In the 10 years that she's been with U.S. Structures/Archadeck, Vicki Kiger can't recall a single customer requesting a Spanish-language brochure. The Richmond, Va.–based franchiser is like many contractors who don't see a need to aim their marketing or advertising specifically toward particular ethnic or racial groups, even as these groups, including Hispanics and Asians, are now among the country's fastest-growing populations and most active home buyers.
“We don't care what race they are,” says Kiger, who is Archadeck's marketing manager, “as long as the home and neighborhood fit the profile that Archadeck is going after.” The average national cost of its decks is $14,000, and prices go as high as $25,000 in affluent states such as Connecticut. “If you own a $100,000 house, you're not going to put on a $14,000 deck,” Kiger says.
Growing Numbers The question, however, is whether contractors are leaving business on the table by not marketing more aggressively to minorities, especially in light of the current demographic trends that are transforming communities around the country. U.S. Census Bureau data show that Hispanics are the nation's fastest-growing ethnic group and represent the largest minority. There are an estimated 42 million Hispanics in the U.S., or approximately one in every eight residents; by 2008, one in every five will be Hispanic. The buying power of Hispanics today stands at more than $800 billion and could rise to more than $1 trillion by 2008, according to statistics recently quoted in The Washington Post.
Census data also show that about half of all Hispanics, and three-fifths of all Asian-Americans, own their homes. A July 2004 study conducted by Fannie Mae and the Tomas Rivera Policy Institute at the University of Southern California estimates that the Hispanic community will account for 31% of the nation's housing growth between 2000 and 2010. “Thinking of Hispanics as newly arrived immigrants is just plain wrong,” said James Starks, vice president of the research group Diversity Insights, Synovate, in a speech he delivered during the Home Improvement Research Institute's spring conference in Philadelphia in April. “This is a growing trend in homeownership.”
Path to Take As imposing as those numbers are, however, they have not translated into extra business for some companies that have flirted with marketing to minorities. These companies report mixed results. For instance, the ads that Garden State Brickface, Windows, and Siding ran on Spanish-language cable TV “didn't get a good response,” admits Joe Hely, director of marketing for the Roselle, N.J., contractor. More recently, the company included a dedicated toll-free number for Hispanic prospects in its print ads and marriage mailings. But Hely suspects such efforts may be beside the point. “In New Jersey, most people are so assimilated that language hasn't been much of a barrier to sale.” He adds that Garden State's marketing is more effective when geared toward a neighborhood's other demographics, such as the income levels of its residents or the age of its homes.
Most contractors apparently share that mindset and haven't found their lack of minority-slanted marketing to be detrimental to their growth. “We're getting a good cross section of customers,” says John Friemark, marketing manager for America's Best Home Remodelers in Golden, Colo., a company that doesn't tailor its marketing to any particular group. In fact, business is so strong for contractors around the country that minority marketing becomes a zero-sum game that many companies feel would not generate appreciably more leads.
“I don't see it happening,” says Phil Rea, the Virginia–based home-improvement consultant and columnist. Rea acknowledges that a huge portion of homes sold through 2010 — by one estimate, 60% — is projected to be purchased by minorities. “But,” he continues, “there's so much business out there right now, it's not worth the time or effort” to tailor a marketing campaign around any one minority group.
Code Words Work Michael Lee, president of Dublin, Calif.–based EthnoConnect, which specializes in multicultural sales consulting, thinks replacement contractors are making a big mistake when they don't customize their marketing for specific buyer groups. “You can't treat everyone equally, nor do you want to,” Lee says. “It's the antithesis of customer service, which is treating people the way they want to be treated. The same is true in marketing.” Lee also points out that many minorities enter the housing market buying starter homes. “These groups need contractors more than anyone,” he says, “and even if they wanted to deal only with minority-owned home improvement companies, there aren't enough of them [only about 5% of the total, Lee estimates] to meet demand.”
Lee offers some insights into how minorities respond to marketing. For example, he says many Hispanics respond to direct mail “because they get less of it, so they open every piece.” African-Americans, on the other hand, often pick up on ads they hear on the radio. Lee says contractors would be wise to include certain words in their ads that racial groups can relate to. For instance, black customers can associate with products that are described as special, unique, or different “because that's what many of them want to be.” For Asians, words that connote family, community, and time-saving ring true. And for Hispanics, family and fun are alluring topics.
One thing that Lee and contractors can agree on is that minorities are like other customers who are looking for a company that is patient and trustworthy. That trust, he says, is engendered “by going out and being part of the community by supporting festivals, churches, and social events. These customers want to know you're not just there to take their money; and if you can win them over, you'll have a customer for life.”