A look at Canada Post’s direct mail strategy following a summer of negotiations
There is certain inherent nostalgia to mail. One sits down with pen and paper and crafts an intricate message of correspondence, which is then placed in an envelope, a stamp is applied and, finally, it is dropped in a local mailbox. However, while technology has rapidly developed in the last several years and drastically changed the way we communicate with each other, the basic principle of mail has not.
For the average twenty-first century consumer, snail mail may seem like an antiquated form of communication. However, for the graphic communications industry, mail, and more importantly direct mail, is a core, complementary service offering; if you print it, you can probably mail it. Despite the rampant proliferation of digital media, mail has carved out a unique niche where it is valued for its personalized targeting, haptic properties, and ability to seamlessly innovate with unique properties and digital tie-ins.
For Canadians and businesses, Canada Post is our primary postal service and the company is not ignorant of their future viability in an increasingly turbulent and uncertain market. As the federal government conducts an independent review of Canada Post to evaluate how Canadians are using the service (the first assessment was released in early September), the crown corporation is evolving to face the reality of dwindling returns given the impact of social media, digital media, and generational habits of consumers. The 35-year-old establishment has rebranded their direct mail services as Smartmail, cultivated their partner program, and added new products to remain relevant and competitive even in the face of labour disputes.
The Negotiation Table
There may have been no dramatic music or nail biting climax but it has been an intense summer of high-wire suspense as Canadians and businesses watched with bated breath the negotiations between Canada Post and the Canadian Union of Postal Workers (CUPW). July began with a lockout warning from Canada Post, which eventually devolved into both parties returning to mediation, not binding arbitration as many assumed. As a result of prolonged negotiations, the union issued a 72-hour strike notice at the end of August when their strike vote expired. The collective sigh of relief after August 30th was palpable when Canada Post and the CUPW reached tentative short-term agreements, although the ratification of the agreement by vote has yet to take place.
While mail may be perceived as defunct (if the comment sections on any articles related to the topic are to be believed) the following graph using Google’s Google Trends Tool – which tracks the intensity of interest in a topic relative to other searches – instead indicates that Canadians appeared to be incredibly interested in the potential postal strike.
The graph establishes that interest in the “Canada Post strike” was 20 percent higher compared to the week the lockout occurred five years ago. (The second peak in 2011 shows the search activity that occurred when the Conservative government imposed back-to-work legislation.) While the interest petered out following the extension of mediation, most likely because of the mistaken belief both parties had agreed to binding arbitration, it is clear that following the CUPW’s 72-hour strike notice that interest peaked again.
The reality of a postal stoppage posed a very real liability for not only printers and businesses, but for the recipients of mail as well. In the e-commerce age of Etsy, Amazon, and independent small businesses the reality is that Canada Post is our primary source for mail delivery and one of the biggest competitors in the parcel industry. According to the Canadian Federation of Independent Business (CFIB), 98% of its more than 100,000 members still use mail for invoices, bills, flyers, payment reminders, and packages.1 For such companies and their clientele, a work stoppage could have been devastating.
The search history shows there was a vested interest in the challenges a postage stoppage would pose to companies, brands, and end users. Whether you were an entity looking to mail, or a business producing mail the uncertainty had a massive influence on existing or planned campaigns. The potential of a work stoppage drastically changed Canada Post’s consumers’ mailing habits as they relied on other parcel services as well as local businesses like Chit Chat Express, which specializes in shipping from Canada to the United States; Canada Post reported they experienced a volume decline of 75% from nearly all of their largest e-commerce customers who moved most or all of their parcel volumes to other carriers.2 Lettermail was down as much as 50 percent in the first week of July because commercial customers deposited half the mail they usually deposit2 relying instead on other alternatives for distribution such as newspapers and digital alternatives to advertise.
Canada Post’s Evolution
Just like the adage “print is dead,” “mail is irrelevant” is similarly inaccurate. Mail is not stagnant but evolving to better suit the needs of consumers and businesses. Canada Post is the driving force behind its metamorphosis as they recognize mail’s key role in marketing campaigns. In April 2013 the Conference Board of Canada released their report, The Future of Postal Service in Canada, the document presented its findings and recommendations in regards to a fundamental Canadian challenge, consumers still rely on the postal service but they are shifting from physical to electronic communication means. In December 2013 Canada Post set in motion its Five-Point Action Plan, which proposed: the implementation of community mailboxes, a new approach to pricing, the franchising of post offices, streamlining operations, and addressing labour costs.
