MAY 9, 2007    VOL. 2 / NO. 17

Common Mistakes Marketing to Hispanics

For a direct marketer it should be obvious: send mail in Spanish to an individual with a Hispanic surname.

Actually, it's not so obvious and could be considered a big faux pas, said Beth Goldstein, founder and chief executive officer of the Boston-based Marketing Edge Consulting Group. That's because just over half of Hispanics (56%) speak Spanish only, while 18% speak only English or another language and another 25% speak Spanish and English, she said, citing data from a study by Synovate, the global market research arm of London–based Aegis Group plc.

“Some who receive a mailer in Spanish may be insulted if they speak only English,” Goldstein said.

Goldstein made her remarks on March 29 during a presentation entitled “Marketing to Hispanics,” hosted by Tampa-based Onsite Conference. She said that spending power of the U.S. Hispanic market is expected to increase from $863 billion this year to $1.087 trillion by 2010.

However, marketing to this customer segment is often frustrated by common errors, many of which have to do with linguistic or cultural misunderstanding, she added. Her list of the top mistakes included:

• Lack of a bi–culturally educated staff. Goldstein said companies are at a disadvantage if they fail to realize how important it is to be able to speak to customers in Spanish when necessary.
• Bad Web site translations. Goldstein said companies have to make sure that the Spanish terminology they use does not have a meaning different from that intended. She cited a computer company with a Web page entitled “Warranty and Customer Support.” The company translated this into Spanish as “Garantía y soporte al cliente,” which actually meant, “Putting Up with Online Customers.”
• Failure to launch educational programs. Goldstein noted that many Hispanic customers come from countries where significant parts of the population are un-banked and predominately operate with cash. She applauded Freddie Mac, the federal mortgage insurance company, for CreditSmart a bilingual program to educate Hispanics and other linguistic groups about mortgage products.
• Assume that Hispanics do not have significant incomes. In fact, Goldstein said, more than a million Hispanic households have incomes greater than $50,000 and 15% of Hispanic households are considered affluent, with incomes above $75,000.
• Assume the U.S. Hispanic market is homogeneous. Goldstein cited General Motors Corp. for advertising its Saturn brand in Miami with photos of women dressed in traditional Mexican costumes when the majority of Hispanics in that city are Cuban.

Failure to realize that Hispanic communities have their own influential institutions and leaders. Goldstein said one of her clients, a small New England bank, found after consulting with such leaders that direct mail wasn't the best way to reach potential Hispanic customers in its market. Instead, the bank decided to sponsor community events and advertise on radio, which proved more successful, she said

Because the Hispanic market is large and growing fast, financial institutions should view their efforts to tap this market as a long-term investment, Goldstein said. “Get involved early while the community is growing. Then, they will remain loyal as their wealth is increasing.”

(For more on marketing to Hispanics, see “Making Branches More Attractive to Hispanics” in the December 6, 2006 issue of BAI's Banking Strategies Retail Delivery Insights.)