The Wave

Selling Into Diverse Markets

James, an African American sales associate for a financial planning firm, tells a story that is all too common. His company recently hired him as a “diversity candidate” and put him through a generic sales training program.  Then it tossed him into a brand new region with no guidance and few leads under the assumption that he’ll be automatically successful selling to other African Americans.  Now he’s struggling to make his numbers and his boss is threatening to let him go.

There are thousands of James’ working in America’s corporations, all feeling unsupported and under pressure to perform, often in tougher conditions than their white counterparts. It’s a common way of doing business, but it’s counterproductive.

Part of the problem is that too many companies claim they “get it” about diversity without really knowing what it takes to be successful in new and emerging markets.  They look at the raw data and see dollar signs.  And, at first glance, the data does seem very promising: there are more African Americans in the upper and middle classes than ever before and their spending power has increased tenfold in the last twenty-five years. In California whites are no longer the majority, Latinos are. Latino purchasing power in the US increased from $223 billion in 1990 to $490 billion in 1992 and is projected to reach $926.1 billion by 2007.  And Asian-Americans comprise one of the fastest growing consumer blocks on the Pacific rim.

But each of these emerging markets is distinct unto itself, requiring distinct and unique approaches.  The cookie-cutter sales techniques of yesterday simply don’t work anymore.  For example, many immigrant communities tend to be insular, relying more on word of mouth and referrals than on traditional marketing strategies.  In the insurance and financial planning industry African Americans are still smarting from the phony insurance scams and inflated premiums of the 60’s and 70’s.  They’re understandably cautious even when the pitch is coming from another African American.

American companies need to be much more tactical on how they're going after new and emerging markets.  They need to carefully study that market, not just the numbers, but the culture too as Bank of America has done with urban consumers.  They need to start respecting their audience as BET has done recently with African Americans.  They need to suit the marketing message to the target consumer as Subaru has done with the lucrative gay and lesbian community.  They need to utilize young and diverse sales talents to reach into immigrant communities and leverage word of mouth and family connections as Verizon Wireless with Latinos.

Most of all, they need to stop assuming that just because a sales associate is a diversity candidate that they’ll be a success within their own demographic.  When they start doing these things, the James’ of this world, and by extension their employers, will find it much easier selling into diversity markets.

Ramp Up Your Divesity Market Share

Are the traditional markets for your products saturated? It’s very likely they are if you’re in banking, auto sales, financial services or insurance. Research shows that these days you are having a very hard time succeeding in your traditional markets for one reason: they are populated entirely by the “gold customer.”

You know who I’m talking about. The gold customer is a “he,” between the ages of 33 and 55. He’s white, heterosexual, married with kids and is some kind of professional; a doctor, lawyer or senior manager in a big, old, solid company.

But here’s the problem: there aren’t that many of these guys left in the US who don’t already have a raft of bank accounts, fancy cars, a personal finance guru and insurance up the wazoo. This means finding that particular gold customer who isn’t already wedded to one of your competitor’s products has become as hard as the proverbial search for the Holy Grail.

I’ve got some advice for you...stop looking for the gold customer, right now. Ramp up into other, less traditional markets, because you are much more likely to succeed in those. Why?

Who's The Right Sales Person for the Market?

The red-faced sales manager in my diversity management class at Cal State was adamant:  "Do you mean to tell me," he shouted, "that I have to hire a Vietnamese sales guy to sell my products in Westminster (a predominantly Vietnamese area in Los Angeles)?!"

"Not exactly," I replied, doing my best imitation of a rental car commercial.  "What I am saying is that you need to study your market very closely.  Given that particular area of Los Angeles, and the insular nature of the Vietnamese community, it's likely a Vietnamese sales rep might do better."

"Well, that makes sense."  he said, calming down.  "I'm just sick and tired of you diversity experts shoving political correctness down my throat.  You don't know my problems."  I agreed that I didn't know his particular problems, but I added "Diversity is about business, not political correctness.   I don't care if you have a white sales guy, or a black  woman, or a one-legged Eskimo - if they know a lot about that part of LA and the people who live there, they are more likely to have success in it.  If they happen to be Vietnamese, so much the better."

The Diversity Guy