In the marketing field, the debate continues as to which is better, a well-aimed shot with a 22-caliber rifle or a broad spray of buckshot from a shotgun. This article focuses on taking the middle ground: Targeting all of your products to significantly large but defined market-ethnic minorities.
Niche marketing. Target marketing. Guerilla marketing. The names might change, but such narrowly focused marketing generally aims for a definite market with a definite product -- for instance, an Electrical Contractors program designed for marketing to electrical contractors. An insurer might choose to define its market by affluence, age, or other factors. All it needs is to call a list company or database-management firm to get the names, addresses, and phone numbers it needs.
All too often, minorities are forgotten or ignored in marketing campaigns. As with the stereotypical notion of alcoholics as bums who live under bridges, many of our preconceptions about ethnic groups are misbegotten, and might be costing us serious profits. The reality is that most minorities today are made up of hard-working, industrious individuals with a need for insurance and the means to purchase it.
An Illustration
My next-door neighbors are a good example. Fleeing from Iran for their lives, this husband, wife, and two children arrived safely in the United States and prepared to begin anew. Under the Shah's regime, he had been a colonel serving as the equivalent of a mayor for a large city. She was an educated housewife. After the Shah's overthrow, they became literally penniless. He began driving a taxi, since he couldn't find executive-level employment. She took computer training for database entry. Today, he owns a dry cleaner in an upscale suburb of Los Angeles and she works as a middle-level manager for a major credit card-processing company. One daughter is married and has moved out of state, and the other lives at home and works in the loan department of a bank.
From an insurance perspective, this family now owns the dry cleaning establishment, a new suburban home, the condominium in which they used to live (now rented with a positive cash flow), three nearly-new vehicles, and two dogs. It's not hard to imagine the insurance they need to purchase every year.
Today we're finding examples like this throughout North America. Budding minority entrepreneurs are opening small businesses, while education is opening corporate doors for many second- and third-generation minorities. In other cases, many foreign nationals sent here on corporate assignments for multinational firms are choosing to stay, and many wealthy citizens from Asia are migrating here and purchasing homes and businesses with hard cash. Despite all this, most agents' tunnel vision ignores minorities, often precluding any marketing efforts to gain their business.
One Business Tackles The Market
A friend of mine is the second-generation owner of a Chevrolet dealership. He watched his sales plummet as the demographics of his community became predominantly Asian. He had failed to learn the negotiation and buying habits of this minority, let alone figure out how to reach them with advertising. Daily he watched his white sales staff idle away the hours without a single customer. When an entire family (we're talking three generations) would arrive, usually with a translator, the sales staff would seldom close a sale. They did not know how to handle a group negotiation.
Finally, before either selling the dealership or going bankrupt, he hired a new general manager who was experienced in trading in the Asian community. The new GM (who, by the way, was not Asian) began a multifaceted campaign that started with an analysis of the community. It turned out that there were about five or six dialects in the local Asian community. Moreover, about 25% of the population was Hispanic. Advertising in the major papers was canceled; ads now run in about a dozen small, local papers written in specific languages. A new sales staff was hired, with language skills being one of the major job requirements.
Now, each of the major Asian languages (or dialects) is covered among the sales personnel, and four speak Spanish; everyone must also speak English. Traditional closing offices have been torn down to create an open atmosphere in the showroom. The desks remaining have plenty of extra seating available, and three picnic tables have been installed for dealing with the larger family groups. No physical changes were implemented in the service or parts departments, but new personnel were hired to bridge the major language gaps. The sales staff helps out when some of the less-used dialects surface.
The dealership has regained profitability, and the owner can concentrate on factory relations because he is less involved with day-to-day operations. Solutions are still being sought for problems in factory-mailed satisfaction surveys (most are tossed out by uncomprehending customers) and ongoing written correspondence with the customer base. Most communications are performed by telephone, using sales personnel.
Steps To Take
If the area of your agency or brokerage includes ethnic minority populations, you might want to consider what has been done in corporate advertising. From virtually ignoring minority marketing in 1980, most major corporations today have gone to some type of marketing aimed at ethnic groups.
The following basic guidelines should help you with ethnic marketing:
1. Check the most recent census for your geographical area and determine its ethnic mix. Prosperity among these groups has been increasing dramatically. Blacks earn twice the gross national product of Mexico, nearly $262 billion (more than $8,700 for every man, woman, and child) and Hispanics earn $172 billion (nearly $7,800 per person). Asians, meanwhile, have an average family income higher than that of whites (European-Americans).
2. After determining the major ethnic categories within your area, look at the mixes within each category. Don't make the mistake of lumping all blacks or all Asians together into a single group. Haitian arrivals to America have little in common with American-born blacks, and major differences also exist within the Asian community.
3. Prioritize the ethnic minority you wish to target. This can be by population ranking, income levels, home ownership, educational level, or business ownership.
4. Hire (or retain as a consultant) someone who can speak the language and remember, sometimes you have to be aware of the dialect situation. For instance, a salesperson who speaks Chinese might not be enough; a Shew Chou dialect will be impossible for a Cantonese speaker to understand.
5. Create ethnic-specific advertising. Whether you are using direct mail, online media, print, or telephone, your message should address the culture of the particular group you are trying to reach.
6. Investigate the potential media. Many of us are unaware of the various publications and media catering to local communities. Search them out, and discuss your plans and needs with their representatives. Such conversations can open up a wealth of new ideas for you to contemplate, and most of these venues provide free translation services.
7. Involve your new customers. As you add ethnic clients to your book of business, invite them to suggest ways that you can improve your outreach to their communities.
8. Become involved in the ethnic communities you are targeting. Look into community clubs, charities, children's sport teams, holidays, festivals, and church advertisements. Most communities place a high value on word-of-mouth endorsements. Basically, they like doing business with someone they know and trust.
9. Conduct ethnic sensitivity training for your employees. The most effective ethnic marketing campaign in the world can be sabotaged by unthinking comments from your employees. If you're adding ethnic employees to your staff, such training becomes even more important. Check with leaders within the communities for available resources.
10. Give it time. As with any advertising program, persistence pays off. In ethnic marketing, you're the new kid on the block, and potential customers need time to get to know and trust you.
Everyone in the insurance industry knows the importance of retention for long-term growth and profit. And most analysts agree that the minority consumer tends to be far more loyal than the traditional market. A minority campaign might lead to majority profits for you!