Seventy five per cent of health decisions are made by women. This according to Faith Popcorn, author of Power of the Purse. I’ll add this: 90 per cent of people who serve customers in natural food stores are also women.
Recently, I asked one of my clients what they had learned in the past year. He said: “I learned that I can earn more by working less!” My response: “You just learned in a year what most MBA students never learn in a lifetime.” Not only had my client doubled his income over the past year, but he also significantly reduced his stress levels.
In the Kabbalah, the ancient Jewish tradition of mystical Biblical interpretation, there is a saying that the two pillars of justice are mercy and severity. The pillar of mercy represents forgiveness for our wrongdoings. The pillar of severity represents the law of karma – that we must reap what we sow.
Yes, you can teach empathy, rapport and authenticity to your staff. Even those who join your staff with a high degree of these “soft skills” can still improve them through training.
Brittany Baird is my colleague at CDS Consulting Co-op whose area of expertise lies in linking financial success to the everyday decisions we make on the sales floor of a natural foods business.
CC: How do you go beyond standard customer service training?
BB: Every business wants to ensure good customer service. All your competitors are teaching customer service. But you likely have a mission that goes beyond selling products.
CC: Yes, a quick visit to mission statements on websites of stores featured on recent covers of CNHR reveals values such as wellness of community and planet, ecological consciousness, supporting local and organic family farms, and empowering people to lead healthy lives.
BB: Then your staff may be inviting customers to come to events, try new products or donate to a cause. Teaching them soft skills can promote all your goals. Also, the longest conversations take place in the supplements aisle. Customers there need guidance far more than in other departments. These skills are even more essential when supplements are your primary product.
CC: So how do you teach empathy, authenticity and rapport?
BB: The three skills needed are mirroring, reflecting and active listening. With mirroring, you consciously match someone’s tone and body language to create rapport. Say someone is new to town and comes into the store with enthusiasm, wanting to be engaged. If staff doesn’t mirror this customer, it’s poor customer service.
If a person is upset, you can draw them back down by reflecting rather than mirroring. For a disgruntled customer with confrontational body language and hand gestures, you can cool that energy down with, “Okay, let’s talk,” while keeping body language and gestures restrained.
Active listening involves making a conscious effort to hear not only the words but, more importantly, the complete message being communicated. When a customer says, “I drove from far away to get here. This is the second time you’ve been out of this product. I want to support you guys but you make it so hard,” good customer service would be, “Okay, we’ll fix it,” however, great customer service – using active listening – would hear the desire to support the store and the frustration, and find out what the customer needs to “make it right.”
CC: What are the most effective ways to train for these three skills?
BB: Role-plays with different scenarios are the best way, and they’re fun. Scenarios can be a bit silly to set a tone that’s not overly serious. Give the trainees the right amount of structure to these scenarios, with some room to play with. When I lead training workshops with my CDS CC colleague Rebecca Torpie, every single person in the room speaks in the role-plays and practices the skills, though not everyone performs for the whole group. A few may be uncomfortable at first but they get a lot out of the experience. We switch partners frequently so people can see how different partners process the assignments. We do “failed versions,” too – wrong way versus right way.
I understand it’s hard for small stores to do structured training, but you can still teach active listening, mirroring and reflecting. Owners usually model the best customer service. When they’re not there, they need a cornerstone person on staff who will model for the rest of the team members.
Soft skills training for staff can help propel customer service from good to great, differentiate your store from your competition and create loyal shoppers for life.
It was serious business! My brothers and I were neck deep in it. We were digging to China when we were interrupted by the sound of our mother calling us for dinner.
Digging holes is something that boys do. As kids, we would dig holes for forts, holes for adventures, and holes in search of gold. At the age of three, my son dug a hole to trap bears.
In business however, when we dig holes – unless we are in the construction business – they are usually not good. I have dug myself some holes as a businessman over the years. The biggest hole that I dug was hundreds of thousands of dollars deep. These types of holes don’t happen overnight: they take lots of planning and many hours of making mistakes, and sometimes years to get out of.
