If you’re part of a franchise, the franchisor prob- ably provided you with a template for operating your business. Unfortunately, although these business templates are usually comprehen- sive enough for running an efficient business, they almost never address how to be sensitive to people from diverse cultures. You want to customize your operations to meet the special needs of the customers in your area.
It’s not good enough for grocery stores, for example, to have a Hispanic or Asian foods section. If this were sufficient, you wouldn’t see so many ethnic grocery stores springing up in many parts of the country. For instance, Arizona has more than 60 Food City stores that cater
specifically to ethnic markets. These stores not only provide the foods specific groups want, but they also make an effort to hire employees who reflect their target customers, assure that their store layouts are comfortable for them, and aim promotions and sponsored events toward multicultural consumers.
The cookie-cutter approach to running a suc- cessful business in the United States is becom- ing less and less effective, particularly as the marketplace becomes more diverse. Do your research and customize your sales, marketing, and product line to appeal to the unique needs of your customers.
Many ethnic communities are attracted to fresh produce. In areas with large numbers of Caribbean Island residents, you’ll find breadfruits, plantains, cherimoyas, and mangos. In areas with many Chinese families, you’ll commonly see bok choy or Chinese cabbage.
Unlike many Caucasians, Latinos love to go grocery shopping. They spend twice the time per visit (on average) as non-Hispanic consumers.
The same is true of Asians. A smart grocer knows this is an opportunity to sell more than just food items to these customers. In many ethnic gro- cery stores, you’ll find clothing, jewelry, over-the-counter medications, and other nonfood-related items.
More and more Caucasians are starting to shop at ethnic stores. If you’re a retailer who’s not offering multicultural merchandise, you could be missing out on a golden opportunity to expand sales into both mar- kets. Americans of all ethnic backgrounds are becoming more sophisti- cated in their tastes and are increasingly using international ingredients in their dishes and other products in their homes.
Banks and insurance companies are beginning to tailor their products to meet the unique demands of specific ethnicities.
Studies show that the most popular color for cars in Japan and Mexico is white. In China, buyers tend to prefer black or silver. In South Korea and Brazil, the most popular color for cars is silver. In addition, many Asians tend to feel that an automatic transmission is essential but air conditioning is a frill. Car dealers may want to consider these and other facts when stocking their inventory.
Hospitals are teaching their nurses and doctors new methods for provid- ing culturally competent healthcare.
Any salesperson and company can increase sales to multicultural customers by figuring out their preferences and accommodating them. Start collecting data about the preferences of multicultural customers in your industry and market, as we explain earlier in this chapter, and then make the adjustments necessary to appeal to your clientele. See Chapter 7 for more details on adapt- ing your product or service for diverse clientele.
Realizing the Edge You Have over Ethnic Stores and Salespeople
When you start seeing ethnic stores popping up all over the landscape, it’s tempting to throw in the towel. After all, how can you possibly compete with businesses designed from the ground up to cater to the needs of ethnic consumers?
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For the reasons we provide in the following sections, this type of defeatist thinking is wrongheaded. You can never assume that an ethnic customer prefers shopping at an ethnic business or buying from an ethnic salesperson.
In fact, people from many cultures actually prefer dealing with someone who doesn’t share their cultural background.
Wide selection and fair prices trump ethnicity
The main reason that people patronize ethnic businesses is not because
“one of their own” runs the business or works there. Multicultural customers patronize these businesses primarily for two reasons:
Selection: The business offers the products and services the person wants or needs. Whether it’s a video rental or grocery store, these spe- cialty shops cater to what their customers want.
Price: Products and services are offered at a competitive price — not necessarily a low price, but competitive in relation to how accessible the product or service is. If you want a loaf of Jamaican Easter bread, for example, you can expect to pay more than $12 a loaf!
Ambience also plays a role in where customers shop. Many ethnic stores have a small-market feel, because that’s what customers are used to back home.
Check out Chapter 7 for tips on how to give your store or office a friendly feel.
Customers’ craving for a wide selection is almost universal, and it gives you a potential edge over small ethnic stores that often offer a limited selection of goods. According to Hispanic American Central, for example, 84 percent of Hispanic women prefer to buy their groceries from traditional supermarket chains. Another survey of customers who regularly shop for ethnic food indi- cated that approximately three quarters of those who purchased produce shopped at more than one store for their ethnic produce because of limited selection.
Many other establishments are known to cater to different ethnicities, including Russian bakeries, French laundries, kosher meat stores, and other businesses that make a good living in the specialty markets. If these businesses can survive and thrive, what specialty items could you sell to attract a wider clientele?
