Canada Post Direct Marketing Business Presentation to NAMMU August 25, 2010

1. Canada Post Direct Marketing BusinessPresentation to NAMMUAugust 25, 2010 CONFIDENTIAL

2. For this session … • Highlight what we are doing to help drive growth of the mail stream. • Discuss why Data Hygiene is an important issue impacting all of us • Review modifications to our approach

3. The Conversation begins here … My Goal : “GROW THE MAIL STREAM”

4. - 1.4% - 13.4% 4.9% 3.7% The Canada Post Direct Mail Growth Story Addressed Admail Volume Growth 2002 to 2009 0.4% CAGR

5. My Strategies … Educate Enable Improve

6. Educate Enable Improve FOCUS: Educating the marketplace; Encourage Trial; Shift from mass to DM; Promote best practices ACTIVITIES • Case Studies • White Papers • Research studies • Seminars, webinars and events • Consultation services (DM Advisors) DM Advisor Tool Online Rich Library of Case Studies

7. Educate Enable Improve Webcasts – Currently Available • Basic principles of Direct Mail • Finding your target audience • Enhance your offers and the call to action • Find new customers with Addressed Admail™ • smartmoves™: Keep up with customers on the move • Reach potential customers with Unaddressed Admail™ • Expand your business into the Canadian market

8. Educate Enable Improve Extensive White Paper / Research Library Now Available to Marketers • The easiest 5% ROI lift you might ever achieve (October 2009) • Acquisition Marketing in a Multi-Channel World (August 2009) • Marketing in a Downturn (March 2009) • Media Response Rates (U.S. Market) (January 2009) • Automotive Industry and After Market (December 2008) • Customer Attitudes Towards Direct Marketing and Mail (October 2008) • Implications of Marketing Trends (October 2008) • New Environmentalism (May 2008) • Canadians and their Catalogues (June 2007) • Mover Behaviour in Canada (June 2007) • Non-Profit and Voluntary Associations (April 2007)

9. Educate Enable Improve Providing “basics” for DIY and New Users • DM Advisor • online tutorial, demonstration tool for planning DM campaign • Campaign planning tool kit • Templates and worksheets to assist DM project management • DM Online • Full service solution for DIY small users

10. Educating the Marketplace Canadapost.ca/DMResources Case Studies/Success Stories Webcasts Market Research Studies Environmental Tips Privacy Tips Campaign Management tools Other articles and tutorials

11. Educate Enable Improve SUITE OF NEW PRODUCTS Products recently launched to help improve the effectiveness of mail and grow mail volumes • Acquisition Admail (January) • New Lists (January – April) • Address level data for every home and business in Canada • Multi-dwelling addresses • New Addresses (new homes) • Smart Data Cleaner (August) • New Machineable Presort Product (Jan 2011) • Point of Call level Address Accuracy (Jan 2011)

12. - 1.4% - 13.4% 4.9% 3.7% The Canada Post Direct Mail Growth Story Addressed Admail Volume Growth 2002 to 2009 0.4% CAGR

13. What should be keeping all of us up at night … • Consumer attitudes – ‘welcomeness’ of mail  WASTE IS AN ISSUE • Growth of alternative ‘personalized communication’ media  BATTLE WILL BE WON ON EFFECTIVENESS • Effectiveness of mail is declining  LACK OF TESTING PRACTICES  POOR QUALITY MAILING LISTS/DATA  GROWING UNDELIVERABLES = DECLINING RESPONSE RATES

14. Addressing Marketing Effectiveness Data hygiene is a growing problem in Canada

15. Data Hygiene is a CRITICAL and URGENT Issue for all of us • It costs Canada Post about $30M / year to handle the approximately 140 million pieces of Undeliverable mail each year • It costs the marketers approximately $140 million to create and mail these pieces • It costs marketers even more $$ in lost sales/response/store traffic

16. Data Hygiene is a CRITICAL and URGENT Issue for all of us More importantly (and much more costly to all of us) … Mailers are ‘TURNING OFF THE MAIL’ because it is not working Poor data quality has become The SILENT KILLER OF MAIL The real challenge: MAILERS DON’T KNOW WHAT THEY CAN’T SEE

17. Most Mailers are Unaware of the Issue In 2008, CPC implemented research study What they said (at first) … • 63% estimate file greater than 95% accurate / deliverable • 75% do not measure undeliverable • 69% could not estimate financial impact Based on 601 CPC Addressed Admail Customer interviews July 21st to August 1st, 2008.

18. Address Accuracy & Address Correction not well appreciated or used • Address Accuracy: • Only 26% claim to use it… Of those 52% do not run with every mailing • Address Correction: • Only 14% use it… of those 76% do not run with every mailing • Primary reasons not used: • Believe customers update them and • Lack of time

19. National Change of Address rarely applied • Only 16% of mailers surveyed use it • of those 60% do not run with every mailing • 62% are ambivalent to using it….. • Companies believe their customers update them and it is not cost effective • ‘Deceased’ suppression not top of mind

20. The RESULT! Annually, Canada Post estimates that more than140 million pieces of mail are incorrectly addressed

21. The largest driver ……movers • Primary Issue (65%):Movers • Secondary Issue (35%):Inaccurate addresses dominated by missing apartment/suite numbers

22. Addressing the Issue 3 Elements to our Strategy : • Mailer awareness, education & demonstration (“MAILERS DON’T KNOW WHAT THEY CAN’T SEE”) • Ensure market access to basic hygiene tools • Improve existing data hygiene tools • Address Accuracy moving to ‘Point of Call’ base in 2011 • NCOA improvements / enhancements underway

23. WHAT’S IN IT FOR ALL OF US … • Growth of the Data Services industry • Low usage of COA tools and to a lesser extent address accuracy tools  Market awareness / mailer education will grow the category. • Growth of the Mail Stream • Cleaner mail = HIGHER response rates / ROI = MORE MAIL.

