Brand building is a challenging endeavor. Communicating a brand’s features, benefits, and differentiators to enough consumers in a compelling way that drives purchase is complex. And many marketers take some shortcuts to save time and money.
One shortcut is to generalize the target audience and not take race, ethnicity, LGBTQ+ identity, and other inherent differences into account. While shortcuts can be helpful, the benefits of generalizing a target audience may be why a brand’s equity remains stagnant.
Beware of missed opportunities.
Big Village examined brand tracker data among wireless phone service carriers and found that not being inclusive could lose a brand business and market share. Why? Consumers in multicultural groups are slipping through the cracks. Brand tracker results from a recent CARAVAN study show that Black and Hispanic consumers are about one and a half times more likely than the general market (i.e., where the demographic profile of the data matches the U.S. population) to report they intend to switch carriers in the next year. However, their awareness of the brands in the marketplace is lower than the general market. Those most likely to switch are less aware of their options.
About half of the general market is aware of each brand in the category. Among White consumers, awareness increases substantially. On average, 60% of White consumers are aware of brands in the category. When examining multicultural groups, the gap in awareness is meaningful. On average, only 44% of Black consumers are aware of brands in the category. Among Hispanics, these figures are even lower, with 40% average awareness. These awareness gaps drive which brands consumers are considering switching to.
The difference in awareness profoundly impacts a brand’s ability to grow. Looking deeper, we see that, on average, a general market consumer is aware of 6.5 brands in the category. White consumers, on average, are aware of 7.5 brands in the category, meaning their consideration set is more extensive. Black consumers, who are likelier to switch, are aware of only 5.3 brands on average. Hispanics are aware of even fewer brands, 4.8, on average. Carriers are restricting their opportunities when the segments most likely to switch, Blacks and Hispanics, are unaware of their brand.
Evolve your marketing strategies.
A brand’s marketing strategy drives at least some of the underlying causes of these differences. Though we can hypothesize that over-generalizing the market plays some factor. In other words, brands are not taking the necessary steps to reach consumers of different ethnic groups. Even if an advertisement does reach a multicultural consumer, that ad will have most likely been designed to resonate with a general market (i.e., skewing White) consumer, minimizing its impact significantly.
Don’t try to fake it.
Brands should be careful not to over-generalize the market and instead include specific strategies for multicultural groups in marketing plans. However, being mindful of being inclusive in planning is only a first step. We see in prior work Big Village has conducted to uncover the brand messaging characteristics that best resonate with non-White groups that one theme comes up repeatedly: authenticity. In consumers’ minds, ‘authentic’ messages and brand experiences are conceptualized and developed by the multicultural groups they are designed to represent. Multicultural consumers can see and feel when those outside the group create an advertisement or another brand expression. A 2022 study by Nielsen found that despite heavy ad investment in inclusive content, Black consumers can still feel disconnected from brands, and that disconnect is having a devastating effect on consumer sentiment—2022 saw a ten percentage point decline over 2021 in Black viewers who are more likely to buy from brands that advertise with inclusive content. Poor execution leads to adverse outcomes for brands.
Brands that have been successful within multicultural communities have invested in those communities, leveraging support from partners within those communities to activate the brand in authentic, relevant ways. For example, in 2020, Johnson & Johnson partnered with a Black-owned PR agency to launch Our Tone Bandages with shades matching black and brown skin tones. In another example, Dove’s “As Early as Five” campaign focused on race-based hair discrimination and was supported by a Black and women-owned agency.
There are inherent risks to over-generalizing your brand’s audience and insights. However, there are steps you can take to avoid the pitfalls. Examining brand equity metrics by demographic is an important first step, as it can help identify the gaps and set the bar to measure future enhancements. Regarding advertisements and other brand activations, gaining insight and input from people within those communities is important. Conducting insights work among multicultural populations is critical, as is including team members and partners from these communities. Authenticity is vital, which means brands need to leverage the experience and expertise of community members to be effective.
Written by David Albert, General Manager, Insights at Big Village
