Most marketers understand that America’s demographics are evolving rapidly, as the majority of growth and nearly 40% of the American population is Asian, African-American, or Hispanic. But what’s astounding is that Asians and Hispanics together accounted for two-thirds of total economic spending growth from 2013 to 2014.
Marketers must shift their budgets towards multicultural marketing initiatives to reach this huge consumer market, but most haven’t had the support to execute. 55% of marketers feel that they lack buy-in from their CEOs, while 60% feel that they lack support from the CMO. The end result is disconcerting: almost half of marketers do not have a multicultural marketing plan in place.
So if marketers lack the support needed to drive growth from new markets, how should they approach their bosses to drive change?
Explain Key Trends and Statistics
Nothing sticks like quantitative proof, and these staggering numbers will stop CMOs in their tracks. The majority of growth potential stems from segments like Hispanics, Asian-Americans, and African-Americans; by 2020, these groups will account for nearly 130 million of the total U.S. population, or 40% of the total population. This is a 7% increase over five years; if any CMO believes that reaching this 40% -- which represents the majority of population and spending growth -- is not a top priority, then you need to check with your board of directors. After all, top investment banking firms recommend that institutional investors short the stock of companies which lacked a Hispanic focus.
If we measure lifetime value of consumer segments, then Hispanic and Asian households will spend on average about $310k and $800k, respectively, more than white non-Hispanic households. This offers huge growth potential for brands in terms of ROI, profits, and stock value appreciation. Investing in multicultural marketing is about more than the present; it’s about looking into the future. Companies like Walmart, AT&T and Coca Cola certainly get this and are investing behind it, but many still have yet to realize how important investing in multicultural is for their companies – and frankly, for their own bonuses and careers.
Make the Numbers Relevant
Once you, as a marketer, have presented the facts to your CMO, CEO, and boards of directors, it’s crucial to make clear why the statistics actually matter to your specific brand. Specifically, pull numbers about who purchases your product; what percentage of your consumers are multicultural? Where do they live? What are they buying? How much are they spending? Are you competitors implementing multicultural marketing strategies and earning higher profits than your company? It is much easier to prove the value of the multicultural customer by connecting statistics to actionable, brand-specific KPIs.
Arrive with a Plan
Even with relevant statistics, CMOs may still need convincing. Enter the meeting with a detailed plan to be enacted sooner than later. It’s important that the plan be rooted in data and segmented by more than ethnicity; two Mexican shoppers who have been in the country for 11 months versus 11 years will not perceive advertisements the same way. Their deep cultural connections are not the same, thus their buying decisions may differ greatly.
The plan should also be focused on key growth segments, driven by geography, buying patterns, communication preferences and culture. Where is the area that offers the greatest potential growth? It would be a waste of resources to target all Hispanic or Asian customers throughout the US in the same way; their preferences are not the same. It’s good business practice to select a test market in order to ensure that the strategy works on a local level before applying it at a national level. With distinct data-driven KPIs in place, it is possible to connect the implementation plan’s success back to ultimate business results, informing longterm marketing decisions.
Some marketing executives seem to be making the same mistakes over and over, running marketing campaigns that address the entire market as one and ignoring the facts. Airing a few commercials in Spanish does not constitute a marketing plan, nor does developing signage in Mandarin. The multicultural population is growing rapidly and hiring “residential multicultural experts” as needed is not enough for long-term growth. Marketing executives must understand the value of allocating growth resources to multicultural marketing before competitors do so first…no wonder the turnover rate in the CMO suite is so high.