Tuesday, September 05, 2006

Hispanic Direct

Coming late to the Hispanic market? The Selig Center for Economic Growth, at the University of Georgia, has just reported that in 2006 the purchasing power of the Hispanic market will match that of African-Americans. In 2007, Hispanics as a group will surpass all minorities.

At 12.4 percent, Latinos are the nation’s largest minority group, according to the US Census Bureau. It’s also the fastest-growing minority group, with economists predicting Latinos’ purchasing power will reach $1 trillion by 2008.

Jeff Humphreys, the Selig Center’s director, points out that Hispanics’ economic impact has risen from $212 billion when he started the assessments in 1990 and he expects it to be $1.2 trillion in another five years.

This “news” is not a surprise to marketing people who’ve been watching the growth of Hispanic-American communities and their buying power – even direct marketers. Despite the hindsighted nature of the Selig Center’s report, however, it’s causing some people to pose questions:

A broadcast producer and sports announcer in Omaha, Roy Coffman, recently asked, How is this going to change our Marketing and Advertising attitudes? Do we start paying a little more attention to Hispanic publications and broadcast media? Or do we simply continue down our familiar Yellow Brick Road?

We are seeing an ever-increasing number of Hispanic individuals moving into one section of the city. There they live, own their own businesses, shop in their own stores and their kids go to school, when they aren’t running back to Mexico to visit family members. Now how does the rest of the business community reach out to this demographic, or do we just sit back and watch? At least here in the Midwest this will be an ever-increasing question.

These questions have already been answered.

How and when? The facts have been staring most marketers in the face since at least the last census six years back. It’s not the “growing” Hispanic market that’s arresting – it’s already grown.

Marketers in Hispanic-Americans’ early, high-growth areas like California, Florida, New York, and Texas already know the right questions to ask, and have developed or adopted ways to reach these Hispanic markets, which are hardly monolithic.

Whether you come to it late or early, research has proven over and over again that Hispanics’ attitudes and feelings are currently based on different priorities than “mainstream” America – different cultural values that mean sales messages ought to be cast in different ways, in different voices. You have to think about communicating in someone else’s culture.

Meantime, is direct mail to Hispanics being overlooked?

I met Beatriz Mallory, CEO and chief strategist of New York agency HispanAm√©rica, when she spoke to an AMA group here in Houston last year. In Chief Marketer, she says, “I would say that the biggest misconception about the Hispanic market is that we don’t respond to direct marketing, that we don’t buy that way. But there’s plenty of evidence that we do. There’s client-based experience – [companies] like GE Consumer Finance have entire Hispanic marketing divisions set up to support [the] areas of their business [that] market direct to consumers.”

Today, in terms of direct mail or direct response marketing:
---The process of acculturation does influence Hispanic consumers’ perception of direct marketing. (Assimilation, however, is growing and that will affect the market’s future.)
---While most general market consumers dismiss direct marketing materials as “junk mail,” Hispanics (particularly recent immigrants) welcome it as a means of becoming a more informed consumer.
---Overall, Hispanic households are 3.5 times more likely to respond to a direct mail solicitation than non-Hispanic households.
---72% say they always read their mail, including direct marketing.
---60% of the direct mail sent to homes is in English.
---52% of the respondents speak only Spanish in their homes.

Companies like GE Consumer Finance, Kaiser Permanente and Reliant Energy have already been taking advantage of the statistics above and boosted their mailings to Hispanic households. So even if you can’t write in Spanish, you can aim for Hispanic markets. You need to have both an understanding of and practice in addressing Hispanic consumers’ wants and desires.

In the American here and now, direct mail to Hispanics is growing.

Thanks and a tip of the Hatlo hat to Direct Marketing Network, Houston, for the Reliant Energy direct mailer. Concept by Charles Eldred and Richard Laurence Baron.


Roy Coffman said...

Richard, it is a huge market as several reports have shown. In this part of the old west I have found that going directly to the Hispanic print and broadcast media and using a couple of the direct mail groups available works here. Thus far I have mostly used their design and production abilities, and it works. Reaching the Hispanic market is going to force a great many of us to change a lot of our lazy habits.

Roy Coffman said...

Richard, my recent work was in conjunction with a friend and for a shopping mall here in Omaha. The effort was very successful.

It was in a way a training exercise for me and some of the things we did I will use in a promotional effort for a drag stip over in Iowa. You are right: Omaha and KC both have Hispanic Chamber groups and they are easy to work with. I too find it very interesting that Hispanic broadcasting (radio) stations as well as newspapers watch market trends very closely and normally offer fairly good advice, especially if they think you will be back often.