Want To Expand Your Business Beyond Black Consumers? Don’t Forget Loyal Customers

June 28, 2017  |  

Vector pop art illustration of a black woman holds an open laptop in her hands. Pop art advertising poster with a beautiful black woman for promoting a new laptop model

This year the Black American buying power is expected to reach a whopping $1.3 trillion. With a figure like that you may ask yourself, why do most Black-owned companies seek to appeal to a broader base? According to branding and PR expert Karen Taylor Bass, CEO of TaylorMade Media, the answer is pretty simple: “It is the ultimate goal of an entrepreneur to increase their market share.”

“Black companies should absolutely outreach to the general marketplace to grow their business and brands,” she stated. “However, understanding and appreciating their core customer is rule number one.”

Looking beyond a niche market is actually a smart business move, said Jacqueline Rhinehart, founder of Organic Soul Marketing. But expanding to the general market also has to be done in a smart way. “Black-owned and serviced products should include a mainstream campaign when their products organically reach that audience — but never at the expense, literally or figuratively, of their initial core audience. The ‘reach’ should not be manufactured (by altering the brand or the product), or sought in a way that besmirches the original customer base.”

But not all Black companies know how to expand their base without leaving behind or insulting their core customer. This was the unfortunate situation the makers of SheaMoisture found themselves in earlier this year with they launched their “Hair hate” campaign which all Black women hated due to its attempt to equate white women’s hair issues with our own.

It had long been of dream of Sundial, the makers of SheaMoisture and Nubian Heritage, to reach a bigger market. Back in 2015 the CEO of Sundial talked of expansion with MadameNoire. “As a kid growing up, one of the brands I thought was tremendous was Karl Kani…and I don’t see Karl Kani today. I want to see SheaMoisture tomorrow,” declared Richelieu Dennis. “Once a company develops out of its consumer base you will often see a well-funded multinational company come in and take over that space. The Black-owned company either stays a niche company or just disappears. This is something we don’t want to happen…Now with this investment, it allows us to make moves that will keep this company in the family for another four generations and beyond. My goal is to have my children take over and their children and so on.”

Unfortunately, the most recent misstep by Sundial, valued at $700 million with annual revenues of about $200 million, wasn’t their only one. “SheaMoisture began market expansion back in 2015 and this is not the first controversy perpetuated by that decision. In February 2015, they faced a public backlash for featuring a Caucasian baby in its ads. That lesson should have been considered in future marketing strategy,” said Linda F. Williams, COO and founder Whose Apple Dynamic Coaching Services. “The company ignored lessons learned.”

Besides learning from failed promotions, companies should also learn from their core consumer. “No matter who owns a company, if and when they deem it time to broaden their target market, they should listen,” explained Thembisa S. Mshaka, award-winning advertising campaign writer and author of Put Your Dreams First, Handle Your [entertainment] Business. “Listen to their core market or make sure their communication doesn’t convey that they are being abandoned. Listen as they select agencies of record, to make sure they understand the nuances of making the choice to expand before they retain them to create and deliver a campaign.

“This is not ‘a Black thing,’ she added. “This is a business thing. We saw it with SheaMoisture and Pepsi’s Kylie Jenner ad. We saw it with Starbucks when they tried to discuss race with their ‘Race Together’ initiative. It is tone deafness that stems from ignorance, ego, isolated conversations that lack diversity of thought, an inability to listen before taking action, or some combination of all of the above.”

While Williams pointed out “Market expansion is fundamental in order for a company to thrive and remain relevant, she said companies should be more mindful of the old adage, ‘It’s now what you do. It’s how you do it.'”

The key is to be inclusive, Rhinehart added. “A great example of an advertising campaign/product integration activation, is the Carol’s Daughter ‘Mother/Daughter Makeover’ which included white women. Their TV spot included first the Black and POC (people of color) models and ended with one white model.”

There’s also an order companies need to follow when attempting to broaden their base and the first step is making sure their core audience is always remembered, recognized, and involved. “Key stakeholders must always think about the following: what is the brand? who is the target audience? how can we grow the niche and not offend our core consumers? As a Black woman entrepreneur and public relations expert, I am extremely thorough and thoughtful with the language and visuals used to promote a brand/business regardless of color/gender. I always ask for a seat at the table to brainstorm with the marketing team as it relates to the messaging of the product,” Taylor explained. “I over-stand that companies like SheaMoisture want to broaden their base, however, it is imperative that Black and brown marketers are involved in key decision-making as it relates to tier 1 branding, messaging and storytelling. No one understands the sensitivity of hair, skin, history like someone who has lived it first hand. A general market agency dropped the ball on that campaign and alienated the core base of Black women.”

The second step is to remember customers are only as loyal to you as you are to them.“Customer loyalty is an area in which SheaMoisture miserably failed,” noted Williams. “It led to what appears to be a mass exit by their core customers. Market expansion is achievable by developing a well-designed strategy that maintains company loyalty to its customers without appearing to abandon them in the process.”

Third, the expansion market strategy needs to be phased in.”In the case of SheaMoisture, a branding strategy should have been devised to diversify the product line to include products for different hair types. Even among women of color, textures differ. This expansion of the product line would have formed a transitional foundation for the market shift without alienating the customers who contributed to the company’s success,” Williams explained.

The bottom line is when consumers emotionally connect to products and companies, business is no longer just business, it’s personal. And no one likes to pushed aside for someone else.

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