Seeking overseas success

Jan 01, 2005 10:30 PM  By

After a few years of waning interest in marketing overseas, a number of U.S. merchants are stepping up their international efforts.

According to Mark Bridges, senior vice president, international division for Hackensack, NJ-based list services firm MokrynskiDirect, response rates for international mailings have improved 5%-10% this year, helped significantly by the weak U.S. dollar. “It’s a big advantage for U.S.-based catalogers,” he says, “although nothing on which to base a mailing plan.”

But don’t think you can simply mail your existing domestic catalog overseas and wait for the orders to roll in. “Success will be built upon a solid market entry strategy that requires more than adding a new list to the current circulation plan,” says Casey Carey, director of marketing, data solutions for Broomfield, CO-based database services provider DoubleClick. “Instead, it’s a complex business requiring investment, risk, and commitment.”

The name game

First things first: Don’t mail into a country without researching the number of pertinent rental names available. This will help you determine if the market is large enough to warrant your marketing investment.

For instance, Canada’s underdeveloped list universe is why many U.S. merchants have not marketed there, according to Al Lee, director of sales, central Canada, for Weston, FL-based DHL Smart & GlobalMail. “Therefore the early international adopters have had to execute different customer acquisition approaches,” he says.

One such method is unaddressed distribution, a two-step sales process to generate catalog requests. One prominent U.S. mailer, Lee says, worked with DHL Smart to ship postcards without recipient names and addresses into the Canadian postal mail stream. The catalog selected which postal codes it wanted the postcards delivered into; the local mail carriers delivered one postcard per address along with the rest of the mail. Because the cards did not have to be sorted through the postal system, they qualified for lower rates. Recipients who wanted to receive a catalog simply mailed back the postcard.

In addition to prequalifying catalog requesters, the postcards “drive customers to the Web,” Lee says, “and build sales at a fraction of the cost of the catalog. This is a cost-effective method to test the Canadian market at little expense.” The cost of producing and delivering the postcards is approximately Canadian $540/M. In comparison, the mailing costs alone for an 8.8-oz. catalog is Canadian $770/M — and that doesn’t include catalog production and printing costs.

When you are checking rental list availability, keep locality in mind. If you plan to mail your existing U.S. catalog — a practice that’s not recommended, by the way — rather than create a localized version for that particular country, at the very least rent lists only from other companies that follow the same practice or whose books vary only insignificantly among markets.

Addressing the issues

If you think you can avoid issues with addresses by accepting international orders only via your Website, think again. Overseas addresses are typically longer than U.S. addresses. They also tend to be formatted differently. According to MokrynskiDirect’s Bridges, many legacy systems used by U.S. Websites cannot accurately accept an international address without modifying the database fields.

If you are mailing internationally, consider working with a mailing house or other service provider to help ensure address accuracy, even if you don’t use a similar service provider for domestic mailings. Washington-based Smithsonian Catalogue, whose mailings to Canada and Japan account for about 1% of its circulation, works with Bennington, VT-based merge/ purge house Global Z International Data Processing Services. Among other things, the mailing house double-checks the label formatting and mailing indicias, which vary from country to country.

An alternative to using a mailing house to help with address accuracy is to invest in a global address verification package, such as AddressDoctorT by DHL Smart. The software, which offers street-level directories and postal codes for more than 200 countries and territories, includes a hygiene tool that identifies incorrect addresses, then uses optimized algorithms to correct them.

Like address formats and indicia requirements, polybagging rules vary from country to country. In some countries, catalogs are undeliverable if they’re not polybagged. In other countries polybagging may not be mandatory but may nonetheless be the standard. While the protective bag does keep the catalog from getting curled and torn, it adds roughly $0.03-$0.15 per piece to the production and mailing costs.