As a merchant who caters to a wider market than ethnic stores do, you may even be able to purchase in bulk and offer your products at more competitive prices. Sometimes simply offering everything your customers need in a single location makes you more competitive in terms of price. If your customers have to travel to three stores to do their weekly shopping, they’re wasting a
Ethnic people don’t always prefer ethnic businesses
Assuming that people of a certain ethnicity prefer ethnic stores is like assum- ing that all Czech or Slovak people love to listen to polka music. The fact is that ethnic businesses may have several things working against them:
Limited selection, as discussed in the preceding section
Poor location — out of the way or maybe not in the best part of town
Limited parking
Ethnic business owners who may be more likely to leak information about a customer’s buying habits to the community
Your store or office can often be more competitive than a comparable ethnic store in convenience, selection, price, and service. How? Here are a few ideas:
Ethnic stores tend to be rather small operations and not very Internet savvy. To gain a competitive edge, develop a Web site where custom- ers can get the most out of their shopping experience online or off. See Chapter 5 for details.
Consider rewarding your customers for their loyalty. Offering discounts on large purchases or bonus bucks that customers can use toward pur- chases is often enough to show your appreciation. If several of your cus- tomers have young children, sponsoring a fair or a day at a local park or amusement park can be a real perk, in addition to making your clients feel like they’re part of the family.
Finding a new customer costs almost three times as much as keeping an existing customer. Repeat customers also tend to buy twice as much as new customers, because after they have bought from you, the barriers to purchasing (fear and mistrust) have been lowered. In addition, repeat customers often lead to referral customers.
How often have you received a birthday card from a salesperson or store? Southwest Airlines does this without fail. What would this kind of gesture say about you?
Many ethnic people shop at establishments and buy from salespeople who support their community. If you donate to local charities, let your customers know by posting the charity’s fliers in your windows or plac- ing “Proud sponsor of . . .” at the bottom of your local newspaper ads.
Chapter 5 has details on how to make a name for your business in your community.
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Ethnic customers may steer clear of ethnic salespeople
Salespeople often falsely assume that ethnic customers have a strong prefer- ence for working with salespeople from their own culture. Chinese prefer to buy from Chinese, Polish prefer to buy from Polish, and so on. Evidence proves that this isn’t so. The truth is that unless a tremendous language bar- rier exists, many customers don’t care about the cultural background of their salesperson. What they want is a salesperson who’s sensitive to their culture.
Of course, as we explain in Chapter 16, having a staff member on hand from the culture you’re trying to serve can’t hurt; it also can help make everyone in your business a little more culturally competent and your customers a little more comfortable.
In fact, some customers may deliberately look for a salesperson who isn’t from their culture. They may be concerned that if they’re negotiating with someone from their own culture, that person may know all of their bargaining tricks and techniques, so they may not get the best deal. Many conclude that negotiating with someone who is more naïve is the best way to get a good deal.
Another common trait of some ethnic groups (Asians and Hispanics, for example) is that they tend to be very private about their financial affairs. A common belief in these cultures is that if you share personal financial infor- mation with people from your own culture, they may disclose it to others in their community.
If an ethnic customer approaches you, don’t automatically assume that he would prefer a salesperson of his same ethnicity. Unless he seems extremely uncomfortable with you or his own ability to speak English, treat him like any other customer, but always be on the lookout for signs that his culture may influence the transaction. If you treat your customers with sensitivity to their culture, they’ll be happy to buy from you, regardless of your ethnic back- ground. Part III gives you a crash course on the cross-cultural sales process.
Watching Your Competitors:
Are They Adapting?
Part of your role as a salesperson or business owner is to constantly keep an eye on what the competition is up to. (Ideally, you want to be keeping an eye on them in your rearview mirror.) What products are they carrying? What
services are they offering? What is their pricing structure? In the new global economy, you must also know if and how they’re adapting to multicultural influences in your marketplace.
In the following sections, we reveal effective strategies for using what you discover from the competition to improve your appeal to the multicultural clientele in your area.
Businesses similar to yours may not be your only competition. Anyone who competes for the same consumer dollars that you do is your competition.
Video games, movies, television, live theater, sporting events, musical concerts, and amusement parks, for example, all vie for the money people spend on leisure activities. At first glance, they may not seem related, but a closer look shows they obviously are. Keep this in mind when doing your competitive analysis.
Using competitive intelligence (and avoiding industrial espionage)
The mere mention of competitive analysis conjures up images of corporate spies stealing insider information, but competitive intelligence or analysis differs from industrial espionage:
Competitive intelligence is a legitimate way to gather publicly acces- sible information (from Web sites, corporate publications, patent fil- ings, annual reports, advertisements, press releases, and onsite store visits) to determine another company’s strengths and weaknesses and see what it’s planning. Large companies often have entire departments devoted to gathering information about competitors. You can certainly do the same on a smaller scale.
Industrial espionage can involve electronic surveillance, theft of trade secrets, bribery, blackmail, and other unlawful activities.
Before becoming an industry supersleuth, familiarize yourself with the Economic Espionage Act (www.economicespionage.com/EEA.html) that governs the legalities of gathering competitive intelligence.
Businesses and organizations are becoming increasingly transparent as they attempt to conform to disclosure laws and regulations, and market them- selves and their products and services on the Web (via Web sites and blogs).
