Is Diversity in your Target Market?

I ran across a very interesting blog exchange from 1to1 Media’s weblog: Risk in Targeting Minority Customers which was a response to an article in the November/December edition called, Will the Real Customer Please Stand Up? and subsequent article Trend spotting: A Niche Market With Broad Spending Power. It was the latter article that stirred up the proverbial hornet’s nest and it is not my place to comment on that particular exchange but it did stir up other topics I have been involved in.
What I took from the original article, Will the Real Customer Please Stand Up? was the concept of not using demographics alone to determine your target market. Segmentation practices are not that same as it was a few years ago due to the multiple sources and best practices of tracking customer behavior and data.

I will chime in on the question of are there risks in targeting minority customers?, I feel that it is too broad of a generalization to give a definitive answer mainly because minority segments has taken on new definitions and directions depending on how one defines a minority. I will say that it is not a risk when monetary value and potential exist.

What I do know about the minority segment and making the decision to target that market is based off of a couple articles that my business partner Brent Leary and I penned a few years ago addressing the lack of attention from CRM vendors to the minority business community. The two articles, “The State of CRM in the Minority Business Community” and “The New CRM: Community Relationship Management” revealed the business case for actively knowing and targeting this growing market segment. We discussed in our articles how CRM vendors could create brand loyalty by tapping a market that has been overlooked. By understanding the minority community, the channels, publications and alliances that minority businesses frequented CRM vendors could gain entrance along with trust, loyalty which in return would reap an ever growing monetary windfall. What we found in our research in the minority community that they were unaware of the solutions available to them and we also found the unawareness of this potential and market in the CRM vendors we working with. Our actions were geared around bridging that gap which has closed some but still too far apart. I remember reading that minority spending potential could exceed 2 trillion (with a T) dollars throughout 2007 and beyond; in that figure is a growing population of minority businesses that are not being effectively targeted and monetarily leveraged.

I feel a lot of that has to do with how a company approaches diversity as an organization in addition to the practicing diversity strictly through the Human Resource compliance. In addition to just doing the right thing diversity in the workplace has to resonate throughout all departments especially the marketing department in order to leverage the benefits of everyone NOT thinking alike. What I mean by that is if you have a diverse organization that you are willing to leverage in understanding a minority segment that will assist marketing in knowing when, how and where to target their marketing message.
Here is an example I reference frequently when discussing insensitivity and ignorance in a marketing message that probably turned a number of qualified buyers away. For those of you not familiar with the Office Max "Rubberband Man" Commercial a few years ago here is a clip:



I personally found that commercial offensive and I am sure I was not alone; I even bet many may have laughed initially but the stuck in the mail room mentality has never been funny to me. I know that was probably not their intent but perception can create reality. That commercial caused me to not to spend my dollars with Office Max. So, let’s say that Office Max has a diverse organization but if they had sampled the commercial to a diverse group of employees I know there would be someone who would share my feelings and speak out. The question then would be would they listen?

Pepsi had the right idea around 60 years ago when it recognized the potential of targeting the minority community as written about in the book, “The Real Pepsi Challenge”, I have always preferred Pepsi and yes I say that living in Atlanta because I have been drinking it as long as I can remember I am betting on their marketing message reaching my parents. It even taste better to me now after reading about the minority attention and targeting Pepsi undertook many years ago which I bet was a big risk at the time but I bet they will gladly say it was worth it, in a lot of ways.