The most common holes in business are profit holes. Profit holes are those costs that build up over time and eat away at the owner’s profits. According to the National Federation of Independent Business in the USA, 60 per cent of small businesses are either not profitable or are only marginally profitable. To be clear, the profit in a business is what is left over after paying all of your expenses. In a small business, there are many expenses: the cost of goods, labour, insurance, supplies, utilities, computer equipment, etc. The list is almost endless it seems. Unless we are careful operators of our business, we may find ourselves among the 60 per cent of businesses where the owners receive very little to speak of in terms of money at the end of the day.
One of my clients, we will call him Paul for the sake of this story, owned a health food store that he ran for several decades. As he was thinking of selling the business, he realized that new owners would probably like a business that was a little more profitable. Paul started examining his income and expense statement with a fine-tooth comb. He discovered several areas in which some of his costs had crept up over the year. In one case, he found that he had originally employed a cleaning company on a contract for a small job for $50 per week. Over time, they had gradually raised their prices to $100 per week. He consulted his employees concerning this job, and was told that they thought that they had time to do the contractor’s work as he was only spending 15 minutes a week in the building. Profit hole filled = $5,200!!!
Paul kept digging. One day he got a call from a service provider for debit machines. They told him that he would save $400 per month if he switched over. Paul didn’t switch, but he used that call to ask his current provider to match their rates. When they agreed, Paul saved an additional $4,800 being lost through a profit hole.
When Paul plugged these two profit holes, he saved himself $10,000 per year. For a small business owner, $10,000 a year can be very significant. Not only did Paul enjoy that money immediately, but he increased the value of his business at the same time. Potential buyers always want a profitable business!
When we are looking for ways to reduce our expenses and plug profit holes, we need to look through each and every area of the business. We must ask ourselves how we can reduce our costs in this area. In my book Profit Yourself Healthy, I identified 107 different ways that small business owners can reduce their expenses. These include reducing costs in areas such as labour, energy, consulting fees, insurance, travel expenses, maintenance, and more. Sometimes we can eliminate an expense. Often times by putting the product or service out for tender again, we can lower our costs. The trick is to look at the largest expense areas first, and figure out ways that we can create efficiencies.
The longer we have been in business, the more profit holes we can find. Like Paul, we let little expenses build up over time and the result is an erosion of our profits. It’s easy to dig holes but sometimes it’s much easier to fill them.
James Morrell has over 25 years experience in natural foods retail management. Over those years he’s done a lot of hiring. I’ve written about hiring in this column before, but for a fresh perspective, I turned to James, now a consultant in fresh category management.
A client, who I’ll call Mary, is the owner of a small natural foods store. A new bookkeeper had been on the job for several months before Mary studied the bank records and realized $15,000 had disappeared. Mary confronted the bookkeeper, who sobbed that she'd "borrowed" the money to pay her mortgage. Mary was touched by this story. She intended to fire the bookkeeper, but should she report the theft to the police? She was concerned about ruining the bookkeeper’s employability in their small town.
Eventually Mary decided to press charges, which were reported in the local paper. At that point, two former employers of the bookkeeper called Mary to apologize for withholding information when she’d called them for references. Apparently this employee had stolen from them too, and told the same compelling story. Also Mary got a call from the bookkeeper's new employer who read the newspaper, checked his bank records, and sure enough, she’d already stolen from him.
In the end, in a court-ordered settlement, the bookkeeper agreed to pay restitution, and eventually did pay back most of what she’d stolen.
This story made me wonder how many small businesses with kind-hearted owners are vulnerable to employee theft because they just can't believe it's possible.
According to the Retail Council of Canada, employees steal an average of $2,500 in cash or goods from their employer before they're caught. On average, customers steal about $175. In addition, the Council estimates 566,000 undetected employee thefts occur across Canada annually.
For insight, I turned to Mike Feiner, loss prevention specialist and my colleague in CDS Consulting Co-op.
In Feiner’s experience, even employers that provide good wages and benefits, opportunities for advancement and great co-workers can still be subject to theft. “People can operate with a split consciousness and find ways to rationalize what they know is wrong. “Address the opportunity first,” he advises. “The motives we can’t control.”
If you’re thinking, “I don’t want to live in fear and suspicion of my staff,” Feiner’s advice may counter that impression. He recommends regular individual check-ins. “Get to know who they are, what’s happening in their lives, any signs of stress. You might find creative ways to help them such as changes in schedule or getting financial counselling.” You are sending the message that you care, but also the message that you’re paying attention to what’s going on in the store.
