Framing the Opportunity

Whether you are talking to clients or trying to build internal consensus for a multicultural marketing campaign, it's important to frame the opportunity in a crystal clear way. I believe the mixing of diversity objectives with measurable ROI metrics is less than clear, and may sometimes act as an unnecessary crutch in marketing efforts.

Let me back up a bit and note that I also believe diversity is good for business. If we want to compete effectively as a nation, we need to tap into the diversity of our communities, suppliers, and employee base. But, let's not confuse the merits of diversity with the topic of framing opportunities in multicultural marketing.

One example of a cloudy picture is something I call the Diversity Budget Paradox. When marketers tap into the diversity budget, they sometimes limit the pool of funds available for a business objective. Those diversity funds can be tempting, as many organizations have this budgeted on an annual basis. However, the funds available may not come anywhere close to what is necessary to fully exploit an opportunity. Could Procter & Gamble set goals for number one or two market share across hundreds of products if it relied on a pool of funds that were no more than a couple percent of the company's total budget?

In my other life, I work with institutional private equity investors who are searching for investments in the "underserved markets." These funds are professionally managed and get allocations of capital from banks, insurance companies, and pension funds. A handful of the funds, Fulcrum Capital, Nogales Investors, Palladium Equity, and RC Fontis comprise over $1 billion in capital raised. While fund managers will often discuss the social good of investing in underserved markets, the bottom line is that they have to report on performance in an industry standard manner, known as internal rate of return or IRR. Their investors simply won't give them the benefit of a social crutch and wisely see the IRR potential as attractive in a large and growing market.

I'd like to see more multicultural marketing specialists follow that example. In fact, clients in the mainstream ad market are demanding more and more metrics, and agencies are responding in droves. I'm hearing more about this in multicultural marketing, too. Ultimately, this will serve to weed out the marginal players and will improve the art and science of marketing.

Watch this trend. As you prepare for your next big meeting, see if you can stand confidently without the diversity crutch. I'd be willing to bet that you will find at least one opportunity to run, rather than walk with crutches in the next year.