Regardless of one’s feelings towards the infamous community mailboxes and the postage price increases that have occurred over the last several years (primarily to lettermail), print partners can benefit from how the company has positioned itself as a direct mail educator by introducing SmartmailTM Marketing, nurturing Canada Post partnerships, and redefining direct mail products to better suit customer needs.
Smartmail is Smarter
Today there are a multitude of channels and touch points brands can use to reach consumers. In a society where television commercials are easily ignored, and Internet advertisements are blocked or clicked away with ease, mail offers a personalized, tactile experience that can be used to connect the digital and physical worlds. At least once a week, a flyer, a charity appeal, or coupons show up in our mailboxes, and, whereas some may call it junk mail, we do remember receiving it. This is the edge marketers are looking for – where their investment dollars pay off because audiences remember the physical item they picked out of the mailbox.
In order to prove their hypothesis and cement direct mail as a key marketing channel, Canada Post commissioned an ethnographic study, Bias for Action, that explored how direct mail factors into the lives of consumers and their purchase history by using neuromarketing. This research and the white paper, Breaking Through the Noise, both released in the summer of 2015, produced four conclusions:
1. Direct Mail inspires: Mail is part of almost every consumer’s ritualized routine imbuing it with more meaning and trust.
2. Direct Mail gets noticed: Mail is opened, read, enjoyed, and remembered by consumers. Seventy-four percent of consumers always notice advertising in direct mail4 and 81% will read their mail the same day they receive it5. Eighty percent of respondents said they can remember seeing or reading mail sent to them in the last four weeks.5
3. Direct Mail persists: Mail is kept, displayed, and shared with others depending on its contents. Grocery flyers, coupons, and catalogues are kept in the home for a month or longer by at least 30% of recipients.6
4. Direct Mail persuades: Mail influences actions and buying decisions. According to Swiss Post’s mail study in 2014, 64% of recipients visited a website in reaction to direct mail7 and Canada Post found 45% of customers receiving grocery flyers visited the store’s retail location.8
As a result of this study, other studies, and the innovative ways mail was being employed in creative campaigns, in 2015 Canada Post rebranded direct mail as SmartmailTM The Science of Activation because it was clear that direct mail was not simply a service but a science. The Smartmail philosophy is divided into three core concepts:
1. Physicality: employing the tangible element of direct mail
2. Data: tapping into information about consumers to increase direct mail’s effectiveness to reach the right customer
3. Connectivity: using direct mail as part of your entire marketing mix to amplify the impact of all marketing channels
The symbiosis of the three elements is what creates a truly strong direct mail campaign that entices targeted consumers to emotionally engage with a brand by complementing all the marketing channels in an omnichannel campaign. Canada Post’s goal is to distinguish themselves as an educator of Smartmail and not just direct mail’s service provider, thereby, increasing their value to businesses as well as consumers. By leveraging this research and continuing to invest in additional research studies they hope to continue to overcome the misconception among marketers about how customers engage with mail by proving it is an emotional driver for marketing.
This is where printers and brands have an opportunity. Many products, flyers, coupons, newsletters, magazines, annual reports, etc., are printed constantly and yet the next logical step in the process, mailing them, is treated as an afterthought. Where a company may already be handling the production and shipping, mail is an opportunity to add value for the client, add additional revenue streams, and easily keep work in-house. Companies that master mail may one day become Smartmail Partners.
Partner Program
Even though mail is accessible to everyone, and small businesses can join Solutions for Small Businesses to receive postage and parcel savings Canada Post has specifically developed a list of Canadian partners, in most cases companies that can either produce large volumes of mail or print providers who can provide a complete service package for clients. There are two tiers:
Smartmail Marketing Partners: partners who can deliver a Smartmail Marketing experience and produce and manage mail, as of 2016 there are approximately 219 of these.
Smartmail Expert Partners: partners who are equipped to provide a complete Smartmail Marketing solution. These partners are prepared to provide additional expertise in all three categories and manage the execution of Smartmail Marketing. In 2016 there are approximately 35 expert partners.
Working with a partner is truly an opportunity to get access to incredible resources, as a partner is able to optimize and amplify the intellectual assets shared with them by Canada Post. Partners are eligible for online training (e-learning), have committed contacts within Canada Post who help drive and support mail traffic, receive case studies and research statistics to promote mail, and are privy to special offers within Canada Post. Partners strive to solve marketing challenges that customers face regardless of the stage to which they belong in the customer’s value chain. Many partners have the tools and expertise to fuse all three attributes of the Smartmail philosophy to create direct mail opportunities with new or existing customers.
