Using Cultural Coding to Unlock Growth in CALD Audiences

Something ignored in understanding consumer behavior in Western Cultures is the role of cultural background.

There are reasons for this. At times, in the past data on ethnicity being kept undisclosed because of the potential for misuse (I have lived experience of this) but more systematically at issue is that thought leadership on consumer behavior has been dominated by the western perspective.

There is an anecdote that I love which is the observation that if Maslow was from a Collectivist culture rather and Individualist culture, the top of the pyramid would not be Self actualization, but social harmony!

Think about this for a moment. Are the frameworks we use to interpret data and behavior based on the assumption that people will think and act in western ways? I think the answer is yes!

It’s at this point that I would highlight that in Australia, fifty one (51%) of the population are from Culturally & Linguistically Diverse (CALD) Backgrounds.

When you look at the way large brands go-to-market, often times campaigns have a CALD bolt on with perhaps a media buy designed to get to CALD communities but the premise of the campaign and communications are still based on the western ways of thinking.

The consumer benefit of most campaign message hierarchies in Australia implicitly assumes individualist values. This underlying campaign premise or proposition is sliced, diced and contorted in many ways for digital and offline channels.

Most CALD marketing involves only language translation of the messages which highlights the way CALD audiences are treated as adjunct rather than mainstream.

The other CALD adjunct forms of marketing include small activations. There is often a string of cultural activations such as Chinese New Year and Dwali to celebrate cultural events which are ideal “add-on” marketing activity.

To be genuinely customer centric and move toward personalization, should we not begin with understanding these genuine audience differences?

Understanding Cultural Differences

How do we understand cultural differences?

Geert Hofstede¹ established the foundations of cultural intelligence literature when he designated 6 cultural dimensions describing differences in cultures. They include:

1- Power distance	The degree to which people in a culture in a society expect to be equal.
2- Individualism vs Collectivism	The degree to which a culture builds their identity on individual characteristics versus that of their or a group.
3- Masculine vs Feminine	The degree to which cultures favour traits such as assertiveness, power and success vs nurturing, caring for others and quality of life.
4- Uncertainty avoidance	The degree of tolerance of ambiguity and uncertainty vs more rules, regulations, and norms
5- Long-term vs Short-term orientation	The degree to which there is tolerance to wait/defer gratification and rewards. Note that this is multi-dimensional
6- Indulgence vs restraint	The degree to which gratification and indulgence of needs are satisfied versus regulated through social norms

Academics have since expanded the list, but this original 6 is more than enough to demonstrate the point.

When cultures are clustered based on similarities on these various dimensions, a smaller number of groups with more distinct values and behaviors appear. There are very distinctive differences between Anglo Celtic cultures (Australia, North America and British), versus East Asian (Chinese, Japanese & Korean) vs South American.

This framework has been used for many years in international relations and organizational behavior domains. It has had little or no application in consumer behavior.

The Value at Stake in Understanding Cultural Differences

Having worked at the coalface of understanding consumer behavior for the last 25 years, I see how these cultural dimensions play a role in determining consumer behavior. With that comes growth opportunity. Indeed, globally there is growing realization of this.

Marc Pritchard, Proctor & Gamble’s CMO presented to the AANA Annual Diversity & Multicultural Marketing Conference in Las Vegas last year about how they are applying this cultural lens to their go-to-market process. That is their mainstream marketing process, not as an adjunct. They have done the numbers and understand they are under-penetrated by ~20-30% in specific cultural groups vs Anglo-Celtic people. They see it as a recipe for growth. He calls it “leveling up”.

This underlies an important point. When people migrate to new countries, they do not assimilate straight away, there are degrees of assimilation and various cultural values and behaviors can take a generation to disappear. Indeed, in the world view of immigration, this simple model of absolute assimilation to the new culture was abandoned long ago (based on data) in favor of more nuanced and pluralist models of acculturation and multiculturalism.

How Cultural Differences Break Through to Consumer Behavior in Australia

To illustrate how these cultural dimensions “break-through” to relevance in consumer behavior in a Western country like Australia, I will talk about some consumer behaviors in personal finance.

1. Long after migrants come to Australia, people from Collectivist cultures send money back to their families in other countries. This “Remittance” behavior accounts for large flows of money out of Australia and tends to be less present in migrants from individualist cultures. This is the difference between “Caring for oneself” (Individualist) versus “caring for family” (Collectivist). Indeed, behaviors in relation to payments are heavily influenced by kin relationship dynamics in different directions across various cultures.
   Indeed, such was the need to cater for remittance that the Australian Government sponsored an initiative to provide a “finder site” https://sendmoneypacific.org/ that allows migrants to understand the latest rates and fees by international remittance companies to enable seasonal workers to lower the cost of remitting money home. Governments only step in to do things like this when the free market does not provide adequate services in this space.
2. A second observation is that financial independence is desired faster by younger people (and their parents!) in Western cultures whereas in other cultures the notion of complete financial independence is not necessarily achieved so young because financial relationships exist in a network of kin relationships.
   I have spent many years working to a mental model of life stage financial behavior that while it definitely describes overall behavior “in general”, it conforms to heavily to the Ango-Celtic (Western view) of the world and does not entertain these more diverse behaviors as they exist in the wild.
3. A third observation, and relates to many other categories, is that if you are a large brand, you likely can only get genuine net grow (more customers as opposed to margin) by targeting people who are “new-to-market”, not just people switching. This means that new migrants are a critical acquisition segment for any company. Often brands lose as many customers or close to it in switching as they gain, so a flow of net new to market customers is critical to deliver growth. This means that by definition new to country migrants are critical in any growth strategy.

I am not suggesting here that these cultural differences explain all consumer behavior, far from it. I suggest that cultural background is a missing link in understanding consumer behavior, and we need to start measuring and understanding these cultural factors if we wish to be more customer centric.

I believe in this so much that I am working with a company called Cultural Pulse that specializes in codifying Cultural backgrounds. They have an algorithm that parses first & second name to determine cultural heritage. Every culture has a unique pattern encoded in names like a fingerprint.

This technology (Ask Genie) was used to great effect in the recent FIFA Women’s World Cup tournament in Australia. It’s no surprise that Aussie’s flocked to see our national team play, the results that overwhelmed FIFA was the crowds at the away games, that is, games that did not involve Australia or NZ playing. The technology was used to market to those groups with great success². Bear in mind FIFA run such tournaments for a living.

Reg Raghavan is the visionary leader who built this technology. He is a Cultural Anthropologist with a tech background and has done some critical work in the Government & private sector on a range of systemically important topics for CALD communities.

This technology makes it easy to enhance first party data to seed cultural background into a customer analytical layer of any company. Additional data such as where a person lives is a great proxy for their degree of alteration into the country.

To be clear though, given Australia has 51% of the population from CALD backgrounds, this way of looking at the world should mainstream, primary, and not seen as adjunct to access diverse communities. Marc Pritchard has the right idea.

Go Reg!

References

1. Hofstede, Cultures and Organizations.

2. https://www.smh.com.au/sport/soccer/where-did-all-these-fans-come-from-inside-the-world-cup-s-multicultural-strategy-20230806-p5duai.html