Focus on your policies and procedures to make sure they are clear and well understood. For example, an overly complicated staff discount system can be open to misinterpretation and abuse. If there are no portion controls, employees could be tempted to put more ingredients in a sandwich made for a friend than for other customers.
Have someone besides the cashier check the cash in the till at closeout. Regularly check your POS reports for line items showing an extraordinary number of voids. If you find them, start paying attention to what’s happening at that till.
Even check the dumpster from time to time. Feiner says, “Hiding stolen goods behind or in the dumpster in a trash bag is one of the most common forms of theft.”
If you don’t do your own books, reconcile the books with the bank statements yourself instead of leaving it to your bookkeeper. Talk to your bank about safeguards such as an alert when deposits seem unusually low.
Would your employees steal from you? Hopefully not. But stay aware. As Feiner says, “If you’re not looking for employee theft, you’re not going to see it, but it’s often right in front of your face.”
To contact Feiner about loss prevention strategies, please go to:
Failure is the quickest way to success. The faster you fail and learn from your failures, the faster you will determine a way to succeed.
Thomas Edison is a classic example. When he was asked if he was discouraged after attempting thousands of times to invent the light bulb, he replied “No, I am thousands of times closer to making it work.” Passion with persistence overcomes the fear of failure.
A recent study made to fail. There were three groups
1. Business people
Each group was given spaghetti, marshmallows and duct tape. The objective was to build the highest structure to hold marshmallows.
They had 15 minutes to discuss among each other and 18 minutes to build. The kids won. The engineers came in at a close second and the business folks came in at a distant last.
Why did kids win over educated, experienced adults? Kids started immediately putting it together, failing over and over, until they got it. The engineers took some time to discuss but then started failing. Meanwhile, the business folks sat around discussing it so by the time they started, it was too late to learn from their mistakes, leaving them far behind.
So perhaps instead of sitting around ad infinitum in a “bored” room with the management teams discussing the annual sales plans, strategic initiatives, sales marketing objectives, competitor’s activities, budgeting proposals, and appeasing the bean counters so no one looks bad - Just Do It!!!
The ability to listen has been proven to build trust, lower sales resistance, build self-esteem and heal. A feeling of trust is the key to long-term customer engagement. But how do you listen? When a customer is speaking, make sure the spotlight is on them, not you.
Questions combined with active listening increases sales and customer retention. Ask questions to clarify the need of the customer. For example: “Do you want a therapeutic or preventative strength natural medicine? Have you been on a cleanse before? Have you used XYZ? Are you on medication?”
These types of questions help you quickly identify an effective choice so the customer is satisfied with results. It also gets the customer speaking, which allows you to listen attentively, creating an energy of trust and respect. With mindful practice to listen better, you will notice positive results in your personal relationships, and in your overall wellbeing.
I understand in today’s high-traffic stores, engaging customers is becoming less and less possible. Yet it is the foundation of our industry – to share the unique benefits of the products we sell.
Look how difficult it is to keep up with all the new products on the market with a wide variety of ingredients from all over the globe. Is it organic, free trade, non-GMO, ethical, gluten-free, grass fed, vegan, paleo, local, etc….
The “interNUT” is full of nonsense on natural heath products which as you know brings in customers with all sorts of ‘ideas’ about natural health. Some sound whacky and some are intentionally created to deceive.
Most stores have well-trained staff with accredited nutritional expertise to help guide the consumer to make a good choice within the ever expanding natural lifestyle movement. Yet sharing knowledge is not the best way to build trust.
The words you use during a conversation with the customer have little effect on building trust or engagement. Some studies suggest only a seven per cent effect. Your tone of voice and body language speak far louder than words of nutritional advice in building long-term customer relationships.
In Whatever Arises Love That by Matt Kahn, he has these loving words on listening: “When human interactions become a way of practicing self-acceptance by treating others with more patience, kindness, and respect, a constant need to be heard drifts into listening as an act of love”.
I believe the business that listens best will become the trusted voice of natural health in the local buying community.
Many retailers are stressed at the thought of what is happening in the health food industry right now. Amazon buying Whole Foods, the erosion of margins with online shopping, and more and more products showing up in the mass market.
