Multicultural Special Report: Shore Up Your Back-end
How to build lasting relationships with Hispanic consumers
May 2006 By Gustavo A. Gruber
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More than 20 years ago, only a small group of very progressive companies and nonprofit organizations used direct mail to penetrate the Hispanic market. Most of these “pioneer” companies naively allocated the majority of their resources to the front-end processes of market identification, list selection, copy and creative, and print production, and paid little attention to back-end operations.
Today, although more companies are targeting the Hispanic market, many still do not have the necessary back-end infrastructure. Back-end operations designed to address the needs of Hispanic customers are key to developing lasting relationships in this market.
Understand the Differences Within the Market
To build strong relationships with Hispanic customers, you first need to understand what makes them different from one another. This information then can be used to develop unique segments and communication strategies with messages and offers that are relevant to each segment—and ideally to each individual.
One of the biggest challenges in understanding the Hispanic market is the terms we use to define it. In the United States, we use the words “Hispanic” or “Latino” to define a large and complex group of people with multiple nationalities. They also are used to define individuals who have arrived in this country at different times, and for different reasons, creating a wide spectrum of individuals with many different needs. These terms create the fictitious idea that all members of this market are the same, and as such, many marketers are inclined to develop “one-size-fits-all-Hispanics” communication strategies. This approach is not effective. Communication strategies must take into consideration customers’ language preferences as well as acculturation levels.
A well-designed bilingual acquisition direct mail package gives consumers the opportunity to indicate their language of choice. This easily can be achieved with a language-preference check box in the reply device. More elaborate bilingual formats that clearly separate the two languages will have a reply device for each language. The company then can safely assume that the consumer’s language of choice is represented by the form he or she used to respond. This is powerful information, because you now have reliable data telling you how recipients want to receive future communications from you.
Another key piece of marketing intelligence is a prospect’s or customer’s level of acculturation. This information is important because an offer addressed to a person who is highly acculturated must be quite different from one addressing a person who is less acculturated. For example, a financial institution offering a credit card to the Hispanic community will be more effective if it develops at least two versions: One version that highlights no annual fees and low interest rates can be used to target more acculturated Hispanics, while another version that focuses on credit education and the benefits of using credit wisely can be sent to less acculturated prospects.
Address Back-end Challenges
The single most important element responsible for the long-term success of companies in the Hispanic market is the commitment of the CEO and other high-level executives. This support is critical to the success of ongoing direct marketing programs because in addition to building relationships with customers, marketing personnel need to work with many different departments to properly upsell, cross-sell and renew Hispanic customers. Some of the processes and procedures that need to be worked out include:
• The training of data entry personnel and modifications to database fields. Many of the mistakes made addressing customers in follow-up communications begin in the data entry process. Hispanic names can be confusing, and data entry personnel must be able to clearly differentiate between first and last names. For example, María de Jesús is a first name, but it may be misconstrued as a first and last name. In addition, María de Jesús may have a last name formed by her father’s last name, Fernández, followed by her mother’s maiden name, García. So, her full name could be María de Jesús Fernández García. Although many Hispanics now use a single first and last name, not all do. Data entry personnel should clearly understand the differences.
Having the right structure of database fields also is important. Data entry personnel may understand how to properly break down a traditional Hispanic name, but the database structure must accommodate the correct number of fields. This particularly is important if you plan to develop personalized direct marketing efforts.
• Setting up bilingual, inbound telemarketing. If you ask Hispanic customers to call your organization, tell them what number to call for a specific language. It can be frustrating for customers who expect to talk to a service rep in Spanish to find only English, or be put on hold until a Spanish-speaking service rep is available. Also, plan for longer telemarketing service calls. You need 25 percent more words in Spanish to say the same thing in English. The relationship-building factor also is important to Hispanics. They need to feel comfortable and build trust with the person on the other end of the phone.
• Accommodating longer pay cycles. Many Hispanics have solid incomes and good credit history. However, some Hispanics originate from countries where credit is not available, or is tracked differently than in the States. Therefore, the importance of making payments on or before the due date may need to be addressed. In addition, Hispanics tend to pay with cash rather than credit cards, so they may need extra time to secure full cash payments or money orders.
• Designing Spanish or bilingual billings. Many Hispanic households are multigenerational. Therefore, the person ordering the product may prefer Spanish, but the one paying for it may be more fluent in English. A bilingual billing format solves this problem. A challenge with bilingual payment requests is limited space. Generally payment stubs are small, so use space wisely. The larger, dominant font should be used for the primary language and a smaller font for the secondary language.
• Adjusting metrics accordingly. If you compare the initial ROI numbers for acquiring and servicing Hispanic customers with their non-Hispanic counterparts, the results are not favorable. You have to spend more to implement the processes discussed to effectively market to the Hispanic market. However, once acquired, Hispanic customers often stay with you longer than their non-Hispanic brethren.
Be patient and persistent. Success in the Hispanic market does not happen overnight. Mistakes might be made, but if you’re tenacious and committed to developing winning Hispanic marketing programs, you will achieve success. ¡Buena suerte!
