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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.
Tune in to Español
How to Handle DRTV Response
By Chris Purdy
Direct response television (DRTV) advertising that targets Hispanic audiences has proven to be an effective way to reach a growing segment of the U.S. consumer market whose purchasing power is expected to reach $1 trillion by 2010. According to Nielsen Monitor-Plus, Univision, the Spanish-language network, reported increased ad revenues of 13 percent for 2005. As a comparison, overall U.S. ad spending grew only 4.2 percent.
The opportunity is undeniable. However, there are a few, key back-end operations you need to consider when setting up a Hispanic DRTV effort to make sure you maximize your investment.
Handling Calls
Increased DRTV ad spending usually means increased response from Hispanic consumers for companies that include a call-to-action, such as a toll-free telephone number, in their media. This increase in response, however, poses a unique problem in the DRTV format: It typically produces call spikes—high, short-term increases in call volume.
Call spikes are a challenge for any call center, but Spanish-language calls pose a bigger challenge since there are fewer call centers that can handle DRTV-driven calls. As a result, understanding how media buys impact call spikes and service levels will minimize lost calls. The ad format and the number of times the call-to-action is aired impacts the flow of calls, and the time and location of the ad affects volume. If given a media schedule in advance, a call center experienced in handling DRTV-generated calls will be able to provide a 90 percent service level.
Generally, calls driven by a Spanish-language DRTV offer will last 20 percent to 30 percent longer than a similar call generated by a general market offer. Because immigrants comprise a healthy percent of this market, customers may ask more questions about your company and product. This longer call time will increase your costs, but the increased product understanding and rapport with your customer usually leads to a higher conversion rate.
If you are trafficking DRTV calls to an internal, Spanish-language call center, ask yourself if it has the staff and technology to handle the projected frequency and volume of call spikes. If in-house resources are not sufficient, consider outsourcing your call center operations to a third party.
When selecting a vendor, consider its capacity, experience, client services structure and reporting capabilities—not just cost. In the DRTV sector, a shared environment where sales agents handle more than one client program is the norm. Charges typically are incurred on a per-minute basis when the agent is on the phone handling a call. With consistent, ongoing inbound volume, using a dedicated agent with a per-hour charge may make financial sense.
If you decide to outsource the handling of your DRTV response, a Spanish-language call center usually is preferable to a bilingual call center. While bilingual agents often are well-spoken in a second language, they may not have mastery of the language—and that can affect sales. In addition, we've found that, on average, 99.3 percent of respondents to a Spanish-language TV ad aired during Spanish-language programming will prefer to speak Spanish.
Getting Paid
Now that you've answered the call and closed the sale, it's time to take care of the final transaction: payment.
Credit and debit card payments are the standard form of payment for products or services sold via DRTV ads. While this also is true in the Hispanic market, credit card penetration has not yet reached the universal usage that exists in the general market. As a result, a company using DRTV to reach Hispanics should consider alternative forms of payment such as cash on delivery (COD).
Of the 2 million calls Global Telesourcing fielded last year from the Hispanic market, approximately 30 percent of callers didn't have credit or debit cards, or didn't want to pay for purchases using credit or debit cards. Given the option, 50 percent of customers that do not pay by credit card choose COD.
The power of the U.S. Hispanic market can't be underestimated and shouldn't be ignored. When you reach out to Hispanic audiences, make sure you have all the tools to effectively handle response. Only then can you tap the full potential of the market.
Chris Purdy is executive vice president at Global Telesourcing, an Alexandria, Va.-based company offering comprehensive Spanish-language customer care and sales solutions. Purdy can be reached via e-mail at cpurdy@globaltelesourcing.com.
Web Culture
How to communicate with Asian-Americans online
If you're actively targeting Asian-Americans, you need to be able to attract and service them online. This market indexes higher than the general population in weekly Internet usage. To get a better perspective on how best to communicate with Asian-Americans via the Web, Target Marketing spoke with Saul Gitlin, executive vice president of strategic services and new business at Kang & Lee Advertising, a multicultural marketing consulting and communications agency that specializes in reaching Asian-American markets.
Target Marketing: How actively do Asian-Americans use the Internet?
Saul Gitlin: There have been many studies that have looked at Asian-American use of technology and the Internet. All these sources point to the same conclusion: Asians are early adopters of technology. They're the most likely to have computers at home. They also are mature users of the Internet as defined by how long they've been online, their frequency of going online, how much time they spend online and their propensity to research products, purchase products, and conduct financial transactions online.
For example, the Cultural Access Group 2005 Asian American Market report shows that 70 percent of Asians have Internet access at home. When we look at weekly Internet usage, Asians are the highest, using the Internet 18 hours a week, followed by Hispanics with 16 hours a week, African-Americans at 14 hours a week, and only 12 hours a week for Caucasians.
TM: How important is it for marketers to adapt their sites to service Asian-American customers?
SG: When we look at our top Asian-American populations in the country, we know they exhibit a [strong] preference to consume and communicate in media in their native languages. However, in many cases, because Asians are highly educated, they also are competent in English. So while Asians are heavily using Asian-language sites, they also are going to English-language sites.
I think it really comes down to one of the basic tenets of why multicultural marketing is valuable. If a marketer decides to customize a Web site for a particular language spoken by an immigrant group … or goes a step further and actually builds in more cultural elements to the site in terms of design and functionality—it becomes the difference between putting a general Web site out there in English and hoping diverse groups will come and use it and … sending what we call a hand-engraved invitation to [ethnic] populations to use the site.
That said, there are segments of the Asian population that are much more comfortable [communicating] in their native languages. So, for a certain portion of [marketers'] potential [audience], building in language-appropriate content may be the difference between access and no access.
TM: How should marketers construct their sites to attract and retain Asian-American customers?
SG: If it's a content site, it's about making it accessible through language and delivering content that's relevant. … If it's an e-commerce site, you need to be offering relevant products and services, which will vary per product category. Again, it's about access, language and products.
The other thing to realize is that for an audience like the Asian population, which largely is an immigrant audience, sometimes you may need to provide more information to explain a brand, company or a product that might be taken for granted by the general audience. For example, Asians are very good about evaluating investments and other financial opportunities and products. But, in this country, we have some products that may not exist with the same names overseas. An example is a mutual fund. Around the world there are variations on what a mutual fund product is, and it's not called a mutual fund everywhere. So … if you put up a site targeting Asian immigrants about mutual funds, you might need more explanation about what this product is and how it works. It's not just about language translation. It's also about what content [you include] and how much content you provide.
Saul Gitlin can be reached at saul_gitlin@kanglee.com.
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