If you want to survive as a health food retailer in the next couple decades, you are going to need to do things differently than you did in the past.
To survive, health food stores are going to need to have their own brands that are not available everywhere. To have access to this, health food retailers will need to have a supplier that is giving them brands of products that are not available in the mass market. While you may feel you need some mass market products, your customers are coming to you because you are the trusted advisor. If you have the knowledge to help them address their problems and concerns, they will buy what you put in their hands.
Health food stores who survive the change in the retail environment will have to have specialty niches where they are able to identify their potential customers and offer them specific products to satisfy their needs. Perhaps this is an anti-aging clinic, the men’s testosterone stop, or the skin care centre. This may mean that you will have to do things that you didn’t do in the past: offering services that are difficult to do, or products that are hard to get. Health food retailing will be getting harder, but the creative will thrive.
Millennials, Generation Xers and upcoming generations are going to want the human aspect of retailing that baby boomers had and then some. While we all might be on the computer more, we all crave to be touched, spoken with and humoured. Physical touch and real human presence is hard to experience over the computer. Brick and mortar health food stores will be around as long as they can offer this. Store owners are going to have to encourage their staff to develop meaningful relationships because this is what customers want.
It’s true that 3D is coming to retailing online, but you can’t taste food, feel fabric or smell scents online. Health food retailing is going to need to give customers even more experiences that fill the senses.
It was once the case that you could open a health food store because you wanted to help people have a chance of success. The chance of success now has been significantly reduced. In the past, store owners would spend money in advertising without measuring the results and set margins and price products upon a whim. Look at financials once a year and rely on your accountant to interpret them. Future store owners are going to need to be strategic, cunning and knowledgeable to thrive. Those that understand how business works and how they can create value for their customers, are going to be successful.
Health food retailing is changing but those who can adapt will be able to feed their families, hire great staff, help their customers and contribute to their communities for years to come.
Do you have someone on your team who you think of as “high-maintenance”? What do we mean when we throw around that phrase? The workplace behaviours I’ve heard supervisors describe include:
Demanding the supervisor’s constant attention
Dependency, needing ongoing direction
Endless questions, concerns and problems with any work assignment.
Note that all these behaviours are inter-related. And they involve a pattern, not one-time events.
Recently, I came across the concept of the “Adversity Quotient.” Dr. Paul Stoltz defines the Adversity Quotient as “the capacity of the person to deal with the adversities of his/her life.” The high-maintenance employee has a low Adversity Quotient. Instead of meeting challenges with resilience, they blame others and make excuses.
And somehow there are always things going wrong in the lives of high-maintenance people. They are perennially at the centre of some sort of drama.
Up to a point, I’d say that it’s your job as a leader to rise to the challenges that high-maintenance employees bring to the workplace and help them make the most positive contribution possible. Some really high performers can be a challenge to manage or work with together on a team, yet the value they bring to the organization outweighs their less desirable behaviours.
If you find that you are continually avoiding or ignoring someone you consider a high-maintenance employee, it’s time to get analytical. Did they get proper training in the first place? Do they have objectively more on their plate than they used to have? Would they benefit from more structure, more directives from you, rather than a hands-off management style that their co-workers seem to prefer?
And what’s your part in this? Could your own instructions be clearer, or expressed more effectively for this person’s learning style? Could you be more generous with praise and appreciation to help build their confidence? Are you setting and upholding boundaries so that you get uninterrupted time periods to focus on others or your own work?
Or are you allowing the high-maintenance employee to cross those boundaries and take up your time whenever they want, even if you resent it?
After examining your role in the dynamic with the high-maintenance employee and resolving to change some of your own behaviours if needed, you can coach this person on alternative approaches they could take for a more productive work relationship. For example:
Let’s say you take all these steps and you notice some improvements – a little more self-sufficiency, fewer complaints, some follow-up on your suggestions. If that happens, be sure to let the person know you’ve noticed and you appreciate their efforts. People do more of what they receive positive reinforcement for doing. They tend to lapse back into old behaviours in the absence of that positive reinforcement.
