Now let me throw a wrench into this conundrum. How are marketers ensuring they can address these issues successfully among all their potential targets in today’s America? By “today’s” America I mean that American consumers are increasingly diverse. In many parts of the country, racial and ethnic diversity is the norm rather than the exception. In fact, census projections indicate that by the year 2020, about half of Gen Z, Gen Y and Gen X will be multicultural and future growth of Gen Z and Gen Y segments will come primarily from Multicultural markets.
In my recent book The $3.5 Trillion Advantage – A Marketer’s Guide to Growing Revenue in Today’s America, I talk about the importance of evaluating and expanding companies’ strategies to new cultural markets right here in the United States. Notice I said expanding—not creating new and separate strategies. Being successful in today’s America does not require new strategies. It does require optimizing implementation of those strategies, so your products and services are more relevant and more relatable to new cultures. However, expanding a strategy and implementing relevantly requires internal capabilities and competencies at a high level; cultural and emotional intelligence are requirements. Cultural intelligence is what will enable marketers to walk in the shoes of new cultural markets and be capable of knowing how to optimize implementation for greater relevance and relatability.
To be effective, optimization should begin with insights gathering insights and continue through planning, implementation, and measurement. It requires revisiting processes, functions, and operations. Needless to say, optimization work doesn’t just include marketing; it includes every area of the organization—back end and front end—involved in implementing and deploying a program.
The good news is that most of today’s influential CMOs already drive change across those areas of the organization required to bring new initiatives to market. Now the idea is to do so with a broader view and understanding of the consumer target.
More good news: Organizing to gain a position of advantage in a new consumer market is a crucial and recognized path to continued growth and value building. In fact, the market rewards competitive advantages in new markets with higher PE ratios based on expected future performance.
Marketers must be ready to look at this opportunity through a different lens. I like to use my ten point Profit Lens™ Checklist to help my clients gain clarity of what needs to be considered and employed as they move in this direction:
1. Strategic Clarity
Align with your company’s business goals and strategic focus. The goal in expanding a strategy to a new cultural market is to benefit from a new revenue stream. The premise is that a company’s current strategy, capabilities, and assets have proven successful and can be leveraged further to enter a new cultural market in much the same manner as existing markets.
2. C-Suite Clarity
The C-suite must drive strategy expansion efforts. The C-suite has the informed and broader outlook for expansion goals and understands how to allocate budgets commensurately to the task. They do not expect immediate ROI from new or recent market entries.
3. Organizational Clarity
Organizing across the organization to expand a strategy to new cultural markets is best achieved by leaders with entrepreneurial management styles skilled at business building rather than those focused on protecting the core consumer. Revenue growth is the goal, but the mentality and skills are somewhat different.
4. Value Clarity
Do the homework to identify your high-value cultural markets. Define their worth to revenue and market share growth in the short and long term. Get to know them—intimately— so you can implement with relevance and relatability.
5. Target Clarity
Focus on new cultural markets whose needs, tastes, and wants align with the core products and services offered by your company. The goal at least at first should be growing market share, not building category.
6. Decision Clarity
Gather insights, plan, implement, and measure with conviction, in real time and in alignment with the rest of the implementation process. Planning and implementing after thoughts, one-off initiatives or intermittent projects is incongruous with expanding a strategy into a new cultural market. Terminology such as initiative and project imply a beginning and an end. Expansion work has no end; to drive growth, is must have continuity and be positioned so its sustainable.
7. Integration Clarity
Expanding a strategy into a new consumer market requires the entire organization, not just the marketing team. The same organization and operational areas required to implement any of the company’s key strategies are also required to implement against the new cultural markets in an integrated manner.
8. Optimization Clarity
Clearly define necessary optimization work and those responsible across areas in the organization that are required to ensure a seamless customer journey along all touchpoints.
9. Metrics Clarity
While business goals will be the same for core and expansion markets, they require a focus on different metrics. For new market entries, set milestones for topline revenue and market-share increases as well as net present value. Profit, return on invested capital, and cash flow are not relevant until the strategy is well established—one to three years out on average.
10. Accountability Clarity
The framework must be clear. The goals must be clear. The targets must be clear and well understood. The optimization work must be clear. And the rewards and consequences for performance must be clear.
CMOs are planning and implementing strong brand-buidling work, which is yielding great results. I propose we pause to ask if the work is being optimized to its full potential by ensuring that implementation is more productive and more engaging for a broader group of consumers. The difference will be seen in the top line.
Terry Soto is one of the country’s foremost experts on top line growth in new cultural markets and has advised a myriad of Fortune 500 executives in the U.S. and Internationally on how to accelerate growth and gain competitive advantage in multicultural markets. Soto’s newest book, The 3.5 Trillion Advantage – A Marketer’s Guide to Revenue Growth In Today’s America shows executives in charge of topline growth how to “quick start” or “step up” success in the most economically viable consumer market of the 21st century. Soto is also a member of the Forbes Business Council and is a regular contributor on Forbes.com and Forbes’ expert panels.