Welcome to Broker Roundtable, where each week we ask list brokers to give their opinions on issues that matter to the marketing community. This week's question: As the U.S. gets more ethnically diverse, what are some tips to help marketers target various demographic segments?
Our panel includes Don Eaker of Nexxa Group Inc., Jim Hall of All That Marketing, Michael Peterman of Veradata, Lisa Pollack of Adrea Rubin Marketing Inc. and Shawn R. Salta of Directmail.com. Would you like to be considered to be a member of our roundtable? Contact Larry Riggs (email@example.com).
Don Eaker, national director of sales, Nexxa Group Inc.
For segments to be practical, they should have identifiable differences from other segments, unique response patterns, consistency and internal similarity. There are four basic factors for creating segments in a market—geographic, demographic, psychographic and behavioral variables, the latter including buying patterns, price sensitivity, brand preferences, and usage rates.
And certainly, ethnic diversity is growing, but in the current marketplace, cutting costs and improving return on investment is paramount. Segmentation of your prospect/customer universe and sending highly targeted offers unique to a particular segment is key to this issue.
Jim Hall, vice president, All That Marketing:
This depends on your target audience. Certainly, if your offer appeals to an ethnic audience you need to approach this group in the manner that will allow it to understand and reply to your offer. That could be a Spanish language mailing piece or bi-lingual client service representatives. Understanding your customers is key.
Those prospects that most closely mirror your customers will be your best responders. Identifying those segments on a mailing list is a tougher situation. Ethnic segments on lists are often identified by the surname only. This can be dangerous because if the prospect is a second or third generation American, he or she could be offended by being approached as part of an ethnic population. Encouraging referrals by your customers could be a way to increase a prospect list.
Michael Peterman, CEO, VeraData:
There is more to ethnic segmentation than meets the eye. "Hispanic" isn't one segment, nor is "Asian." To segment appropriately and effectively, one must dig a little deeper. Country of origin is an important consideration when segmenting for a direct mail campaign. Sure, one can consider the Spanish language to be mostly the same. One could assume that Mandarin is the common language spoken by Chinese. But is that the most effective way to target our ethnically diverse population? I don't think so. The data is available to target these individuals using the appropriate pop culture references and country specific slang that will resonate and appeal to that individual.
No one likes being bucketed into a broad group. If you send a mail piece with a sombrero to a person from Puerto Rico, it will not have the same effect as it might have on a person from Mexico. Asia has many dialects and many countries, each with their own language, each with their own culture. Beyond this, knowing a person's level of acculturation will help segment the offer or the message more appropriately. A first generation Asian American will have a different set of norms than a third generation Asian American. Speaking to these individuals on a one to one basis will yield materially better results.
Lisa Pollack, senior account executive,| Adrea Rubin Marketing, Inc.:
It is important to pay attention to the data released by the U.S. Census. Although the census data has not yet been incorporated into the large databases, the population shifts have already occurred. So it's crucial to research the population trends and make assumptions based on these findings on buying behavior, ethnic population density and household characteristics to identify new areas of opportunity. The next step is to translate these trends into unique data segments that help marketers reach these growing niches of the population ahead of the competition. Models can also be used to help the marketer adapt as the population shifts ethnically and geographically.
Shawn R. Salta, vice president, DirectMail.com:
According to a 2002 Census Brief, "ethnic" consumers accounted for 30% of all purchasers. Understandably, marketers are attempting to target this large segment by using messaging strategies that resonate with each unique ethnic group. While individuals of Hispanic or Latino heritage account for much of the growth, diversity in the U.S. is far more complex.
Since culture affects individuals' perceptions of advertising messages, understanding the nuances of each culture will greatly improve a marketer's ability to communicate effectively. Likewise, knowing preferred channels for extending messaging offers, as well as the marketing phrases employed, will be critical.
Segmenting offers and accumulating culture-specific data will be an important part of learning how well we currently understand these diverse audiences and how better to reach them in the future. While, it's always been critical to avoid "one size fits all" approaches in direct marketing, diversity is making this a mandate rather than just a sound business practice.