If there’s no sustained improvement? If the high-maintenance employee is otherwise doing good work, you’ll just have to maintain your boundaries and be sure that they get no more than their fair share of your time and attention. If they are performing poorly, follow your steps for corrective action, just as you would for any other employee. •
Rebecca Torpie, former marketing manager for a natural foods co-op in Philadelphia and now a consultant in marketing and brand strategy offers some insight on exceptional customer service.
Even with brick and mortar retailers struggling against online stores, and the mass market undercutting prices on natural and organic products, our industry has an opportunity for competitive advantage—offering exceptional customer service. Is there room to up your store's service game?
Recently, I had a conversation with my colleague Rebecca Torpie, former marketing manager for a natural foods co-op in Philadelphia and now a consultant in marketing and brand strategy.
Carolee Colter: Define customer service...
Rebecca Torpie: There are several pieces to customer service. This includes having operation systems in place to meet basic expectations; for example, having an accurate POS, adequate parking, and clean washrooms. Beyond that, customers have expectations to be wowed and delighted.
Carolee Colter: How do managers make certain that wowing and delighting occurs in their stores?
Rebecca Torpie: First, leaders must articulate to the staff what it means to be a great customer service operator. If you can’t articulate it, you can’t share it. You need a customer service philosophy. Using an “off the shelf” philosophy developed by others is okay as long as you follow through and ensure that philosophy is used throughout the entire store.
Then you need to ensure training is done systematically for all employees at all levels, and not just for new people. Plan for training, say, every quarter or every six months.
Carolee Colter: What methods work best for staff training?
Rebecca Torpie: There should be written materials for trainers to follow to ensure consistency in what people are taught over time and across departments. Role playing works very well for practicing responses to difficult interactions so that people feel prepared. Be aware that role playing could make people uncomfortable, so keep them light and fun. And make sure staff feels comfortable going to their managers with a question.
Carolee Colter: How about training for internal customer service?
Rebecca Torpie: Customers observe how staff members interact with each other. In the training, address how to handle peer-to-peer interactions, including across departments.
Carolee Colter: At a store I consulted for, they had a saying, “Stay, listen and learn.” If you don’t know the answer to a question, take the customer to someone who knows the answer and then stay and listen to your coworker’s response and learn the answer for next time.
Rebecca Torpie: Also, budget for desk time and research time in employee schedules so they can learn about the latest products. Cultivate a culture of using downtime for learning. Also take advantage of sales reps’ offers to train about new products.
Carolee Colter: Another learning opportunity comes if a manager needs to step in to “make it right” with a dissatisfied customer. Then the manager can debrief with the employee, do active listening, acknowledge any bruised feelings and coach on how to handle it next time.
In the end, the culture of an organization is what the leaders actually do, not what they say. Should leaders always be asking themselves, “How do I personally delight and wow the customers?”
Rebecca Torpie: Leaders certainly do model for the rest of the staff. You can’t expect the staff to do what you won’t do.
Carolee Colter: How about leaders who are introverts? Once an introvert explained to me that everything he did in public was “theatre.”
Rebecca Torpie: Some people have a high comfort level interacting with customers, others less. But customer service is a part of doing business. You need to put on your social face and not fake it. It’s about quality, not quantity. If you make two good touch-points with customers that are excellent, that’s better than ten that are mediocre. •
Which silver car is it? Tony Kibonge shouted, as I tagged a car and he raced by. This race to the silver car was a re-match of another race I had won one cold morning in Stuart Lake. We had raced through the water up to my chest and Tony’s neck! While I had won both races, the truth of the matter is that Tony – who is 13 years old – is a much faster runner than I am. In fact I think he might be one of the fastest 13 year olds in the country. However, in both races, I made sure that I had distinct advantages. I really had no intention of losing, although in both races it was a real possibility. More on that later.
But what about you? Are you intent on winning with your store? Do you have a strategy or are you going up against, quicker, faster, better competition and just hoping that you are going to win, without really even a hope? So often we are going against competition that is so stiff that our goal is just to keep our heads above water and pay the bills.
So why don’t we change the game? When I raced against Tony Kibonge and his class the first time in a lake, I knew I had a clear advantage. I knew that I weighed 100 lbs more and was a good eight inches taller than Tony and this would help me as I moved against the water in the lake to the finish line. In business, we often think that we have to run the race that our competitor has already established an advantage in. I knew that if I was to race Tony in the 100, 200 or 400 meters that he so loves to race, I would be left in the dust. So I don’t race those races.
