14 Aug Four Digital Strategies to Take Advantage of the Exchange Rate
This week saw the Canadian dollar drop to its lowest level since 2009 (source), but it’s not all good news. In fact, many have taken the news negatively, but there are four ways you can take advantage of the dip.
A Weaker Dollar Means Americans Vacation in Canada
The immediate effect of a weaker Canadian dollar is Americans gain a stronger purchasing power. Thus, the incentive to come up North is more appealing. In fact, in May of this year there was a 2.5% increase in the number of tourists visiting Canada–a 15-year high (source). However, it’s not only holidays. When the American dollar stretches further, cross-border shopping becomes more attractive.
Start thinking internationally. Specials targeting Americans, say over a long weekend, could be particularly appealing. It’s also worth considering that there will be more impulse visitors. Americans over for a shopping trip might just want a room for a night; last minute specials could be just the thing to get them through customs.
This is where PPC campaigns can be a particularly effective. It takes seconds to create ads and target specific geographic locations, creating and delivering special offers can be done depending on the day’s exchange rate, time of year and any number of other factors.
Canadians Tend to Buy Locally
When economists think of exchange rates, as they often do, they start from the assumption that a weak loonie is good for exporters and bad for importers. If you want to sell something Stateside, Americans are more than happy to buy at those lower prices. Import a product, and those incentives switch, it’s suddenly more attractive to purchase at home. Therefore, many Canadian businesses over the long-term will start looking for local suppliers.
What this means is that local SEO is even more important than before. For the uninitiated, local SEO is the practice of optimizing your website so that you can specifically gain higher local search rankings. The strategies mirror a more global SEO approach, but they emphasize different factors and collect different data. To oversimplify it a bit, ranking for a more generic keyword like “shoes” wouldn’t be less important than something local, say “shoes in Vancouver”.
SEO strategies that reflect such practices could attract more home-based businesses, businesses that would otherwise look abroad for the services/products you provide.
American Businesses Tends to Buy Canadian Capital
Many manufacturers and distributors might soon discover that they have a warehouse full of capital goods that are suddenly very interesting to American business.
In the past, shipping and exchange rates may have cut into margins, but now that the exchange rate has gone in America’s favour; many American businesses could find competitive advantages up here. This is especially important when considering that specialty equipment can cost thousands upon thousands of dollars. A favourable exchange rate can really influence purchasing decisions.
Therefore, take the time to see what your American competition is doing, how they are selling their products and if possible, who is buying them. Researching the American markets with the intent of reaching out to them could be very fruitful.
Tuition in Canada is Cheaper
I’m ending on this one because it combines all the strategies. Canada has diverse, safe and multicultural cities. It’s no wonder why thousands of international students come here each year. Also, when you’re looking at the price of tuition, 70 cents on the dollar is a pretty good discount.
A target online advertising campaign can quickly be focused on the US (think escaping a freezing Michigan winter for a balmy Vancouver one). Local students who were thinking about going to school in the US might consider staying at home for the comparative savings.
Overall, the exchange rate might be bad for some, but taking the time to see how it can open up new markets for your business could be just the thing as summer winds down and the back-to-school shopping season begins
What do you think? Do you have any suggestions on how to take advantage of the weaker Canadian dollar? If you’d like to learn more about digital marketing strategies, check out this previous post. Otherwise, here’s an infographic showing what a strong digital marketing strategy looks.