic.

$200 per customer X 10,000 new customers = $2,000,000

Your promotion, staffing, fulfillment, product deliveries, returns, phone support and and other related marketing costs for customer acquisition fall within this $2,000,000 budget.

You will also want to develop a customer retention allowable to add to your budget.

Keep it as simple as possible by quantifying your financial goals. Then determine the customer mix you need to achieve those goals.

This simple concept makes a lot of sense to CMOs, CFOs and CEOs. The devil lies in the development and agreement on the allowable details.

The customer lifetime value drives the creation of a reliable allowable. Most companies save the needed information to calculate customer lifetime value.

1. Average sale for all customers

2. Average profit margin per average sale

3. Average number of annual sales

4. Number of years and months the average customer remains active

5. The above information yields the average lifetime value of a new customer

Once you have the lifetime value, then the CFO or someone on his team calculates the allowables. His team will include present cost versus future value to come with the final allowables.

So far, my discussion revolves around the vital role of the allowable in preparing the marketing budget. The allowable plays a critical role in evaluating channel mix, offers, and creative executions. It can ven help divide the budget by marketing strategy such as social media support for traditional campaigns.

Through testing, how does TV or direct mail alone perform without the support of outbound telemarketing? How is social media contributing to acquisition or retention? Are we spending beyond our allowables? What mix performs best based on the allowables.

We must work to find ways to quantify all marketing spends. The first step is to create a reliable evaluation KPI. I know the allowable remains the Key Performance Indicator for all marketing activity.

How to Beat Direct Mail Controls

Creating a direct mail test package

Creating a direct mail test package

If you are like most direct mail creative people, you've lost more than you've won.

Some super controls have resisted many attempts to beat them. The discouraging part is that those direct mail winners often look unlikely to win.

They follow the rules, but seem to lack the creative spark that separate them from the pack. So how do you beat them?

I think the secret lies within the offer itself. This is what makes the target audience respond to mail for high response rates. Repositioning the offer may make a big difference. For example, "two for one," "50% off" and "half price" represent the same offer. This repositioning alone may make the difference between success and failure.

Format also plays an important role

Test envelope formats containing a personalized letter and response form with a simple flyer. Stay away from heavy dependence on postcards or self-mailers. They rarely work as well on a cost per sale or cost per lead basis.

Reviewing the poor performers reveal copy and layouts to avoid. You should also look at competitor mailers that repeat. Direct marketers will not remail loosers.

Don't think great design, humor or witty copy like a brander

Concentrate on the recipient's problem and how your product will solve it. Sell with conviction, testimonials and third party endorsements. Use as much copy as you need to answer anticipated objections. Most of all, build urgency whenever possible.

Remember that direct response mail must sell. Do not entertain or impress the audience with flawless prose or award winning design. Focus on the need of an individual recipient and create an irresistible need to respond now.

Avoid stop action copy in the letter that stop the reader in the middle of your message. Mention links, phone numbers and references to other pieces in your mailing at the end of your letter. 

Successful direct mail revolves around a central theme or the main selling proposition. Don't try to do too many things in your selling message. Reduce the number of decisions your are asking the reader to make.

Strive for breakthroughs rather than incremental improvement

Breakthroughs happen only by testing significantly different creative executions. Test everything at once without worrying too about what element might make a huge difference in response.

A 25% plus reduction in the cost per sale or cost per lead qualifies as a breakthrough.

In your testing, don't spend too much time trying to figure out exactly “what” made the big difference. Take your gloves off and concentrate on testing different offers and main selling propositions.  

Posted on June 6, 2017 and filed under Direct Mail, Direct Response Creative.