1.8 MILLION PEOPLE, 200,000 MILLIONAIRES, A MEDIAN income of $60,000 as against the national average of $38,885 equates to a brilliant opportunity in the cutthroat world of competitive marketing. Despite Indian Americans’ surging growth in all fronts, companies showed a marked unwillingness to lay out the marketing bucks targeting the Indian American community to hardsell their products and services. Those that did target them, like money transfer giant Western Union ended up with an unbeatable lead in the market.

Merrill Lynch estimated the size of the Indian entrepreneur market in Silicon Valley alone to comprise 200,000 people, with wealth worth $60 billion. And untold billions in disposable income. The company estimates that Indian Americans comprised 10% of the U.S. wealth market. They account for over a third of global Non Resident Indian (NRI) wealth. The findings kickstarted the financial services giant into instituting a separate division-the Multicultural and Diversified Business Division (MDBD)-under its Global Private Client Group, to target this market. Since inception of the new division, the company has gone on an overdrive to lure Indian clients. Their major focus-those with investible assets of $250,000 to $500,000.

At the retail level, the firm mobilized its sales force of financial advisors and provided them with special training to handle the niche market. The company threw itself into sponsoring community events and partnering with professional associations. The strategy has served them well so far. Subha Barry, first corporate vice president and head of the MDBD at Merrill Lynch claims the unit turned profitable in its first year of operations. Though unwilling to divulge exact figures, Barry claims that the division has indeed contributed substantial new wealth management business.

Infact, Merrill's South Asia Strategy has become a blueprint for their foray into the other ethnic markets. “The South Asian effort had taught us a thing or two about these multicultural markets and how exactly to serve their needs, so the subsequent programs were made that much more easier,” says Barry.

Stay Ahead or Play Catch up
Merrill’s foray into this niche marketing segment was also provoked by competition. Over a decade earlier, the Metropolitan Life Insurance Company (MetLife) had seen the folly of not targeting niche segments such as Indian Americans when they were at the forefront of the technology boom. The company invested in a community program that saw it fostering talent in the Indian American community. Over the years, the company saw major growth in this sector. Now the company, which has over $300 billion in assets under management, claims it has the largest South Asian sales force that help it garner more South Asian business.

Merrill, in turn, is substantially increasing its South Asian sales force and equipping others to deal with the concerns faced by the community in the U.S. Both companies have very similar focus. Knowing that education is a big priority for Indian Americans, Metlife launched an essay contest that awarded a scholarship of $250,000 to the winner. Merrill touts its 529 college savings plan as a major draw to their services.

Pointing out the need for their services in the Asian American community, Barry says only 24% of Asian Americans in the category have a financial plan, while 52% use a financial advisor. “Education and saving for future education needs, for the next generation, continues to be a high priority,” she says.

Customer-Centricity
Arguably, what Merrill did last year was nothing new. Service providers like Sprint and AT&T had been using the tactic years before with much success. However, these instances were few and far between, in the absence of hard data that actually indicated the wideness of this market. Most companies thought Indians—typically well-educated—were reachable through mainstream media vehicles. Moreover, the market was not thought of as big enough to warrant a concerted niche marketing effort. But the last five years have seen growing momentum for such ethnically focused marketing efforts.

Says Srikumar S. Rao, professor of marketing at New York's Long Island University, “Whenever you are marketing any product or service, the key is to identify a niche market and make a special effort to reach that niche market. Then you will have much greater effect in that your response will typically be four times better than if you are using normal advertising.”

With the burgeoning Indian American population and an increasing level of economic security, American companies are finding it increasingly hard to turn a blind eye towards the Indian American community. And when they do look, what they see is the beautiful sight of greenbacks pouring in.