Multicultural Americans are one of the fastest-growing consumer groups in the United States, accounting for more than 120 million people combined and more than 40 percent of the Millennial generation. With a combined buying power estimated at more than $3.4 trillion dollars, multicultural consumers are an exponentially growing marketplace that no smart business should ignore. For small businesses, targeting products to these tech-savvy consumers is a great way to increase business — and the bottom line. But that's not always easy.

Multi-billion dollar companies like Coca-Cola and Western Union are getting it right, targeting campaigns to different multicultural consumer segments, including African-Americans, Hispanic-Americans and Asian-Americans, rather than just producing generic sales and marketing campaigns aimed at all consumers.

Tips for Marketing to Multicultural Consumers

For small businesses with smaller budgets, finding the right way to reach this this increasingly influential group of potential consumers can be complex - and it's easy to misstep and fall into stereotypes that could backfire and offend your potential customers. Using good advertising strategies to reach out to multicultural consumers is vital - especially if you are tapping into a younger market who could become loyal customers for years to come.

Use Consumer Research to Avoid Cultural Stereotypes

Creating ads that pander to cultural stereotypes can offend your potential customers and hurt your business. This is especially important when marketing to "ambicultural" Millennials, whose diverse backgrounds may encompass more than one culture, according to Nielsen data from 2017.

"Any business large or small should avoid the stereotypes that suggest only one type of consumer is good for this product or that," warned Karen A. Clark, multicultural market strategy manager at City National Bank. "A business will limit its opportunity to grow if it assumes any stereotypes about any consumers."

Strategies such as employing focus groups and other types of multicultural research are a great way to get to know your intended audience.

"My advice is to do real-world market research on your customer and client base in order to get a clear and accurate idea of what your clients' or customers' demands and needs are - and whether they correlate with their cultural identities or not," said Nate Masterson, marketing manager for Maple Holistics, a beauty products company. For example, data from research companies like Nielsen, the Pew Research Center and Simmons can give your company enormous insight into multicultural consumers.

"Data often helps to debunk a lot of myths and you may find that the trends you're expecting are either not true or are related to something else entirely," said Masterson.

You also want to be mindful when you interact with your local clientele - who will make their needs known to you through their patronage of your business. "Remember, whoever comes in your door, that's your best customer," said Sherman Ray, owner of Avery's Coffee Roasters and the founder of the Las Vegas Black Business Directory.

Network With Multicultural Business Owners

When it comes to marketing to multicultural consumers, there are advantages to reaching out to small businesses owned or operated by people of color.

"We found that holding networking events for other black business owners was a great way to get affiliate marketing for our own small business and help out other businesses as well," said Ray.

Making connections with multicultural-owned businesses is a strategy that works well on the hyper-local level and requires little financial investment, giving it an excellent return.

But remember, a business with multicultural owners shouldn't assume that they will be patronized by multicultural consumers. "That business has to work to insure that they are relevant to multicultural consumers and understand what is important to that consumer," said Clark.

Hire Multicultural Employees or Consultants

Diversity in the workplace leads to greater innovation, creativity, decision making and problem solving. To reach multicultural consumers, you may want to think about diversifying your marketing team.

"For example, if you are looking to target the Latino consumer, make sure you have Spanish speakers as well as Latino employees on your team," recommended Stephanie Caudle, owner and founder of Black Girl Group, a freelance platform that connects African-American women to companies seeking to market and advertise to African-American consumers. "Your company should be a reflection of the audience you are trying to reach," Caudle said

The key to putting together a diversified marketing team is assembling a group that will benefit your business by helping you navigate cultural nuances and language differences. But it's important not to hire a diverse team just for the sake of checking off a box, cautioned Clark.

"Hiring diverse employees to understand a particular market is smart. And even if a small business does not have the capacity to hire more employees, there are tons of resources available to understand how to market to a particular segment," said Clark.

Resources like Black Girl Group give companies the opportunity to bring diversity to their marketing plans, even when they aren't able to hire a full staff of diverse employees.

Communicate with Multicultural Consumers in Ways that Resonate

Because the majority of multicultural consumers are Millennials, they are more apt to use social media to find businesses to support. This is good news for small businesses because social media, unlike many other advertising channels, is a low-cost way to reach potential customers.

"Multicultural consumers over-index on social media, so digital advertising is king. Print and television can be good, but much pricier, and you have to be very targeted to reach your audiences," said Clark.

According to Nielsen demographic data, multicultural consumers tend to use their smartphones and other technologies much more than other consumers, making online channels a good bet to get their attention. Also, social media is more interactive and can feel more personalized to meet consumers' needs.

"During the first five years of our business, we relied heavily on social media to get the word out about our small business and found that it was more effective than handing out fliers or using radio ads," said Ray.

Multicultural consumers are a growing demographic whose guaranteed buying power can help your business grow. Reaching these consumers can also help your company be more inclusive. That's why it's important to include multicultural marketing strategies in your business plan to engender interest and loyalty in your products and set your business up for success.