mchastek
05-25-2005, 02:55 PM
The following was written by Randi Payton, President and CEO of On Wheels, Inc. I believe this is a very well-written and thought-provoking article. I'd love to hear opinions.
PR, Politics or Profit:
Diversity Must Be More than a Word
By Randi Payton
Call it cultural blindness, but many automakers ignore the Nation’s second largest car market. This market, our nation’s African-American households, have the money and credit to buy new vehicles. They own homes. They need cars. And trucks and SUVs.
How serious is this omission? The average new car costs $28,000, and in a 17-million-unit year, the arithmetic works out to $95 billion in sales to African Americans. That’s billion with a B.
The domestic industry, its advertising agencies, Wall Street auto analysts and the general media have been missing a crucial point for at least 50 years: African Americans are this country’s second largest ethnic market segment, and according to some estimates, they purchase over 20 percent of the new vehicles sold. Yet the industry has not found a way to effectively encourage this market’s interest in its products.
Over 100 years of building a one-culture marketing infrastructure hampers the auto industry’s ability to really understand a multi-cultural market. Knowledge is often lacking and research is sparse.
African Americans also buy millions of used vehicles annually. They buy luxury vehicles at a higher rate than other buyers. They average owning three cars per household. Yet auto companies spend less to reach and nurture this market than they do to target small niches, newer ethnic markets (e.g. Latinos and Asians) or this year’s trendy enthusiasm.
I publish a magazine, African Americans On Wheels, that—obviously—targets African Americans interested in cars and driving. I also publish Latinos On Wheels and Asiansonwheels.com. Let me make plain that, although we make our money from automotive advertising, we do not seek advertisers who throw a few dollars our way out of a sense of obligation or “diversity correctness.”
Here’s why: no advertiser will ever create brand loyalty in the African-American community doing it that way. True business diversity requires understanding and acting on the African-American market’s needs and wants.
Among these wants are culturally specific automotive content that satisfies the community’s information requirements. Of equal importance is community involvement—at both the corporate and dealer level—that addresses their interests. Addressing these communications needs could generate new vehicles sales by changing the average ownership life-cycle from five to every two years.
Research shows that in their hearts, African Americans are loyal to the Big Three, but Detroit has done precious little to capitalize on that devotion. The industry brags about its five-percent minority-supplier goals, a scattering of minority dealers and jobs in its factories.
The industry gives token support to traditional minority organizations, but the amount spent there is nothing compared to the massive amount of money the manufacturers spend in auto racing, mainstream media and events that don’t really interest African Americans.
Any manufacturer who wants ten percent of this $95-billion market will never get it by spending two percent of its marketing budget targeting African Americans.
Every manufacturer has some form of a diversity council. We helped organize some of them. But too often, diversity becomes a bullet point in a presentation and not an effective way to sell new vehicles. Diversity is often departmentalized, and key managers don’t understand what it is or why they need it.
Rarely is a lack of diversity identified as a factor in declining sales or decreasing revenue. Wall Street analysts certainly don’t factor it in, and the trade media almost never suggests a relationship between diversity and sales.
Yet, it’s big news when General Motors loses $1.8 billion in a quarter…the same quarter in which, statistically, African Americans spent more than $21 billion on new vehicles. Did GM get its fair share?
Why isn’t diversity addressed on every level of an automaker’s communications and marketing, including its regions and dealerships? The industry is losing customers at the dealership level, where the Asian manufacturers have a competitive advantage: many of its dealerships are recent, and they actively seek multi-cultural buyers.
A great many dollars are wasted in so-called minority marketing. Most minority agencies, like mainstream agencies, put as much money as possible into broadcast. That generates impressive reach and frequency numbers, but it does not represent true diversity.
A customer needs to touch, feel, and experience a vehicle. A predominately white marketing infrastructure needs to touch, feel, and experience its customers. Is hiring a “minority agency” the answer? The very term seems to limit diversity, if it is not marketing all your products.
The industry has actually embraced “language marketing,” using non-English publications to advertise their products. This sounds fine, but it ignores the established truth that most new vehicle buyers are educated and get their information primarily in English. The ethnic buyer cannot be attracted through language alone. Only through broad cultural understanding.
Customers—any customers—must have a reason to visit a showroom and must believe they will be accorded respect when they arrive. This begins when dealers reach out to the African-American community through media they trust, get involved in their communities, invite them to the dealership and treat them fairly.
The industry must also fill the void of lack of automotive content reaching African Americans, even if it has to finance new media sources. Since the advent of internal combustion vehicles, African Americans have loved cars and even auto racing, a venue in which Detroit spends lavishly but which can hardly be called a hotbed of diversity.
Diversity communication is grossly lacking on dealership level, which is the front line. Few dealers understand their market’s demographics and too many are not involved in the communities they serve.
Meanwhile, I don’t think the news that African Americans are spending $95 billion on new vehicles every year has reached the very top of the industry. If it had, we’d see more effective support and encouragement of those executives in a place to foster genuine diversity.
