Open New Doors
May 5, 2015
Ways to reach multicultural B-to-B segments
By Philip Polk
For many advertisers, an oft-overlooked component of B-to-B marketing is the multicultural segment. What these advertisers may not fully comprehend is that over the past 12 years, minority-owned businesses have fueled virtually all the entrepreneurial growth in the U.S.
The number of Hispanic-owned businesses, for example, was projected to grow to more than 3.22 million in 2014, an increase of 43 percent since 2007, according to the business intelligence firm Geoscape. That’s double the growth rate for all U.S. firms. Hispanic businesses now represent the largest, and fastest growing, multicultural B-to-B segment, generating nearly $500 billion in revenue.
While some marketers and agencies may believe that marketing to a multicultural B-to-B audience is a difficult proposition, and that the level of benefit is not worth the investment, businesses have found success with the right product offering, agency partner, and strategy in place.
Case in Point
One example of a business that has successfully leveraged B-to-B opportunities within the Hispanic market is NAPA Auto Parts, a leading aftermarket automotive parts and accessories company that derives 60 percent of its revenues from wholesale customers. These customers service cars and trucks, as well as maintain vehicle fleets for businesses.
In 2004, NAPA realized it was slowly losing market share to more aggressive retailers like Autozone, O’Reilly, and Advance Auto Parts in high Hispanic population markets such as Los Angeles, Miami, Phoenix, Dallas, Houston, and Chicago. Working with PM3, an Atlanta-based, full-service advertising agency, NAPA learned that Hispanics in these key markets were over-represented in the automotive service trades. Research also revealed that Hispanic customers tended to be younger, less price sensitive, and more brand loyal.
NAPA has traditionally used sports properties as a platform for B-to-B marketing, leveraging hospitality assets to reward and entertain wholesale customers. However, these properties have usually been associated with motorsports, such as stock car racing (NASCAR) and drag racing (NHRA). To reach Hispanics, NAPA knew it needed to shift gears.
So in 2005, on the recommendation of PM3, NAPA became a sponsor of the Mexican National Soccer Team’s U.S. tour. The sponsorship allowed NAPA’s salesforce to reward existing Hispanic B-to-B customers and engage new ones in key high-density Hispanic markets across the U.S., where matches were played.
Two years later, as a way to expand into new markets, NAPA became a sponsor of Major League Soccer (MLS). The sponsorship program included sales promotions in game markets, meet-and-greets with current players and legends, pre-match on-field experiences, and autographed merchandise awarded as sales incentives or as raffle prizes at hospitality events. Additionally, special events were organized at NAPA stores throughout the U.S. The events attracted B-to-B customers through special promotions, premium giveaways, and appearances by soccer legends and brand ambassadors.
In markets that did not host MLS games, PM3 developed point-of-sales materials, placed print ads in the Spanish language trade publication, Servicio Automotriz, and ran radio flights concentrated on sports and news tied to the MLS matches.
In a period of five years, after initiating these high-level sports marketing properties, NAPA rose from seventh to third in the consideration set among Hispanic B-to-B customers. The programs also drove organic growth and new account acquisitions, although increases varied across markets.
Tips to Consider
Businesses looking to reach lucrative, largely untapped multicultural B-to-B segments should consider these tips:
- Quantify the size of the opportunity, which will allow you to prioritize organizational resources when hard budget choices have to be made.
- As with any marketing strategy, do your research to determine the size of the target segment, the most effective marketing tactics, and how best to convert prospects to customers. This is not the job of the sales team.
- Ensure you have a solid understanding of the target multicultural segment. For example, if you’re targeting Hispanics, reach out to a subject matter expert (either internal or external). Simply “being Latino” is not a sufficient qualifier to expertly assess the quality and holistic readiness of a business/marketing plan or approach.
- Identify a strong agency partner to aid in the effort. The role of the agency is to “translate” your company’s strategy into effective, actionable tactics that are relevant to your B-to-B segment.
- Gain internal stakeholder alignment on the business case for a multicultural-focused B-to-B strategy. One person or group will have a difficult time driving a strategy that requires contributions from sales, advertising, research, finance, and other departments.
- Ensure the customer experience is consistent from marketing to sale, particularly if the target B-to-B segment speaks a foreign language. If you choose to market to customers in-language, be prepared to service them that way too. Use of a third party translator in sales discussions is not recommended.
- Join your local Hispanic, African-American, or Asian-American Chamber of Commerce.
- Attend local Small Business Association networking events. These forums, while grassroots-oriented, provide a casual environment for engaging potential prospects and integrating them into your social circles.
- Monitor the performance of your marketing efforts by tracking all relevant and impactful metrics by ethnicity.
Philip Polk is executive vice president and general manager of PM3. He can be reached at firstname.lastname@example.org.
"Open New Doors." Philip Polk, Executive Vice President and General Manager of PM3. BMA Buzz. 5/5/15.
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