In the health food business, we too need to change the odds so that they are in our favour. We need to think about what we are better at than our competition, both online and mass. If our competition has better prices than us, then, we better focus in an area where we can add value and price is less of an issue. This may be great service or exclusive products. To distinguish ourselves, we need to really be different and find customers who are willing to pay for that difference.
And what does winning mean? In every race, there is a finish line and a goal that we are striving for. However, most small retail health food stores don’t have real goals. We are just plodding along hoping that our store is going to grow without having any real plans, any targets for sales or marketing, profit, or any other measurable outcome.
For example, “Sales Target: by 2020, we will have two million dollars in sales.”
Focus only on areas where you have an advantage. Know where the finish line is, and celebrate each and every accomplishment. Make your health food store a winner! •
To answer these questions, I turned to Holly Fearing. As a social media advisor with the Filene Research Institute at the University of Wisconsin, she helps credit unions, co-operatives, small businesses and non-profits use social media channels to find and connect with their target audiences. She’s also president of the board of Willy Street Co-op, a three-store natural foods co-op in Madison, Wisconsin.
Informally, employees can share your store's posts on their personal social media channels, Holly suggests, and even add a personal connection that will resonate with their followers, e.g. "This is a perfect example of why I'm so proud to work for my store!"
However, you could have a more formal program with certain employees designated as “brand ambassadors.” By asking for volunteers, you’ll likely get the most enthusiastic staffers and also give a voice to an individual or department that feels under-represented.
At one natural foods retailer, an employee who took photographs as a hobby became a brand ambassador. Her artistic photos of products are now featured on the store’s social media.
Brand ambassadors can also respond to customer questions on social media in a customer service capacity much as they would if roaming the floor and were asked a question.
Another role for staff on social media is as recruiters. If any of your people are on LinkedIn, they already have the capability to connect and network with others in our industry. “There's a networking group for almost any professional topic,” Holly says, “and people really help each other out with ideas in LinkedIn groups. It's also a fantastic place to advertise job openings, recruit new talent and showcase your organization's culture for those looking at your store to potentially apply for a job there.”
Of course you need to stay in compliance with your provincial Employment Standards. If an employee voluntarily chooses to share store posts on their own social media, you can thank them but make it clear that they are not “on the clock” when they do so.
However, if you ask an employee to be a brand ambassador or recruiter on social media, their time must be paid. And you’ll want to put some boundaries around their hours on social media so that they don’t inadvertently run into overtime. Holly gives an example of a food co-op that set 10 per cent of an employee’s hours for brand ambassador activities. This full-time employee then knew she had four hours a week to spend on social media.
With the proliferation of mobile devices, this time might not all be spent sitting in front of a computer; it could also involve roaming the floor, taking photos and texting. To avoid the impression that an employee is using a cell phone on personal business, Holly suggests wearing a button with a message like, “Hi! I’m a brand ambassador.”
Finally, I asked if millennial customers and employees tend to favour social media more than other generations. Holly replied, “Millennials were the ones who cracked the nut of what is possible in digital communication channels. But all generations are using these channels now.”
For more ideas on social media for your store, you can contact Holly at email@example.com. •
Rick Kroetsch, associate publisher of Alive Publishing Group had some wonderful information to share with retailers who attended the Puresource retailer conference in June. The basis of his presentation was to inspire attendees to be opened minded in their quest to make their stores healthier.
(CASL) came into effect back on July 1, 2014 and while Canada was late to the anti-spam movement, it caught up fast with one of the toughest and widest reaching anti-spam regimes to date.
(CASL) came into effect back on July 1, 2014 and while Canada was late to the anti-spam movement, it caught up fast with one of the toughest and widest reaching anti-spam regimes to date.
But CASL applies to much more than traditional “spam.” CASL applies to all your electronic messages (think email, text, SMS, etc.) that you are sending in Canada, if any aspect of the message encourages participation in any kind of commercial activity. You can stop reading this article now, if you already know that CASL (with a few exceptions) essentially prohibits sending commercial electronic messages (aka CEMs) to anyone in Canada without their consent.