Rules regarding data privacy also vary widely among different countries. Even the European Union member states have conflicting regulations. In Italy, for example, mailers are required by law to suppress mailings to names on the country’s do-not-mail list, says Alastair Tempest, director general of Belgium-based Federation of European Direct and Interactive Marketing (FEDMA). (See “May I mail?” on page 35.) Be aware that there are also strict rules regarding the transfer of European data to other countries, such as the U.S.

Act locally

“The surest way to fail overseas,” says MokrynskiDirect’s Bridges, “is mailing a U.S. catalog overseas in U.S. dollars. With few exceptions, most U.S.-based catalogers can’t get away with it.” Those exceptions are internationally known brands with unique product, such as Tiffany & Co. Otherwise, chances are that a local company sells the same sort of product as you do, priced in local currency — so why should overseas consumers go to the trouble of having to convert currency rates to buy the same merchandise from you?

Even if you offer a currency converter on your Website, duties and tariffs can result in an appreciably higher-than-anticipated final cost to the customer. To help prospects avoid sticker shock — and to decrease shopping cart abandonment rates — Hollywood, FL-based Comerxia offers a multilingual international shopping cart and checkout software solution that can be integrated into an existing Website. During the consumer’s checkout process, the software calculates the applicable tariffs and duties.

Comerxia also handles international distributions. U.S. merchants can send the products to Comerxia’s distribution center, which in turn sends the product to the customers. The company also facilitates reverse logistics should the customer want to return the item.

Beyond pricing, keep in mind the local payment methods in various markets. For instance, while credit cards are the typical method of payment in the U.K., only about 10% of German shoppers pay via credit card, according to Roger Williams, international marketing director for Abacus U.K.

“The Germans are used to being invoiced, and they will often pay right at the end of the allotted time, usually in 30 days,” Williams says. If you plan on marketing in Germany, you’ll need to take the impact on cash flow into account.

Catalog copy should also be in the local language. Even if you’re mailing into a country where the vast majority of consumers can read English, such as the Netherlands or Denmark, translate the copy into the native tongue. “It sends a message that you understand your audience and are speaking to them accordingly,” says Gordon Ellis-Brown, managing director of Winchester, England-based catalog consultancy Sundance Ltd.

When London-based men’s apparel merchant Charles Tyrwhitt entered the German market in 1999, it went through several local translators before finding the right one. “We found that translating our catalog to German is pretty difficult,” says managing director Peter Higgins. The problem stemmed from translating Tyrwhitt’s wry British humor into German.

Doug Sacks, senior vice president of Wethersfield, CT-based list services firm Infocore, estimates that translation services cost $0.12 a word. And that’s not the only additional cost. “What you say in English generally requires more copy when translating,” he notes. “So that requires more space in the catalog.”

And U.K. English, don’t forget, differs from American English. It may not seem like a big deal, Ellis-Brown says, but if you are marketing to U.K. consumers, change the spellings of words such as “color” to “colour” and “flavor” to “flavour.” Some differences go beyond spelling: An American’s sweater, for example, is a Brit’s jumper.

May I mail?

In some countries, use of a do-not-mail suppression list is a legal requirement; in others it is mandated only in the national Direct Marketing Association’s Codes of Practice. These European countries have do-not-mail lists:

Austria (legal requirement)

Belgium (not legal requirement; Belgian DMA members must use it)

Denmark (legal requirement)

Finland (not legal requirement; Finnish DMA members must use it)

France (not legal requirement; French DMA members must use it)

Germany (legal requirement)

Greece (not required)

Ireland (not a legal requirement; Irish DMA members must use it)

Italy (legal requirement)

Netherlands (legal requirement in some sectors)

Norway (legal requirement for b-to-c communications, recommended for b-to-b)

Poland (not legal requirement; required by Polish DMA members)

Portugal (legal requirement)

Spain (not legal requirement; required by Spanish DMA members)

Sweden (legal requirement, with some exceptions)

Switzerland (not legal requirement; Swiss DMA members must use it)

United Kingdom (not a legal requirement; U.K. DMA members must use it, as must members of other advertising groups)