By Paul Barbagallo
In just four decades, the U.S. Hispanic market has more than quadrupled in size, from 6.9 million potential consumers in 1960 to more than 35.3 million in 2000. Hispanic buying power is increasing faster than that of any other minority group, notes Jeff Humpreys, director of the Selig Center for Economic Growth at the University of Georgia's Terry College of Business.
The U.S. Hispanic population currently represents approximately $600 billion in total household spending. Humpreys projects that by 2007, Hispanic buying power will top $926.1 billion.
"There's been a huge boom," confirms Lori Collins, director of business development, FocusUSA, a list company that manages many Hispanic lists. "About one out of every eight people in the United States is Hispanic. Mailers have been realizing the potential in this market."
Rick Blume, vice president of multicultural markets for list company 21st Century Marketing, concurs, but still perceives a sizeable corporate blind spot when it comes to the Hispanic market.
"I read a statistic recently that said only 30 percent of the companies in the United States are marketing to Hispanics," Blume says. "That's just too low."
Dependent on Data
An incentive for marketers considering entry into this market is the maturity of the marketing data and intelligence, according to M. Isabel Valdés, author of "Marketing to American Latinos: A Guide to the In-Culture Approach."
"Having intelligent and mature data gives businesses a more effective way to measure and track the market, and in turn, communicate with Latinos," says Valdés.
Indeed, a wealth of Spanish-speaking and Hispanic surname lists are available for rent.
Of the two, Blume notes a recent surge in companies targeting Hispanic Americans with Spanish-speaking lists.
"Hispanic Americans who speak Spanish at home do not get a lot of mail in Spanish, so when they do, they tend to open it," observes Blume. "That is one of the major reasons why Spanish-language marketers generally receive better response rates than English-language Hispanic marketers."
Blume advises marketers to take notice of lists of those consumers who have raised their hand to say that they prefer to respond to Spanish-language mailings.
"We have discovered that very few Hispanic consumers—less than 5 percent—will respond to both languages," he says. "If you are mailing a bilingual piece, then you can use both types, but the Spanish-speaking list will most often do better than the surname [lists]."
Fund-raisers, in particular, have done well in the Hispanic market. "Catholic fund-raisers do particularly well with this market because the majority of Hispanics are Catholic," shares Blume, who lists Catholic charities and religious fund-raisers as having rented files managed by 21st Century Marketing. "Super important is religious fund raising, because Hispanics tend to be very family oriented."
The Generational Divide
The age of your target group and its cultural background will dictate the communication methods you employ to reach that particular Hispanic segment.
For example, generation Ñ—Hispanic teens ages 15 to 19 who are mostly bilingual and bicultural—move swiftly between American and Hispanic cultures. This makes them the most acculturated Hispanic American market segment, and the most likely to respond to traditional American marketing mediums.
According to a recent study of Hispanic Americans ages 14 to 24 conducted by market research firm Cultural Access Group, 57 percent prefer to communicate in English. Only 28 percent indicated a Spanish language preference and 14 percent are comfortable communicating in either language.
"The longer consumers have lived in a new country's milieu, the greater the chance they will adopt behaviors, values and expectations from that new country," says Valdés.
Conversely, the older sect of Hispanic Americans are much more cautious, and need to be educated about a company's products and services before they make a purchasing decision, says Collins.
"It's a hand-holding process," she says. "[Older Hispanic Americans] generally are cautious about financial, insurance and credit card offers. They feel like having a loan is a last resort. They don't realize the necessity of having a nest egg."
Marketers targeting this segment of the Hispanic American population may want to consider sending a Spanish-language offer since most feel more comfortable speaking their mother tongue.
Direct Mail and Telemarketing
Marketers that have their sights set on Hispanic Americans might want to consider a multichannel campaign for optimum effectiveness.
"You're not going to get us with television alone, or e-mail alone, or radio alone, or direct mail alone," says Valdés. "You need a fully-integrated model to reach this market effectively."
In particular, experts suggest direct mail and telemarketing are the most effective channels. Recent studies show the average U.S. Hispanic household receives 20 direct mail pieces a year, compared to the 300 pieces the average Anglo-American receives.
"Hispanic Americans indeed appreciate a one-to-one relationship," says Blume. "They really have to know you and trust you to do business with you." He believes Hispanics respond to direct mail more consistently than any other medium because of its intimacy.
A well executed, emotionally and culturally attuned, Spanish-language or bilingual mailing communicates to this segment that your company and your brand care about the Hispanic market, avers Valdés.
Recently, Charlotte, NC-based Wachovia Corp. launched a multichannel advertising campaign in Spanish, targeting the state's large Hispanic market.
"The campaign for the Hispanic market is very much in keeping with the English campaign," says Kurt Hibbits, Wachovia's director of marketing communications.
The only change is to the tagline, from "common sense" in the English version, to "Sentido en Común" for Spanish targets. The remainder of the marketing message is presented in English.
The campaign has since been expanded to include other Hispanic markets in select states such as Florida, where 57 percent of the population in the southern part of the state is Hispanic.
As well as responding to direct mail, Hispanics have displayed a willingness to pick up the phone and order products without hesitation. Many marketers have had success with Spanish-language television commercials where a toll-free number is made available in large print on the screen, and repeated several times.
Make sure your fulfillment center is set up with a Spanish-language option.
"It's very important for a Spanish-speaking [teleservice rep] to get on the line," advises Collins.
When an individual calls an 800 number on a Spanish-language direct mail piece or responds to a DRTV spot, he or she will assume the line will be answered by a Spanish-speaking person.
Target Specifically, Think Generally
While Hispanic culture differs from that of traditional Anglo-America, they are ready to consume like Americans.
"Look at this group as you would look at the general marketplace," says Collins. "You have to segment just the same. There are some that are affluent, or interested in electronics, or are savvy on the Net, and you have to segment according to those lifestyle interests. But the more you get your brand in front of them, the better."