Randi Payton is the publisher of African Americans On Wheels and CEO of On Wheels, Inc.
PR, Politics or Profit:
Diversity Must Be More than a Word
By Randi Payton
Call it cultural blindness, but many automakers ignore the Nation’s second largest car market. This market, our nation’s African-American households, have the money and credit to buy new vehicles. They own homes. They need cars. And trucks and SUVs.
How serious is this omission? The average new car costs $28,000, and in a 17-million-unit year, the arithmetic works out to $95 billion in sales to African Americans. That’s billion with a B.
The domestic industry, its advertising agencies, Wall Street auto analysts and the general media have been missing a crucial point for at least 50 years: African Americans are this country’s second largest ethnic market segment, and according to some estimates, they purchase over 20 percent of the new vehicles sold. Yet the industry has not found a way to effectively encourage this market’s interest in its products.
Over 100 years of building a one-culture marketing infrastructure hampers the auto industry’s ability to really understand a multi-cultural market. Knowledge is often lacking and research is sparse.
African Americans also buy millions of used vehicles annually. They buy luxury vehicles at a higher rate than other buyers. They average owning three cars per household. Yet auto companies spend less to reach and nurture this market than they do to target small niches, newer ethnic markets (e.g. Latinos and Asians) or this year’s trendy enthusiasm.
I publish a magazine, African Americans On Wheels, that—obviously—targets African Americans interested in cars and driving. I also publish Latinos On Wheels and Asiansonwheels.com. Let me make plain that, although we make our money from automotive advertising, we do not seek advertisers who throw a few dollars our way out of a sense of obligation or “diversity correctness.”
Here’s why: no advertiser will ever create brand loyalty in the African-American community doing it that way. True business diversity requires understanding and acting on the African-American market’s needs and wants.
Among these wants are culturally specific automotive content that satisfies the community’s information requirements. Of equal importance is community involvement—at both the corporate and dealer level—that addresses their interests. Addressing these communications needs could generate new vehicles sales by changing the average ownership life-cycle from five to every two years.
Research shows that in their hearts, African Americans are loyal to the Big Three, but Detroit has done precious little to capitalize on that devotion. The industry brags about its five-percent minority-supplier goals, a scattering of minority dealers and jobs in its factories.
The industry gives token support to traditional minority organizations, but the amount spent there is nothing compared to the massive amount of money the manufacturers spend in auto racing, mainstream media and events that don’t really interest African Americans.
Any manufacturer who wants ten percent of this $95-billion market will never get it by spending two percent of its marketing budget targeting African Americans.
Every manufacturer has some form of a diversity council. We helped organize some of them. But too often, diversity becomes a bullet point in a presentation and not an effective way to sell new vehicles. Diversity is often departmentalized, and key managers don’t understand what it is or why they need it.
Rarely is a lack of diversity identified as a factor in declining sales or decreasing revenue. Wall Street analysts certainly don’t factor it in, and the trade media almost never suggests a relationship between diversity and sales.
Yet, it’s big news when General Motors loses $1.8 billion in a quarter…the same quarter in which, statistically, African Americans spent more than $21 billion on new vehicles. Did GM get its fair share?
Why isn’t diversity addressed on every level of an automaker’s communications and marketing, including its regions and dealerships? The industry is losing customers at the dealership level, where the Asian manufacturers have a competitive advantage: many of its dealerships are recent, and they actively seek multi-cultural buyers.
A great many dollars are wasted in so-called minority marketing. Most minority agencies, like mainstream agencies, put as much money as possible into broadcast. That generates impressive reach and frequency numbers, but it does not represent true diversity.
A customer needs to touch, feel, and experience a vehicle. A predominately white marketing infrastructure needs to touch, feel, and experience its customers. Is hiring a “minority agency” the answer? The very term seems to limit diversity, if it is not marketing all your products.
The industry has actually embraced “language marketing,” using non-English publications to advertise their products. This sounds fine, but it ignores the established truth that most new vehicle buyers are educated and get their information primarily in English. The ethnic buyer cannot be attracted through language alone. Only through broad cultural understanding.
Customers—any customers—must have a reason to visit a showroom and must believe they will be accorded respect when they arrive. This begins when dealers reach out to the African-American community through media they trust, get involved in their communities, invite them to the dealership and treat them fairly.
The industry must also fill the void of lack of automotive content reaching African Americans, even if it has to finance new media sources. Since the advent of internal combustion vehicles, African Americans have loved cars and even auto racing, a venue in which Detroit spends lavishly but which can hardly be called a hotbed of diversity.
Diversity communication is grossly lacking on dealership level, which is the front line. Few dealers understand their market’s demographics and too many are not involved in the communities they serve.
Meanwhile, I don’t think the news that African Americans are spending $95 billion on new vehicles every year has reached the very top of the industry. If it had, we’d see more effective support and encouragement of those executives in a place to foster genuine diversity.
Randi Payton is the publisher of African Americans On Wheels and CEO of On Wheels, Inc.