Are B2B Firms Ready for $10M Spam Fines?

US Business-to-Business Companies Must Re-think Commercial Electronic Messaging Strategy

Canada’s new CASL commercial electronic messaging (CEM) Spam regulation goes into effect July 1, 2014. US businesses that promote in North American or on a global scale must take heed of the new requirements or face big fines. This creates some unique challenges for B2B sales and marketing. Is your business ready for the new requirements?

Whether you are a B2C or B2B business, CEM can drive profitable revenue. While the laws are intended to eradicate the invasion of flagrant spam to consumers, businesses that rely heavily on a sales team for prospecting and form fills for lead generation are not exempt from the new Canadian regulations nor the fines for non-compliance. A large majority of B2B businesses are ill-positioned to comply with the new laws. The double opt-in best practice employed by reputable e-commerce and consumer brand sites is the recommended approach. However, few B2B firms use double opt-in as it has proven to be less effective. This is going to prove problematic since they have not revised email strategies that can adhere to Canada’s stringent demands and still drive email engagement for lead generation.

Consent, Consent, Consent

The definition of spam is clear, CEM is about consent, not content. Canada’s new law requires that any CEM (email, text message, social media message) must have clear, action-driven consent from the recipient. Currently, US CAN-SPAM and several European countries allow marketers to assume that a person submitting their name or email address electronically is providing full consent to be sent continuous email communications. Canada’s new regulation demands that the recipient’s consent be explicit.

As digital marketers, we know that transparency is the best way to build trust with potential clients and customers. Yet, when someone submits their information for an offer, many marketers assume the recipient is giving future permission to send them electronic messages. The following displays the difference between assumed consent and actionable (explicit) consent:

As of July 1, 2014 All Requests for Consent to Canadian Recipients Must:

1. Explain the purpose of why you want the consent.
2. If you are collecting information on someone’s behalf, you must provide their contact information (including name, mailing address and phone number).
3. Provide a method where the recipient can easily un-consent. You can get explicit consent in writing or orally, but you should keep a record of when and how you got the consent.

The dilemma for marketers is that we are tasked to generate qualified leads. Too often that is interpreted as list building…literally. For B2B marketers offers such as eBooks, whitepapers, etc., are a way to provide your target audience with something they find valuable. In turn, their acceptance of the offer provides us an opportunity to build a rapport with the objective of nurturing the relationship through electronic message touches. The ultimate goal is to convert them into a sales-qualified lead at some point if/when they are ready. But the requirement of an opt-in checkbox on an offer has potential to reduce opt-in permissions, thus reducing the number of recipients in your email marketing list.

In sales and marketing, we need to redefine list building. An email marketing list grows as a result of engagement – built on the foundation of delivering valuable content to your audiences and messaging that resonates with the recipient. The objective is gathering marketing-qualified leads (MQLs) that have a high probability of being turned into sales opportunities in the future.

Not Complying COULD COST YOU DEARLY

Canada is taking anti-spam one step further by imposing the highest penalties of any country for non-compliance. Failure to comply with CASL could cost you millions…literally. If you are a corporation and a sender of non-consented emails, you can be fined up to $10 million (Canadian). If you are an individual, you could be fined $1 million. The recipient of your emails can sue you for $200 for EACH individual transgression! This of course, excludes associated business costs and legal fees.

What Does All This Mean for US Marketers?

Canada’s CASL regulation imposes an “opt-in” requirement on all electronic messaging. This includes, email, text messaging and social media. What that means is the consent cannot be implied as in example A above. The recipient must take clear action to express consent. This can be done in one of two ways:

1. Provide a check-box that the recipient must check (pre-checked boxes not allowed) prior to submitting a form OR
2. Provide language that is very clear

However, there are a few limited “exceptions” where implied consent should be acceptable (as long as you have a documented record):

1. You have an active business relationship with the recipient.

• You have sold something to the recipient within the past 2 years OR
• The recipient has made an inquiry about your products at any point within the 6 months before you send the email

2. The recipient published his or her email address for the world to see. This does not mean submitting a form, rather adding their email address to a bio page on their website or an ungated eBook. Another point, if their email address is published, you can only use CEM if they have not included anything that says, “no spam please” or “do not send me anything.” You would probably also want to have documentation of the URL.

3. The recipient whose “business activities” are relevant to the message you are sending has given you their contact information without indicating they do not want to receive your messages. As an example, this could be from someone that provided a business card or a list of contacts from conversations at a tradeshow or conference.

The objective of Canada’s law is to eradicate the bad guys from Canadian bandwidth and remove personal invasion without impeding start-ups, small and medium businesses and corporation’s ability to build business relationships through email. Not an easy task even with the limited business exemptions to the new law.

Email Marketing is a Joint Sales and Marketing Activity

For many B2B companies, especially those using integrated CRM (Customer Relationship Management) software, the email list is a convergence of marketing and sales contacts from a wide variety of sources. In addition to electronic subscriptions, contact leads from tradeshows, conversations and third party referrals work their way into the mix. The exceptions language in the new laws relies heavily on your ability to provide proof that contacts in your email subscription list have given you permission to engage with them through CEM either verbally, written or electronically.

The Validity of Prior Consents means express consent received before CASL can be relied on. For many B2B companies, express consent in their current email strategy can be murky, at best. If your current email open rates are low, the probability exists that at least a certain percentage of your emails are being diverted to a spam folder. You should scrub your email database and remove addresses that are non-responsive. More importantly, we recommend sending out an email (through your automated system for documentation) to everyone on your lists inviting them to confirm and/or update their subscription page before July 1, 2014.

We also suggest that moving forward, for non-electronic generated leads and contacts, you have fields within your CRM that synchronize with your email automation system and clearly identify the where, who, when and why the contact was added into your database. We also recommend documenting your email strategy so that any non-electronic subscription added to your system is immediately sent a welcome message identifying why they are receiving this message and confirming their consent for further contact from your company.

It will take some time for the dust to settle on this new regulation. We do not yet know how diligent Canada will be on enforcement. There is a 36 month transition period beginning on July 1, 2014 and ending June 30th, 2017 during which time consent may be implied if:

1. The recipient has not explicitly withdrawn consent AND
2. The recipient has either:

• Purchased something from you in the past OR
• Has made an inquiry of you at some point in the past

We Recommend That You:

• Create a company-wide email opt-in policy. This is especially important for sales and marketing as these departments are often the first point of contact.
• Confer with your legal counsel on email policy and executions.
• Clean or scrub your current email list before July 1, 2014.
• Include in the signature of all business communication your name, company name and physical address along with at least one alternate way to contact you.
• Maintain records that prove you have written or oral permission to send recipients CEM communications.
• Do not use false or misleading subject lines.
• Have a working unsubscribe plan in place where manual requests are processed within a 10 day window and any unsubscribe links are valid for at least 60 days after the send date.
• Do not use pre-checked boxes on subscription forms. Valid consent must be an affirmative action.
• You cannot confirm unsubscribes by sending a follow-up email.
• If an email is being sent “on behalf of” another organization, you must clearly identify both parties.
• Non-profits are included in CASL if you are selling or soliciting anything.

Find and Convert is a digital marketing agency. Nothing in this post serves as legal advice. We recommend that you consult with an attorney to comply with CASL regulation whether or not you are actively pursuing Canadian business.