What was the impact of CASL on online sales? A case study

Toronto 20140925 00024 part2 resized 600Earlier this year the Canadian Anti-Spam Legislation (CASL) came into effect. As of July 1, web marketers who use electronic channels to promote their products have to comply with CASL stipulation. Now that the businesses are compliant, the question has arisen whether the legislation had an impact on sales. Here are some observations and conclusions from my experience with a Canadian client.

Background (sensitized)

This company sells direct to the consumer on the online channel. Marketing activity is dominated by email promotions. The online revenues are in the range $10M-$50M CAD annually. The company is also active in the US (in a much bigger way) and has been compliant with the CAN-SPAM  act well before CASL came into the picture.

This context is important. This company had solid email marketing practices well before July 1 and the email-able customer base was mostly clean. However, due to some ambiguity in current practices for getting “express consent” from customers, the team decided to trim the email-able list of customers on whom there was ambiguity. This dropped the opted in population by over 50%. It was aggressive but the right thing to do.

The transition happened in June. Given that July was the month of transition, and is a really slow period in Canada anyway, we waited through August and part-way in September before framing conclusions.

Higher than a dead cat

Overall sales dropped in the transition but have bounced back through September.

And this wasn’t a dead cat bounce. The numbers rebounded to the level and show a trend consistent with 2013.

When we profiled the customer base before and after the CASL related actions, we had the following observations and conclusions.

Observations Conclusions
Over 80% of the customers purged from the mailing list were long-time dormant The revenue loss of “losing” the customers from email marketing was a big fat zero.
Less than 1% of the best customers were dropped from the mailing list. The “best” customer segment is just 20% of the customer base but generates well over 60% of the online sales. CASL impact was negligible to this segment.
September 2014 revenues are tracking to be doublethat for September 2013 for the opted out population Customers who were dropped from email lists are still coming back to shop online. Only now they are doing it without needing a promotional discount (average order value is 7% higher than same time last year).

Takeaways

  • Respecting the customer is good business: This company already had good email marketing practices in place in respect to gaining customer consent for emails, email frequency and marketing content. Consequently the impact to online sales was minimal through the transition period.
  • Look beyond last click attribution: Email volumes dropped well over 50% from same time last year and yes, the Omniture report looked bleak. But what do you know? Online sales were actually up from last year so it’s all good.

The reporting and marketing analytics at this company follow best practices in customer loyalty management outlined in the cookbook linked below.

Download the Loyalty Program Cookbook

I acknowledge the above case study is a sample of one. Are you an online retailer operational in Canada? What has your experience been with CASL? Share your thoughts below.

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