By Lina Carrillo Tracey
According to the 2008 estimates of the U.S. Census Bureau, the population of the 50 states, the District of Columbia, Puerto Rico, and the other insular areas of the United States was 305,986,357. Hispanics comprise approximately 18.3 percent of that population. They constitute an untapped marketing target for all types of enterprise – both companies that market products and those that provide services. It makes good sense to choose Financial Institutions as the businesses that would benefit most from targeting their marketing efforts to Hispanics.
The Hispanic Financial Perspective
My brothers immigrated to the US more than a decade ago. Both are economically healthy and stable. They placed business acumen and strategies at the forefront of their goals. In the beginning, they didn’t take any loans; they bought everything with money orders or cash, including their homes, cars, and appliances,. That is a common cultural practice, largely among new immigrants, due to the fact that they need to work to establish credit in the US.
Every time my American husband and I purchased a car or a home appliance, he insisted on using the full benefits of credit. In the back of my mind I can hear my father’s philosophy at home saying: “You get it when you can pay it all in cash…otherwise don’t even go there.”
This article will address the problems and challenges of marketing to this large (but surprisingly) diverse Hispanic population — quashing Hispanic myths, selecting appropriate marketing strategies and tactics, and developing a “to do” list for your marketing effort.
Facts About Hispanics
According to the latest census figures, their population has risen to 42.7 million, an increase of more than 50 percent since 1990 — and 35 percent of them are less than 18 years old. By 2010, it is estimated that Hispanic/Latinos will reach a total of 56 million.
Their location is spreading across the United States, North to South and East to West, where formerly they were largely residents of the West and South (California, Texas, and Florida).
They are a pluralistic society, comprising many races, cultures, and national origins, black. brown, tan, and white, including native Americans, Puerto Ricans, Cubans, Mexicans, Columbians, Venezuelans, Chileans, Argentines, and many others.
Their affluent population (income over $100K) is growing rapidly, and their purchasing power is thriving (estimated at over $600B).
The teen market is exploding, growing as many as six times faster than the rest of the teen population.
Hispanics are far behind the curve when it comes to utilizing the principal vehicles for generating long-term wealth: financial products and markets. They lack information about financial tools, along with a cultural distrust of securities and other financial documents..
Most Hispanics come from countries where financial institutions have historically been highly unstable, so there are barriers, born of hard experience, regarding the best way to manage their finances.
Hispanics in general lack understanding of the concept of personal credit. They distrust credit because they don’t understand how to use it. They also need to be educated about the perils of its misuse. This could lead some people to believe that Hispanics are a credit risk, and they are often rejected or underestimated as a targeted market. But Latinos don’t like the idea of being in debt and risk losing everything for which they have worked so long and so hard. So, to their benefit, Hispanics pay their loans ahead of schedule, in cash, or by money order. With the recent stock market crash, many Hispanics feel vindicated for their mistrust of the market—and who could blame them!
Because Latinos have a hard time establishing a credit history, a possible solution is to encourage them to develop a business relationship with a bank, as a means of measuring their credit worthiness and help them establish good payment behavior. Services to which Latinos subscribe and pay on credit include cable services, Satellite TV, or long distance telephone.
Only 50% of Spanish dominant Latino’s have a bank account, compared with 77% bilingual Latinos and 79% English-dominant Latinos. And most of them are “under-banked,” meaning that they have a very limited relationship with a bank, perhaps having only a savings account or an IRA, although in the last few years more and more banks are now allowing people to open accounts with consular I.D. That has helped the isolated portion of the Hispanic population to break the ice with a financial institution.
There are many differences to consider if we want to understand and connect with our Latin population. Hispanics’ relationship with banking differs, depending on their level of assimilation into the US culture, and their ability to communicate in English.
Should you advertise in English or Spanish? When marketing your service with LatinLink, your campaign will involve not only moving between languages, but also between cultures and the historical contexts of those cultures. So simply mailing out a bilingual postcard is not the most effective way to reach this particular market.
To capitalize and receive all the benefits of the booming Hispanic Market, financial institutions must educate the Latino Market about important financial tools and develop programs in both Spanish and English. But be careful! Translating from English to Spanish can be another stumbling block. Avoid vendors that use translation software, and believe me, there are a lot of them. Native speakers can spot their work a mile away. They’re just not credible!
Financial institutions must first determine whether they are trying to reach isolated immigrants or focus on Spanish-speaking, first-generation people. Hispanics who might not be fluent in English, or second or third generation, who were either born or raised here and thus are likely to be more assimilated. Then, offers should be tailored to the target’s degree of acculturation. For example, prepaid debit cards are popular among newly arrived first-generation Hispanics. Savings accounts and credit cards may appeal more to second and third generations. And third-generation Hispanics may want more information on mortgage and insurance products.
Although most financial institutions feel it is okay to use generic “classroom” Spanish, it is worth considering the benefits of translating into the local dialect used by the specific nationality they are trying to reach. It’s more expensive but it’s more in tune with how Hispanics speak with one another. Therefore, it may connect better with the reader or listener, whether he or she is from Colombia, Cuba, or Nicaragua. Being Hispanic or Latino means identification with one of 25 different nationalities from Mexican (the largest sub-segment, comprising more than two-thirds of U.S. Hispanics) to Venezuelan (among the smallest).
Every segment of the Hispanic/Latino population has its own dialect and customs that may differ greatly from one another. If your market has a mix of Hispanic nationalities, which happens in many urban neighborhoods, it may be best to use a “universal Spanish,” meaning one without an accent, particular dialect, or colloquialism.
There are other ways to connect with the Hispanic population, other than their language. For example, using materials that include iconic artwork, even design elements and colors, that will be recognized and appreciated by their culture— or, using photos depicting Hispanic people or cultural habits and norms. This is especially important in multigenerational households, where the material may be shared among several family members who have different degrees of acculturation.
More importantly, if you want Latinos approval and loyalty, you must start thinking about ways to support the Latino community in other ways that are meaningful to them. Latinos are very loyal to families — and brands. If you give back to this community, they will always give back to you. Consider sponsoring events, donating money to the Hispanic community, charity events, etc. This could be a significant opportunity, where both sides can benefit by recognizing each other’s existence, by breaking the cultural ice, keeping the buzz going, and starting a meaningful relationship
A “To-do” List to Launch Your Program
Encourage Hispanics to develop a business relationship with a bank.
Target your venture at a specific segment of the Hispanic population.
Start with products that will have the most appeal to that segment.
Make your ads informative by including information that will help the audience understand their appropriateness and value.
Avoid vendors that use translation software.
Taylor the ads to the appropriate level of acculturation.
Consider (with due caution) using a “universal Spanish” — one without an accent, particular dialect, or colloquialisms.
Use ways other than language to connect with the Hispanic population.
Select materials that include iconic artwork, design elements, and colors, and photos that will be recognized and appreciated.
Support the Latino community in other ways that are meaningful to them.
To learn more about Lina Carrillo Tracey and the rest of the LatinLink team click here.
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