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Canada: Spam Canary in the Consumer Mine

The world of email marketing is about to undergo yet another earth-shattering change — at least in Canada. In case you aren’t cognizant of the latest parliamentary actions, it’s critical that you circle, star and double underline the day of Tuesday, July 1, 2014, because that is when the first of three overtures of Canada’s Anti-Spam Legislation (CASL) takes effect.

Designed with the obvious intention of protecting Canadian consumers, CASL has vast and profound consequences for resident hoteliers, especially those working in meetings or group business or those who may be aggressively using electronic marketing through purchased lists. The new law essentially functions as the US CAN-SPAM Act of 2003 on steroids, requiring users to expressly opt-in for solicitor emails, whereas before this was regulated via an unsubscribe, or opt-out, functionality. A business must now have this consent or a documented, pre-existing B2C relationship prior to any electronic contact. Moreover, this pertains to all digital materials sent by or accessed by computer systems within Canada.

The second phase takes effect just six months later on January 15, 2015, focusing on provisions related to program installations for computers, tablets, smartphones and any other software-based device, helping thwart malicious downloads. The third and final phase, effective July 1, 2017, aims to enable statutory private rights of action against spammers. With enforcement by agencies as well as the courts, noncompliance fines will range from $200 per message to upwards of $10 million with robust capacity for personal as well as class-action proceedings.

It’s a powerful law and a natural next step in the fight against unsolicited spammers. As for the title? Canada’s intransigent legislation may become the new benchmark for further regulations enacted in much bigger consumer markets like the United States and European nations.

Importantly, because of its emphasis on computer systems physically located within Canadian borders, it restrains both Canadian hospitality companies as well as foreign operators looking to penetrate the Canadian market. If iterations of CASL catch on in other larger markets, it will make email and mobile marketing for hotels a very thorny game to play without accruing penalties. In fact, a handful of key adopters may be all that’s needed to make it virtually unplayable.

When the jig is up, so to speak, marketers will have to look to other channels to effectively build relationships with consumers, even those where the rates of return aren’t nearly as lucrative as harvested subscriber lists or snail mail. The likely candidate will be social media or a budgetary resurgence for retargeting advertisements. Perhaps this will mark a renaissance for the more physical sales tactics such as trade shows or magazines.

July is just around the corner, though. Everyone values their electronic marketing activity, but now you need to take steps to validate your databases. If you have established B2C relationships with, for example, past guests, then you have no worries. However, if you are unsure how your database has been obtained, you may want to distribute confirmations requesting individuals verify their acceptance of your communications. Cleaning up databases has always been important; now it’s essential.

Personally, I see this as the beginning of the end for spam and its marketing capabilities. As this, along with any subsequent action in other countries, will reduce your company’s supposed sales funnel, it’s critical you make every B2C opportunity count. The future will favor conversion rate over reach.

In the meantime, whether you are in Canada, the United States or overseas, you best get together a compliance team to audit your current operations and implement necessary changes prior to July 1.

(Article published by Larry Mogelonsky in HOTELSmag on April 1, 2014)

Larry MogelonskyCanada: Spam Canary in the Consumer Mine