Tony Keenan is president of Regal Greetings & Gifts, a mail order distributor of general merchandise. He is also one of the pillars of the direct marketing community in Toronto. His support and guidance has helped the community of direct marketing professionals to define both their purpose and their values.
Charles: It’s a bright and sunny day full of hope. Do you agree?
Tony: Hope is a good thing.
Charles: Do you have hope?
Tony: We have come a long long way. Consumer acceptance had increased by leaps and bounds and, frankly, the economy is the only issue that’s inhibiting the growth of the direct marketing industry in Canada. The economy aside the defining issue for our industry is the same now as it was when he entered the business 27 years ago: consumer acceptance.
Charles: What’s getting in the way?
Tony: A dearth of quality offers. There are just not enough quality offers in the marketplace to drive acquisition, support the direct marketing concept and to keep buyers coming back. As much as I hate to say it the direct industry lacks credibility in the marketplace, and that’s not only in the catalogue business, but that applies to all direct marketing propositions out there.
Charles: So what’s the solution?
Tony: More quality product, better service and good prices. Right now that’s entirely driven by the US cataloguers now coming into the Canadian market like J. Crew and Lands End. I think they’ve just started to figure out that our market will deliver a higher average order value and higher overall response rates.
Charles: But isn’t doesn’t our higher cost and tax base offset?
Tony: Yes, you’re right. Our taxes are much higher across the board. Our cost of labour is about 20% higher than in the US. It’s tough to be competitive.
Charles. How are our US friends doing?
Tony: They are doing a reasonably good job coming across the border. They could do better, because the concept of charging for product in Canada in US currency doesn’t make any sense. They should come into the country and do it right, instead of trying to skim off the surface from the outside. But all of that aside, that’s where the opportunity lies.
Charles: So, is this just the tip of the iceberg?
Tony: Yes and to be frank I look forward to more competition from US cataloguers. I see nothing but good things coming from some of these quality organizations coming into the marketplace and generating interest and credibility and, therefore, more names for me to mail to.
Charles: You’re walking into the Canadian list industry. What’s your view here?
Tony: That’s my problem. There just aren’t enough Canadians and the Canadian list industry reflects that challenge. The numbers are so small that it really hurts growth.
Charles: What are your thoughts on the current trend to increasing privacy protection for consumers?
Tony: It’s a good news, bad news story. The growth of the direct marketing industry in Canada is still working in direct relation to the privacy issue. There’s more pressure to have the government regulate our industry.
Charles: What about the CDMA?
Tony: The key issue for the CDMA is to make sure we can maintain our self-regulation. The whole reason behind direct marketing has been the ability to reach a specific target audience very cost-effectively. If you start to take that away, the whole premise upon which direct marketing is built the overall industry is weaker.
Charles: What’s the conflict as you see it?
Tony: There is a fundamental conflict between consumers’ desire to protect their privacy and their desire to protect the environment. The ability to target is based on knowing factual information about clients and prospects. With privacy restrictions, we’re going to have to mail more and not be as targeted.
Charles: So the issue is not one independent problem really, but interrelated?
Tony: We just need better marketing data management, better analytics and more people like you partner Brian Salter.
Charles: Brian will like that. What do you mean?
Tony: Our industry has been built by people like Dave Taylor, Brian Salter, Rich Basset, Marilyn Stewart, Steven Shaw, Mona Goldstein and so many others. Through their hard work and effort we have built a remarkably innovative and energetic group of people dedicated to making direct marketing work better in this country than anywhere else in the world. I think we are doing just that!
Charles: Can you comment on data management. What are the issues?
Tony: To move away from the inefficiency, you have to build better databases. While that raises more concerns over privacy it is the only way to move forward. Database technologies are going to allow us to capture information about existing clients or prospective clients and, obviously, from the client’s perspective, there’s a fair degree of nervousness in terms of what it is we know about them and what we do with that information. We have to make sure there aren’t unscrupulous marketers who are abusing their access to the information that is out there. But that brings us back to regulation or self-regulation.
Charles: What’s the real answer here?
Tony: Consumer education! We want to put it into consumers’ hands that they have choices about direct marketing, if they want to receive an offer or not receive an offer. We have to show consumers we are taking into consideration their quality of life and that there is a recourse for consumers if they feel they are being abused, e.g. that their names are being passed around without their consent.
Charles: What about the ‘open dialogue’ concept that being discussed so much recently.
Tony: Yes, there has to be open dialogue between direct marketers and consumers. You can’t hide anything from the consumer, otherwise you’re asking for trouble down the road.
Charles: So what’s your biggest concern right now?
Tony: Lagging behind US!
Charles: Can you be more specific:
Tony: Canadians are lagging behind the US in technology, and that is a big hindrance to the growth of direct marketing in Canada.
Charles: Are there any specific audiences the direct marketing industry needs to focus on?
Tony: We stand to lose out on a lucrative source of income if we fail to increase their understanding of the various groups within the seniors market. It’s very easy to alienate seniors by labelling them seniors. The CDMA could help by creating a forum at its next conference to focus on seniors marketing.
Charles: Do you have other concerns?
Tony: Consumer cynicism.
Charles: Anything else?
Tony: Our market is just so small. We need to make free trade work and to support efforts by people like Barbara Canning Brown to push cross border trade.
Charles: I think you and Barbara are both involved in that effort
Tony: Yes, and she’s been doing a tremendous job.
Charles: Speaking of tremendous jobs. I want to thank you for taking the time today to speak with me. I also wanted to thank you for making Regal the remarkable place it is today.
Tony: You and Salter, de Gruchy have done so much for the business, for the CDMA and for new talent working its way through the system. I hope you’ll continue the good work.
Charles: Whose interview is this?
Tony: Mine, of course.
Charles: Thank you, Tony.
Charles de Gruchy is President of Salter, de Gruchy a direct marketing agency in Toronto, Ontario with clients in retail, healthcare, and technology focused on building exceptional customer experience for their customers and value for their shareholders. Salter, de Gruchy’s offices are located in Toronto and New York. and he can be reached at 416 589 1600.