Under CASL, consent can either be “express” or “implied.” Express consent is preferable because it remains valid until it is revoked. In order to obtain express consent, you must clearly disclose: (1) what you are seeking consent to send (promotions, sales, etc.), (2) information identifying the sender, and (3) mention that the party may unsubscribe at any time.
Implied consent, for example, is valid for six months from the date the recipient sent a request for a quote to the sender, unless withdrawn sooner. Implied consent also applies if there is an “existing business relationship” between the sender and the recipient, based on the purchase of products or services between the parties within the past two year period preceding the date the CEM was sent.
CASL’s provisions allow CEM type messages to be sent without full CASL compliance in a B2B context such as messages sent within an organization, or by an employee, representative, consultant or franchisee to another employee, representative, consultant or franchisee of that organization, in connection with the activities of that organization or to another organization, if the organizations “have a relationship” and the message concerns the activities of the recipient organization.
Messages sent in the context of a “Family Relationship” or “Personal Relationship,” are also exempt. In this case, “family” means individuals related by marriage, common-law partnership or a legal parent-child relationship and a personal relationship typically means individuals who have had in-person, voluntary, two-way communications where it would be reasonable to conclude that they have a personal relationship.
CASL also contains provisions that permit one commercial electronic message to be sent following a referral by any individual who has an “existing business” or “non-business relationship,” family or personal relationship with the person who sent the message and that discloses the name of individual that made the referral and the fact that the message is sent as a result of the referral.
You run the risk of potential significant penalties and lawsuits. CASL provides for either actual damages or statutory damages of $200 for each violation, up to a maximum of C$ one million/day for individuals and C$10 million/day for corporate entities. In determining the final amount of damages to award, courts analyze the personal/corporate history of the violator(s), the financial benefit obtained and the nature and scope of the violation(s). Considering that marketing campaigns may involve millions of CEMs, potential damages under CASL may escalate very quickly. A person can seek to avoid liability for a violation by showing that it/he/she exercised due diligence to prevent the commission of the violation, among other common law principles.
The first notice of a CASL violation involved 3510395 Canada Inc. (doing business as Compu-Finder), which was slapped with an administrative monetary penalty of $1,100,000 for repeatedly sending CEMs without recipients’ consent, as well as sending CEMs without a properly functioning unsubscribe mechanism.
In the third public CASL case, Porter also entered into a voluntary undertaking with the CRTC after Porter was found to have sent CEMs to email addresses for which it was not able to provide proof of consent, as well as sending CEMs that did not provide complete contact information required by CASL. Other CEMs sent by Porter either contained no unsubscribe mechanism or one that was not set out “clearly and prominently”, and there was at least one instance where the unsubscribe mechanism was not given effect within 10 business days as required by CASL. Porter’s penalty was $150,000 and Porter was obliged to take corrective measures such as updating its mailing list and ensuring that its CEMs met form requirements, as well as implementing a compliance program.
Rogers Media paid $200,000 as part of an undertaking to resolve alleged violations of CASL. The CRTC’s investigation alleged that Rogers Media failed to comply with various CASL requirements between July 2014 and July 2015. During this period, the company allegedly sent commercial emails containing an unsubscribe mechanism that did not function properly or which could not be readily performed by the recipient. In addition, in some instances, the electronic address used to unsubscribe was allegedly not valid for the required minimum of 60 days following the sent message. Rogers Media also allegedly failed to honour, within 10 business days, requests from some recipients to unsubscribe from receiving future commercial emails.
As of July 1 of this year, Canadians will also be able to launch private and class action lawsuits to collect damages for violations of CASL. Because the CASL requirements are so broad, so strict and so easily violated, most people expect to see a flood of CASL-specific class action lawsuits. The private right of action allows parties to sue for actual and statutory damages. Statutory damages could prove to be quite significant. If your organization has cyber / privacy liability policies, you may want to determine whether they cover third-party claims, class actions and penalties arising out of privacy/CASL violations. You may also want to check any applicable directors’ and officers’ liability policies, as they may exclude marketing or privacy violations.
My friend Aaron likes to tell the story about how he arrived at a hotel and how they greeted him at the car. Shortly after, a staff member said, “Aaron, you’re a Manchester United fan, aren’t you?
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