Gustavo A. Grüber is the business development manager for emerging markets at Banta Direct Marketing Group, a printing and supply-chain management provider based in Oak Brook, Ill. He can be reached via e-mail at ggruber@banta.com.
Today, although more companies are targeting the Hispanic market, many still do not have the necessary back-end infrastructure. Back-end operations designed to address the needs of Hispanic customers are key to developing lasting relationships in this market.
Understand the Differences Within the Market
To build strong relationships with Hispanic customers, you first need to understand what makes them different from one another. This information then can be used to develop unique segments and communication strategies with messages and offers that are relevant to each segment—and ideally to each individual.
One of the biggest challenges in understanding the Hispanic market is the terms we use to define it. In the United States, we use the words “Hispanic” or “Latino” to define a large and complex group of people with multiple nationalities. They also are used to define individuals who have arrived in this country at different times, and for different reasons, creating a wide spectrum of individuals with many different needs. These terms create the fictitious idea that all members of this market are the same, and as such, many marketers are inclined to develop “one-size-fits-all-Hispanics” communication strategies. This approach is not effective. Communication strategies must take into consideration customers’ language preferences as well as acculturation levels.
A well-designed bilingual acquisition direct mail package gives consumers the opportunity to indicate their language of choice. This easily can be achieved with a language-preference check box in the reply device. More elaborate bilingual formats that clearly separate the two languages will have a reply device for each language. The company then can safely assume that the consumer’s language of choice is represented by the form he or she used to respond. This is powerful information, because you now have reliable data telling you how recipients want to receive future communications from you.
Another key piece of marketing intelligence is a prospect’s or customer’s level of acculturation. This information is important because an offer addressed to a person who is highly acculturated must be quite different from one addressing a person who is less acculturated. For example, a financial institution offering a credit card to the Hispanic community will be more effective if it develops at least two versions: One version that highlights no annual fees and low interest rates can be used to target more acculturated Hispanics, while another version that focuses on credit education and the benefits of using credit wisely can be sent to less acculturated prospects.
Address Back-end Challenges
The single most important element responsible for the long-term success of companies in the Hispanic market is the commitment of the CEO and other high-level executives. This support is critical to the success of ongoing direct marketing programs because in addition to building relationships with customers, marketing personnel need to work with many different departments to properly upsell, cross-sell and renew Hispanic customers. Some of the processes and procedures that need to be worked out include:
• The training of data entry personnel and modifications to database fields. Many of the mistakes made addressing customers in follow-up communications begin in the data entry process. Hispanic names can be confusing, and data entry personnel must be able to clearly differentiate between first and last names. For example, María de Jesús is a first name, but it may be misconstrued as a first and last name. In addition, María de Jesús may have a last name formed by her father’s last name, Fernández, followed by her mother’s maiden name, García. So, her full name could be María de Jesús Fernández García. Although many Hispanics now use a single first and last name, not all do. Data entry personnel should clearly understand the differences.
Having the right structure of database fields also is important. Data entry personnel may understand how to properly break down a traditional Hispanic name, but the database structure must accommodate the correct number of fields. This particularly is important if you plan to develop personalized direct marketing efforts.
• Setting up bilingual, inbound telemarketing. If you ask Hispanic customers to call your organization, tell them what number to call for a specific language. It can be frustrating for customers who expect to talk to a service rep in Spanish to find only English, or be put on hold until a Spanish-speaking service rep is available. Also, plan for longer telemarketing service calls. You need 25 percent more words in Spanish to say the same thing in English. The relationship-building factor also is important to Hispanics. They need to feel comfortable and build trust with the person on the other end of the phone.
• Accommodating longer pay cycles. Many Hispanics have solid incomes and good credit history. However, some Hispanics originate from countries where credit is not available, or is tracked differently than in the States. Therefore, the importance of making payments on or before the due date may need to be addressed. In addition, Hispanics tend to pay with cash rather than credit cards, so they may need extra time to secure full cash payments or money orders.
• Designing Spanish or bilingual billings. Many Hispanic households are multigenerational. Therefore, the person ordering the product may prefer Spanish, but the one paying for it may be more fluent in English. A bilingual billing format solves this problem. A challenge with bilingual payment requests is limited space. Generally payment stubs are small, so use space wisely. The larger, dominant font should be used for the primary language and a smaller font for the secondary language.
• Adjusting metrics accordingly. If you compare the initial ROI numbers for acquiring and servicing Hispanic customers with their non-Hispanic counterparts, the results are not favorable. You have to spend more to implement the processes discussed to effectively market to the Hispanic market. However, once acquired, Hispanic customers often stay with you longer than their non-Hispanic brethren.
Be patient and persistent. Success in the Hispanic market does not happen overnight. Mistakes might be made, but if you’re tenacious and committed to developing winning Hispanic marketing programs, you will achieve success. ¡Buena suerte!
Gustavo A. Grüber is the business development manager for emerging markets at Banta Direct Marketing Group, a printing and supply-chain management provider based in Oak Brook, Ill. He can be reached via e-mail at ggruber@banta.com.
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