Understanding the cultural background of customers, potential customers, employees, together with the markets from which they are drawn is essential for organisations in today’s multicultural society. For most organisations it is a journey – one step at a time. Here we focus on the longer-term vision of the business benefits to be achieved from using Origins as an analysis and operational tool.
Customer, Prospects, Employees and Markets – In Alignment?
Customers and Prospects
Origins makes it possible to quantify the role of cultural background as a driver of consumer behaviour in your organisation, and to understand purchase behaviour and spending patterns.
A summary of the ways your organisation can benefit include:
- Cultural tagging of customers for
- Profiling – reveals penetration by cultural segment
- Product and value by cultural segment
- Propensity modelling
- Guidance for qualitative research to understand needs and motivations by cultural segment
- Selections by cultural segment
- Campaign response by cultural segment
- Use as an independent variable for propensity models
- Cultural tagging of prospects
- To prioritise those with greatest potential
- Infill of missing gender for culturally-specific names
- Insight about appropriateness of brand representation through imagery, personas/avatars and colours
Understanding the quantitative and qualitative cultural context of behaviour provides clues to why members of cultural groups use or avoid a product or service. The cultural framework within which people operate also determines how they respond to promotions and rewards.
This understanding creates opportunities for greater customer engagement through customised messaging and/or timing that resonates more strongly with the customer. Creating culturally appropriate messages, at the right times will increase effectiveness of marketing communications. Clearly, a ‘one size fits all’ approach is no longer appropriate.
For example, in Chinese culture, red symbolises good fortune and joy, whereas white is the colour of mourning. A company marketing wedding-related goods or services will find that an image of a bride in a red dress would be better received by people of Chinese background than the traditional Anglo-Celtic ‘white’ wedding. Similarly, green is more likely to resonate with people of Islamic background.
A lack of understanding of cultural nuances, behaviours and customs can have costly consequences. Read how Pepsi, Gerber and Nissan got it wrong, with negative outcomes which you can find at our Blog. Conversely read how some of Australia’s leading organisations have used Origins successfully with some outstanding results as seen in our Case Studies.
Most organisations now realise there is a cost to sticking with ‘business-as-usual’. With more than 10 million Australians having been born overseas or with at least one parent born overseas, businesses cannot afford to ignore the diverse cultural communities they represent. Origins is a powerful tool that will give you the insight upon which you can create a strategy.
Employees – A Diverse Workforce is Good for Business
These days, most workplaces are free from cultural bias, discrimination and vilification, and any transgressions are normally called out for retribution. From this important beachhead of preventing the negative, businesses now recognise bottom-line opportunity. There is increasing evidence that there is a direct correlation between an organisation’s cultural diversity and business performance.
Cedric Herring’s survey of American businesses reported in 2009 that, based on his regression analysis, a one unit increase in ‘racial diversity’, resulted in an 8.7 unit increase in sales. He found that racial diversity, along with gender diversity, were among the strongest predictors of sales revenue. See his article here.
Similarly, a McKinsey report published in 2018 and based on data from several countries, found that companies in the top-quartile for ethnic/cultural diversity on executive teams were 33% more likely to have industry-leading profitability.1
In Australia, ground-breaking research by Diversity Council Australia, supported by OriginsInfo, concluded that “Executive and workforce cultural diversity is linked to increased innovation and creativity, market share and sales revenue, brand reputation and differentiation, and improved financial performance.” For more, see OriginsInsight Edition 7.
While none of the authors claim causality, the statistically significant relationships observed between greater diversity, particularly at leadership level, and financial performance, deserves considerable attention. The anecdotal evidence and hypotheses are compelling.
A culturally-diverse and inclusive workforce adds to business assets and appears to stimulate growth and innovation by
- Greater ability to attract high-quality, culturally-diverse talent;
- A wider range of language skills;
- Promotion of inter-cultural understanding;
- Knowledge of practices and protocols in customer cultural segments;
- Intimate knowledge of consumer tastes and preferences;
- Intelligence about overseas markets;
- Strengthened employee engagement
It is also recognised that there is a cost of doing nothing. The McKinsey survey reports that:
“Companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in our data set. In short, not only were they not leading, they were lagging.”
The first step to realising benefits of a culturally-diverse workforce is to measure the current state of cultural diversity. There are several ways to do this – some being more successful and practical than others. Origins offers a low-intrusion, cost-effective way of achieving preliminary insight in organisations with larger workforces. For a comparison of approaches, see ‘How can I Measure Cultural Diversity?’.
Measuring the cultural diversity of customers or employees gives only part of the picture. It is also necessary to compare the employee profile with the profile of the market from which the employees are drawn. Most importantly, the market-view must be compatible with the methodology used for the customer or employee cohort.
It is not appropriate to compare results from a survey with a base derived from census data. The measures, timing and context of the questions are not compatible, and will produce unreliable results.
In other words, both sets of data should be derived from the same methodology. This is the case with Origins. In doing so, businesses will benefit from a more robust analysis from which to draw reliable conclusions and develop strategies. For more information about comparing like-with-like, see our Mapping & Spatial Analysis page.
Alignment of Customers, Employees and Markets
Leading organisations that recognise the cultural diversity dividend, seek to achieve a broad alignment between the cultural diversity of the market, the customer base and employees.
Typically, organisations would evaluate their alignment by measuring the cultural diversity of
- Customers by product; value; channel
- Prospects by website, call centre, branch/POS
- Employees by function/role; tenure; service line
- Relevant labour and consumer markets.
To achieve this, organisations need a measurement tool that uses a consistent methodology across all three. Origins is the ‘common denominator’ metric that will provide that assessment. Contact us to discuss how we can help you emulate world’s best practice.
1 Hunt, V, Prince, S, Dixon-Fyle, S, Yee, L, Delivering Through Diversity, McKinsey & Company, January 2018