Some companies even allow their employees to launch their own blogs to broadcast to the world what the company is doing now and planning for the future.
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You can gather an incredible amount of useful competitive intelligence simply by knowing where to look:
Businesses or stores: Visit your competitors’ businesses and act like a customer to see what ethnic products and services they may offer, their prices, the amount of ethnic traffic they receive, and other pertinent issues.
Web sites and blogs: Most businesses and many salespeople have their own Web site or blog and often post annual reports, press releases, and advertisements. They may also offer an area where customers can post comments about the level of service received as well as reviews of the company’s products.
Google and other Internet search tools: You can search for new devel- opments in your industry, price ranges for products you sell, which products and services your competitors offer, and more. Look for industry-specific directories, databases, archives, and search engines, which you can use to conduct research on companies, industries, and business publications.
Commercial research reports: You can purchase market research that provides economic and competitive analysis, but always check first to see if comparable information is already available for free on the Internet. You just need to be willing to invest the time required to search for it.
Frontline staff: Receptionists, cashiers, and other personnel who work directly with customers can be a tremendous source of information.
Clients and vendors don’t feel intimidated by receptionists and often share information with them that they would never think of sharing with a salesperson or manager. Clear the route for your frontline staff to deliver to you any information they pick up. Tell your staff the kind of information you want, such as complaints, compliments, questions, concerns, and requests for products or services you don’t currently offer. Some companies have a monthly contest for the best piece of data provided by staff with a nice prize as a reward.
Some savvy businesses deliberately keep clients and vendors waiting for 10 to 15 minutes in the reception area just to increase the chances the receptionist may overhear valuable conversations.
All staff: Enlist the assistance of everyone in your organization.
Encourage them to share any competitor ads, fliers, or other marketing materials they come across. If they have friends or family who shop at stores that are similar to yours, ask them to complete a short question- naire about why they choose one establishment over another, what products they buy, and so on.
Key individuals: Develop relationships with key people who can help you, including community or religious leaders, top people in your local chamber of commerce, major suppliers, multicultural marketing experts, diversity consultants, journalists, and even well-connected customers.
Building relationships with experts can keep you ahead of opportuni- ties that may be developing for your business. Again, if they are a part of your advisory board (see the earlier section “Enlisting current clients to help you gain a competitive edge” for details), you already have this relationship.
Don’t fall victim to paralysis by analysis. Instead of spending all of your time gathering and analyzing your competitive intelligence, spend some time plan- ning and then executing your plan to make your business more competitive. In Chapters 6 and 7, we show you how to build a strong foundation.
Staying a step ahead of the competition
Chess masters are superior players because they don’t simply think about their next move. They think about their opponent’s next five moves and their own next five or ten moves for gaining a strategic edge. In the same way, you must outthink your competitors. Put yourself in their shoes and ask: How are they going to adapt? What are they likely to do to gain market share?
Most companies start with baby steps. They may modify their marketing materials, add a couple of products or services, or devote a section to their stores that caters specifically to a certain ethnicity. These small changes usually fall short and can even drive prospective customers away; customers may view these changes as token gestures rather than a true commitment to them. This is why a supermarket’s ethnic foods section has little impact on deterring large ethnic food stores from successfully entering the same marketplace.
To assist you in predicting what your competitors may attempt in an effort to outdo you, consider the following factors that customers often deem most important:
Price
Selection
Brand names in stock
Delivery times
Installation services
Warranty (including period and what’s covered)
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Language capabilities of staff
Credit terms available
Return policy
Location (convenience, parking, and multiple locations)
Appropriate atmosphere
Hours of operation
Knowledgeable and experienced staff
Personalized services
Customer education
To stay several steps ahead of the competition, focus on as many items in this list as possible. If your competitors are focusing only on price and selec- tion, while you are focusing on price, selection, hours of operation, attractive return policies, and personalized services, you are going to win.
Competing on price alone is a loser’s strategy that requires no talent, skill, or planning. In fact, customers are often willing to pay a premium for conve- nience and quality customer service. You may want to use a few popular prod- ucts and services as loss leaders in a strategy to up-sell other products, but if your entire business becomes a loss leader, you’ll soon go out of business or be so disappointed that you’ll wish you were out of business. One of the most effective ways to beat your competition is by adjusting your sales presenta- tions, as we outline in Chapter 11.
Competing with ethnic businesses
The overall strategy for competing successfully with ethnic businesses is no different than the strategy for competing with nonethnic businesses: offer cus- tomers more of what they want and need. Following are some ideas on how to implement this strategy to compete specifically with ethnic businesses:
Increase your selection. Ethnic stores usually do a great job offering specialty products, but ethnic customers often prefer one-stop shop- ping. Immigrants, in particular, are very time conscious because they work long hours, so they appreciate having all of their needs met at a single location.
Offer convenient hours. You may need to stay open on nights and week- ends when ethnic customers have time to shop. Your research can help you determine your potential customers’ normal work hours so you can plan to be open when they’re available to buy.