Partners are customer-facing problem solvers who have undergone a rigorous selection process and continue to satisfy Canada Post’s exacting partner requirements. Whether one finds a partner through the Canada Post website directory for outsourcing purposes or a current supplier is a partner themselves, these enterprises are prepared to execute excellent mail. Where they add the most value is with an in-depth understanding of Smartmail products, experience, and they can provide seasoned advice and technical expertise.
Product Revitalization
In addition to implementing Smartmail, Canada Post also changed its direct mail product names and simplified its guidelines to better align with the Smartmail transition. These new names were meant to better represent the core purpose of each type of mail:
Personalized mail, formerly addressed admail, is addressed mail targeted to engage specific prospects on a one-to-one basis.
Neighbourhood mail, formerly unaddressed admail, are mass mailings targeting potential customers in specific areas, such as neighbourhoods or FSAs (forward sortation area), to find the right customers for the business
Depending on which type of product the customer needs, Canada Post has a wide selection of tools available to help Canada Post partners, printers, designers, entrepreneurs, etc. to accurately design a strong campaign. The corporation’s data services can also identify potential customers. Some resources include:
Precision Targeter is an online do-it-yourself neighbourhood mail campaign planning tool that employs an interactive map. Users can choose up to three demographic filters to identify the best geographic areas to advertise based on the concentration of customers that best fit their ideal customer profile.
Machineable Mail Advisor has downloadable templates for both standard and oversized envelopes and postcards indicating the postage zones and areas on a piece, which must comply with Canada Post artwork guidelines.
Canada CompleteTM consists of address lists that can be rented of customers or businesses across Canada. With approximately 13 million addresses updated monthly, these accurate lists can be customized to target certain consumers, filtered by specific demographics, and managed with complementary services, like the National Change of Address database, and deceased suppression.
However, probably the most exciting change is their new product, Postal Code Targeting. Currently only offered through expert partners, postal code targeting is a next-generation approach to neighbourhood mail. When one uses a tool such as precision targeter demographic attribute matches can only be filtered to the letter carrier route. For today’s marketers this is not narrow enough, as a single route can contain numerous individuals of differing tastes, incomes, and lifestyles and they only want to reach the portion of them that matches their ideal customer.
The postal code targeting service from Canada Post is now able to isolate the best potential recipients within a postal route by applying geodemographic analytics. Examples of useful applications include: inciting purchase envy by sending the neighbours of an individual who purchased a high-end car offers from the dealership, or targeting only individuals of a specific income for non-profits. Each addressee has a unique variable data matrix printed on the piece; this barcode helps sort and process the mail so that only those targeted households receive it. While the piece is generic in appearance it has all the propensity of personalized mail to reach the ideal customer without having to address the actual piece.
Innovative mail is the new trend. Blending multiple media channels with imaginative physical pieces that get noticed is how Smartmail is evolving. Bias for Action proved direct mail resonates with every age group outperforming digital advertising media9 and with simplified product guidelines it is easier then ever to mail these unique pieces. Personalizing the message and providing digital tie-ins such as, QR codes, augmented reality, personalized URLs, and social media engagement, are some of the multiple ways mail can be used to drive traffic to multiple touch points in a marketing campaign to maximize marketers’ money.
Closing Thoughts
This is only the beginning. Mail is one of the few media which blends traditional and technology and is only limited by one’s creativity. Looking at current campaigns customers are getting more and more innovative about how they advertise, whether it is using interesting or unconventional substrates, employing augmented reality, or mailing physical objects.
Irrespective of where a company or marketer belongs in the mail value chain, direct mail can work for you. Anyone can employ the tools provided by Canada Post to create basic direct mail campaigns for end users. More importantly, with the newly simplified service manuals, uploaded in November 2015, one can easily navigate straight to the product they wish to produce and select a sub-manual that clearly explains what to do at each stage of production, from designing the piece to packaging it for Canada Post.
Whether you choose to execute a project yourself or have a Smartmail partner help you, the science is there proving that mail makes sense – its physical properties get noticed helping reach the right consumer at the right time while integrating seamlessly with other media channels. More importantly the past few months have shown that there is interest in mail. To leverage mail, one simply needs to understand the products available and the science behind it. With this basic knowledge, a company can transition into selling mail to their customers as a value-added service that reaps rich rewards.
