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Black-owned businesses are the fastest-growing segment among all new businesses, according to the U.S. Census Bureau. The agency also notes that African-Americans run approximately 1.2 million businesses, generating more than $89 billion in revenue. So why aren't companies taking a more aggressive approach to targeting this promising b-to-b demographic?

John Rogers, CEO and founder of Ariel Capital Management, the country's first black-owned asset management company, said despite both personal and companywide success, he still sees race as a challenge in securing business dealings with large companies.

"Often these relationships go back 20 to 30 years or more, and they don't reach out and give minority business a chance … they do things the way that business has always been done," he said.

Shepard Kramer, senior director of member services and head of the Multicultural Marketing Committee of the Association of National Advertisers, said companies must undergo a similar process in reaching black business owners as they would to reach any other demographic.

"It's about identifying what the value of the market is, and how best to reach and go after that market," he said. "You must ask, `Where do those minority business owners live? How do you reach them?' And the answer is you reach them through local cable, you reach them through local newspapers. In terms of the African-American community, if you're talking about female-owned businesses, you reach them through church, you reach them through beauty parlor advertising and marketing."

Mayrah Rocafort-Mercado, VP-marketing and sales-Hispanic market at ADS Direct Media, suggests partnering as one way for b-to-b marketers to take advantage of profitable minority markets, particularly for Hispanic markets.

"Partnering with marketers like the Postal Service and NEBS [a provider of products and services to small and home offices], that have been in that world already, is one option," she said. "Look for like partners who have been in the space. Stay there.

Don't walk in once and walk away. That is something that always happens in this marketplace. You would never do that in the general marketplace. You will reap enormous benefits if you stay there."

Additionally, Kramer said that small companies must make themselves better targets to large companies by investing resources in b-to-b advertising. "From a b-to-b perspective … where most small businesses go wrong is they think of advertising in the b-to-b space as an expense versus an investment and, because of that, they never put the resources behind it that they need to in order to develop a cohesive message that corporate America will recognize and take seriously."

Large companies' investment

While it is important for smaller companies to market themselves to corporate America, large companies must make an active investment in minority communities as well. Most important, companies should be aware of and get involved in African-American and minority-related institutions where they can build relationships with minority entrepreneurs, John Rogers said.

Cargill, a provider of food, agricultural and risk management products and services, understands this concept and makes connections with minority-owned businesses through its supplier diversity initiative. Tim Thomas, director of the initiative, said Cargill works hard to reach out to potential business partners.

Black Enterprise (circ. 513,561), a monthly magazine published by Earl G. Graves, is one venue that Cargill uses to advertise to black business owners. The magazine is geared toward black professionals, business executives and entrepreneurs, and has been a staple in the black community for more than 35 years. Thomas said the company tends to favor publications that highlight special issues on diversity, and the one thing he always asks is "what is the best publication with the biggest circulation that we can target?"

Likewise, Ariel Capital Management looks to target publications with diverse audiences. It advertises in Black Enterprise and sponsors the magazine's entrepreneurship conference, "We try to advertise in magazines where the readership is looking for and needing our services," said Jennifer Berger, VP-marketing communications at Ariel.

"We are working on ads that showcase our diversity. We are looking into trying new things with advertising, but we want to make sure we go about it in the right way," Berger said.

While many companies claim to realize the importance of investing in the minority b-to-b market, few marketers are actually doing so.

There are exceptions, however. Take Verizon, which calls its approach "cultural relevance."

"We believe in the difference between diversity and multiculturalism," said Jeffery McFarland, director of multicultural marketing at Verizon. "Diversity is about placement and representation. Marketers once thought they could reach cultural segments simply through pictures. That's not good enough.

Cultural Awareness

"Multiculturalism is about cultural awareness and being culturally relevant; you need to communicate in culturally relevant ways," McFarland added. "The way you talk to the mainstream may not be the same way you should approach theAfrican-American community."

Verizon's 2005 "Realize" b-to-b campaign successfully used cultural insight to reach its target audience. The campaign was geared toward capturing the entrepreneurial spirit of African-Americans, since research showed blacks are twice as likely as whites to start a business, McFarland said.

Verizon worked with Burrell Communications, a black-owned advertising agency, to create a culturally relevant campaign grounded in solid market research. "Burrell has been our agency of choice for over 10 years," McFarland said. "They know and understand [the African-American segment of] our business very well if not better than we do."

Burrell's expertise with the African-American demographic has been a key factor in its ability to launch successful campaigns such as "Realize."

"We can help companies look at business problems and solve them," said Joy Allen, account director at Burrell. "We understand how to communicate to African-Americans."

McFarland said he understands that in the world of marketing and advertising, all ads are not created equal. "It's not just about seeing people that look like you," he said.

Steven Rogers, professor of entrepreneurship at Northwestern University's Kellogg School of Management, agreed. "I loathe looking at magazines like Ebony, Essence—any African-American magazine or any Latina magazine—and you don't have any people of color in the advertisements," he said. "But at the same time, I don't believe that simply putting a person of color in an advertisement shows the commitment of the organization to diversity. In addition to that advertising, companies should be expected to have very strong diversity programs that include buying from minority suppliers."

Companies' commitment to diversity should be evident throughout their organizations, not just the marketing department, Rogers said.

Ariel's John Rogers agreed. "Baseball was a better sport once everyone was allowed to play," he said. "That is what the Reverend Jesse Jackson often says. Once you included Jackie Robinson, and Hank Aaron [and] Ernie Banks, it was a better sport. Let's translate this to the business world."

Additional reporting by Senior Reporter Carol Krol

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