Five Tips to Captivate the Hispanic Market
By now, most financial institutions have seen the numbers.
Numbers such as the purchasing power of Hispanic consumers in America will reach $1.5 trillion by 2015.1 Or that 82 percent of Latinos polled believe that staying informed about their credit history is important. 2 In addition, there are an estimated 55 million Hispanics residing in the United States and more than half of them are under 30 years of age.3 So, there’s no doubt that a burgeoning opportunity exists in the U.S. Hispanic market. The doubt arises in determining the best way to capitalize on it.
Here are five tips to help financial institutions penetrate the rapidly-growing Latino market and hopefully, win customers for generations to come.
1) Develop a Comprehensive Strategy
Many organizations don’t succeed at penetrating the Latino market because they don’t take the time to develop a comprehensive, data-driven strategy. This type of strategy needs to include in-depth analytics so you know which niche of the Latino market you’re going to target and how that niche feels about their brands and the products they buy. For example, Hispanics in Los Angeles may feel differently about a product, than Hispanics in New York. Your strategy should also include well-defined objectives, goals and projected results, along with the process that will be used to obtain those results. Without a clear roadmap, it’s difficult to justify the funding for a well-targeted, marketing campaign.
2) Don’t Confuse Bilingual with Bicultural
Of course, it’s important to have your marketing materials and website in both Spanish and English. But just translating your material into Spanish isn’t enough. You need to understand the cultural relevancy of the market and that relevancy should be reflected in your marketing materials, branches and how your brand relates to your Latino customers.
And a since a large majority of Hispanic consumers believe their credit history is important, it might be worthwhile to provide a culturally-relevant credit monitoring product. There are Spanish-language credit monitoring products that provide credit monitoring, credit reports, credit scores and credit literacy resources. Some of these products are available in both Spanish and English, which may be a good compromise for multi-generational Latino households.
A good way to accomplish biculturalism is to hire professionals deeply embedded in the Hispanic culture. You could also form a partnership or strategic alliance with a bicultural Latino company.
3) Overcome the Trust Barrier
In addition to language and cultural barriers, there may also be a trust barrier. Many Hispanic immigrants have had poor experiences with financial institutions in their home countries. This is especially true in countries where the government controls the banks and can freeze its citizens’ assets during an economic downturn. Others have experienced problems with hyper-inflation and currency devaluations, making them reluctant to put their money in the bank.
This is why it’s so important to embrace the Latino culture and explain the U.S. banking system to immigrants in their own language. For example, 75 percent of the Hispanics polled are likely to watch financial programs in Spanish on Univision, UniMas or Galavision.4 You may want to ease their fears by explaining that the FDIC insures deposits up to $250,000 and that establishing good credit in the U.S. can lead to a richer, more fulfilling life.
4) Cultivate Long-Term Relationships
One common myth is that Hispanics only use financial institutions to cash checks or transfer funds to their home country. This couldn’t be further from the truth. The truth is Hispanics value long-term relationships. Although older generations may prefer developing relationships in person at a branch, while younger Hispanics may prefer developing a relationship online. Either way, if you develop strong relationships with Hispanics, they are likely to refer their friends and family to your bank.
5) Cater to Foreign Nationals
You don’t have to wait for immigrants to become U.S. citizens to turn them into customers. Financial institutions can accept alternative forms of identification such as passports and Taxpayer Identification Numbers to allow foreign nationals to open accounts. As time goes on, the foreign national may become a U.S. citizen who needs a loan to buy a car or joins with another family to buy a house. The immigrant may also have children who grow up and bank with the same financial institution. And this second generation may apply for car loans, student loans, mortgages and business lines of credit.
The Time to Act is Now
The opportunity to capitalize on the Hispanic market is getting slimmer due to fierce competition.
Numerous financial institutions have already entered this arena and more are on their way. The time to take advantage of this opportunity is now, because the longer one waits, the more complex it will become to compete for this coveted market segment.
For more information, visit www.experian.com/affinity
1 Nielsen Perishables Group Fresh Facts ® Shopper Insights study.
2 Experian Consumer Insights Online Study, 2012.
3 11th Annual Hispanic Fact Pack, Advertising Age, July 2014.
4 Univision Spanish Language Credit Product Study, ECS Consumer Insights, June 2013
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