What are the top three things that keep you up at night? In June 2017, Fortune conducted a survey among Fortune 500 CEO’s about what issues they consider to be their main challenges:
As evident from the survey, what stands out to me is the impact of technology and people diversity are two factors that can be controlled internally to some degree.
So, what is your strategy to deal with technology and diversity?
I will focus on diversity today which can easily be fixed for the committed leaders. How often do you think about the demographic shifts in your markets and how these shifts can affect your business in the short and long term?
Have you considered in your marketing plans that every other person in this country is a woman, every third person is multicultural (Asian, Black or Hispanic), and the largest living generation in the U.S. is millennials, taking over for the baby boomers? Most of these millennials are avid technology users and require new rules of engagement both in the workplace as well as the marketplace.
How does this impact your practice, and how are you planning for this, if at all?
Imagine, if you should move to China as the new country head for a new market. Once you settle down, one of your first priorities (if this hasn’t already been planned) should be developing a new business strategy to attract clients from your new market. Instead of using the same strategy you executed in the U.S., you will need to custom tailor a new approach for your new marketplace.
If you don’t have a unique marketing strategy to attract women, the multicultural, and millennial populations in the U.S., then you may be missing out on up to 75% of the total population. What percentage of your clients are women business owners, multicultural professionals or millennial entrepreneurs? If you don’t know the answer, how could you possibly have the most effective business strategy for these potential customers? In order to remain in business for the long term, you must develop and execute a strategy custom tailored for these diverse markets. Most business leaders are so busy running their businesses that they hardly find the time and resources to develop an effective business strategy to adapt to the demographic changes over time.
Let’s assume that you believe in expanding your practice to the growing diverse segments, but you don’t know how to get started. Here are a few steps to help you:
Make a firm commitment with a financial investment and a time devotion. Smart business leaders always own and prioritize critical business objectives. If you don’t see this initiative as among your top three business priorities, then don’t waste your time and money. You must see this as a business initiative essential for sustainable growth. It is always difficult to find space in your budget for a new initiative, but you must look at this as if you are expanding your business to a new underserved market. For example, you had your practice in Chicago for the last 15 years, and now you have an opportunity to open an additional office in Houston. The Houston market is rapidly growing and it looks quite promising for your business. You would consider this a good ROI, even if it takes three years to break even. The diverse markets are similar to this investment example, except that you may not have to wait three years to break even with your expenses. It may happen much sooner than it would if you had spent the time and capital necessary to expand into a new geographical location.
Identify one or two segments as your target markets, e.g. the women’s market and the Asian market. The demographic growth will help you to identify your priority segments. You can decide which markets to target by consulting demographic growth statistics and privately held data in the area you wish to service. Once you have identified your priority segments, you should find subject matter experts who will help you better understand these markets so you can maximize your effectiveness. With the growth of these markets, it is critical that this strategy be developed and executed through experienced segment experts. These are specialty markets that are best dealt with through experts rather than your existing mainstream marketing firm.
With the help of experts in the field, develop both short and long term strategies. Growing through diversity, like any other sustainable initiative requires time to see the results. Expecting immediate results often leads to disappointment and lost opportunity. Identify people in your firm who will champion this initiative and own the execution.
Change has always been a constant factor to take under consideratIon for all businesses. However, most businesses that neglect to keep up with the impact of change will not sustain themselves as a viable business for over the long term. When Amazon opened their doors for business in 1994, they started selling books online. Their main competitors at the time were Borders and Barnes & Noble. Borders reported $3.9 billion in annual revenue and Barnes & Noble’s revenue was $5.4 billion during their best respective years. Today, Borders is out of business and Barnes & Noble is struggling. On the other hand, Amazon last reported annual revenue of $136 billion and Jeff Bezos became the richest person in the world while Amazon stock price is on a seemingly endless climb, regularly posting all-time highs. The main difference between Amazon and its competitors is that most of their competitors are selling products and Amazon is selling customer service.
Amazon is ranked #1 in customer satisfaction in the U.S. The main reason for them being the top choice for consumers is that they understand their customers better than most companies. They have continually changed their strategy to adapt to changing customers. Can you say the same thing about your business? Your customers have changed, but has your strategy adapted to better deal with these changes? Today, the changing new customers are younger multicultural women and men who think differently and should not be taken for granted. They have different rules of engagement and these new customers do not connect with products and services from companies that don’t make strong efforts to earn their business.
Any business that is looking for long-term growth will need out-of-the-box thinking and planning. It is about time that our businesses acquire and retain customers with a unique strategy for our changing customers, who happen to be more multicultural, and made up of more women and millennials. A business with a clear understanding of their changing customers and who has a current marketing plan to earn these customer’s business, will inevitably grow.
The cost of doing this is a lot less than the cost of not doing it!
Tariq Khan, Founder & CEO, Global Diversity Marketing and Adjunct Professor, Marketing, New York University is a leadership coach, recognized business leader and sought-after speaker on changing market trends, customer relationship and diversity/inclusion. Contact him at firstname.lastname@example.org or visit www.gdmus.com