If The U.S. Economy Is So Good, Why Are Sales Down?

“A rising tide raises all ships.” We’ve all heard that expression and many companies are hoping it’s true as the U.S. economy experiences the lowest unemployment rate and the longest period of growth in U.S. history. Under such circumstances, we could reasonably expect all our ships to be riding high, right? Not quite. In fact, many companies are struggling and wondering why they’re not experiencing the growth they believe they should be. As a consumer insights company that works across multiple verticals and consumer segments, we have a good vantage point from which to observe the rise and fall of the tides and the individual ships trying to stay afloat. Take a closer look and ask yourself these questions:

Are you targeting the right consumers?

Consumer-facing companies often come to us when they’re trying to expand their consumer base. They need to grow to stay viable and multicultural Americans are the only demographic groups growing in the U.S.:

Consumer targeting, of course, involves more than a focus on ethnicity. Most consumer-facing companies, however, cannot ignore the U.S. multicultural market. According to the Selig Center of Economic Growth, the buying power of multicultural consumers equals 4 trillion dollars annually and growing at a faster rate than non-Hispanic Whites. P&G’s Chief Brand Officer, Marc Pritchard, is quoted as saying, “If you are not doing multicultural marketing, particularly in a place like America, you’re not doing marketing.”

Is your research accurate?

Research reports are double-edged swords. They have the power to influence marketer’s decision-making but are often misinterpreted and/or misrepresented. Before looking at the results of a research study, it’s imperative to understand exactly whose opinions are being captured. Changes in technology and consumer behavior have made creating representative samples for consumer and political research more difficult than it was ten years ago. We’ve seen lots of surveys of U.S. Hispanics and Asians which only include responses from English speakers even though a third or more of those groups do not speak, let alone read English proficiently. Poorly designed questionnaires can also be insensitive to cultural differences. This can lead to overly positive results or miss important differences. Asking the right questions about research design and populations sampled can mitigate costly mistakes.

Is your messaging effective?

If your research and the economic data indicate that multicultural consumers are a good fit for your company, the next step is to determine how to market to them. Here’s where things get interesting. We’ve all heard horror stories of companies spending money to target multicultural consumers only to alienate them with culturally insensitive messaging. Most errors occur when companies try to take shortcuts by translating existing messaging into other languages or adding images of brown-skinned people without changing the context of the messaging. During California’s recent drought, the State wanted residents to stop watering their lawns and used an image of a brown lawn in ads with the title “Brown is the new Green.” That, of course, is a play on “the new Black.” That same message was translated into Spanish and made about as much sense as “Purple is the new Yellow” since “the new Black” is not a commonly referenced term in Spanish. Effective multicultural messaging is not something that can be produced with Google Translate.

Do you have diverse decision makers?

Deciding to pursue a multicultural strategy and being able to do so are not one and the same. Creating messages that resonate with multicultural consumers requires a deep understanding of culture, history and values. Unfortunately, people working in corporate America bear little resemblance to the consumer market. This creates a problem when no one in the room can understand how the imagery or messaging might “feel” to a multicultural consumer. According to the McKinsey Diversity Database, this lack of corporate diversity has been shown to stunt corporate earnings by as much as 35%.

Adding culturally diverse team members to marketing departments is a great start but making sure those members have their opinions heard and are given the authority to follow through on them are the engines that bring about growth.

Conclusion

Whether or not your sales are currently growing, including multicultural consumers in your marketing strategy is one way of future-proofing your business. Non-Hispanic whites are still 60% of the population and economically powerful, but they have a mean age of 43.5 years, the lowest fertility rates in the country and slowest economic growth. The median age for U.S. multicultural consumers is 31 with U.S. Hispanics at 28. Younger consumers are more likely to start families and make all the purchases that entails. Being literate in how to communicate with this growing consumer segment will ensure the rising economic tide lifts your boat and helps you navigate it towards the future.

Is your company or brand looking to expand its consumer base and connect with multicultural audiences?
Contact us today and let our expert research team help you get the insights you need to grow your business in a diversifying world.