24. We Are All In This Together We all have a responsibility to • Educate our customers & prospects • Promote the usage of hygiene tools • Quantify / Demonstrate the impact • Secure Usage

25. Smart Data Cleaner VAM Reset Strategy

26. NAMMU position Direct selling of CPC data cleansing services to mailers will level an unacceptable negative impact on NAMMU members The diagnostic service provided by CPC is useful and important but commercial cleansing of records should be the responsibility of VAMs The educational offerings from CPC on data hygiene are important and continuing these efforts is desirable CPC pricing may have a negative impact on VAMs A closer relationship between CPC tools and exclusive access within the Partner Program is desired CPC Position There continues to be a lack of adoption of data hygiene in the industry and education and tools are required to reduce undeliverable mail For CPC to continue to invest in driving adoption of data hygiene, a sustainable solution is required Not all VAMs have access to tools to support mailers and not all mailers use VAMs CPC pricing was based on accessible published rates; with no clear benchmark, CPC took a competitive position to not degrade the value of cleansing The CPC partner program is designed to enable companies with solutions to drive mail; conflict will arise when there are competing offerings available for any type of service Summary of the Issues

27. CPC approach to address NAMMU VAM concerns The diagnostic tool and education offerings are essential to bringing awareness of undeliverable mail to mailers and to drive data hygiene tool adoption – this will continue as planned. For maximum impact to the mail stream CPC must deliver solutions that are widely accessible to all enablers in the mail process, so providing all Partner Program VAM’s with the option of accessing Smart Data Cleaner will continue Replacing the turn-key VAM experience is not the intent of Smart Data Cleaner, and thus direct to mailer offerings will be limited with LCP only available for the VAM offer. CPC pricing was based on available rates. NAMMU was asked to demonstrate industry benchmarks on parity products so a formal review of SDC pricing could be undertaken. NAMMU declined. Market messaging of SDC will be revised to reinforce the VAM role ( see following page) and limit mailer direct access to SDC CPC will monitor the market awareness and adoption rates and revisit the market strategy in 2011 if necessary.

28. Revised Smart Data Cleanser Messaging CPC recognizes that mailers have choices and respects the relationships that exist with the VAM community To ensure that SDC reinforces current relationships, all mass and direct marketing of the service will focus on the diagnostic tool first and foremost with a drive to the CPC website for more information or to the mailer’s VAM partner The Customer Selection presented on the CPC website will include the following: • Run the diagnostic or use the estimator to determine the benefits of data hygiene ( the quote tool is still required but will be positioned as a way to help mailers understand the “price of hygiene”) • Once you are convinced that you need to take action you should: • First: Speak with your current VAM regarding data hygiene best practices and services • Second: If your VAM does not offer these services or you do not have a relationship with one, you can access SDC through one of the companies in the CPC Partner program • Lastly: If you choose to, you can have your data cleansed through CPC online in a self-service manner

29. Key Changes Made

30. Web/Report Changes Web site updated to give more exposure to VAM’s/ MSP's Diagnostic and Cleansing reports modified to highlight Partner value Smart Data Cleaner – VAM Reset Strategy Overview • Marketing/Sales • Direct mail, Search Engine, Online campaigns scheduled for August 30th • Venture One cross promotion and CMA Conference scheduled for September • New Partner specific sales collateral being developed

31. VAM Reset Strategy – Web Changes Data and Targeting Solutions home page Smart Data Cleaner home page Diagnostic and Cleansing page Diagnostic reports New Partner specific sales collateral being developed Smart Data Cleaner – VAM Reset Strategy Web Changes

32. Smart Data Cleaner copy changed to highlight education. Data and Targeting Solutions Home Page

33. Smart Data Cleaner Home Page – Re-Order • Rearranged the main points to focus on education first and foremost

34. Smart Data Cleaner Home Page – FREE diagnostic • Added VAM and Partner Directory reference

35. Smart Data Cleaner Home Page – Icons • Instant Quote icon removed from the Smart Data Cleaner home page • FREE Diagnostic link emphasized by making into an icon

36. Smart Data Cleaner Run a Diagnostic Page • VAM copy and link to Partner Directory added

37. Smart Data Cleaner Clean Your List Page • VAM copy and link to Partner Directory added

38. Smart Data Cleaner Savings Calculator Page • VAM copy and link to Partner Directory added

39. Smart Data Cleaner My Orders Page • VAM copy and link to Partner Directory added

40. Non-VAM VAM Smart Data Cleaner Diagnostic Report – Changes to Page 1 • Introduction on Diagnostic report rewritten for VAM version

41. VAM Non-VAM Smart Data Cleaner Diagnostic Report – Changes to Page 4 • Benefits statement and pricing removed from VAM version of the Diagnostic report

42. Call to Action for all of us … THE HEALTH OF THE MAIL CHANNEL IS AT STAKE It is up to all of us to help our customers make their mailings more effective and efficient, thus ensuring our well being of the mail stream and the future of the mailing industry.