The Hispanic market has traditionally been underserved by financial products, but an aggressive program by Allstate Insurance is working to change that. And the market is hungry and responding: a direct mail test cell drew nearly double the response of a comparable pitch to non-Hispanics.
The trick, when Anglo firms approach Hispanic prospects, is to make sure that marketing materials are both linguistically and culturally accessible – even if the targets are English speakers. The U.S. Hispanic population has been embracing “retro-culturation,” according to Leonor Cockrum, a member of the emerging markets group at Allstate.
The Northbrook, IL-based insurer began using messages customized to this market in 1996, and has been refining its efforts based on market research and campaign results ever since. One key finding they are currently acting on is that even though Hispanics use direct response channels, they respond well to personal relationships, and “they still want to have an agent they can look in the face and check out their sincerity,” Cockrum said.
Furthermore, Allstate has found that using Spanish – even to those prospects fluent in English – evokes a familiar feeling, and makes prospects more comfortable about asking questions. This can be an especially powerful selling point when they are comparing similar offers.
Customer research has found several attributes that ring especially true with this market. Those within it who are relatively new to the United States may come from backgrounds where financial institutions are unstable. To them, stressing that Allstate has been in business for more than 70 years is a powerful sales point. And if the institution is willing to provide Spanish speakers, it has more than met its customer base halfway.
According to Cockrum, Hispanics repay this outreach with a much higher level of loyalty. “Agents will tell you for every Hispanic customer they have they will get 10 more. Three times higher than general market,” she said.
Recent efforts affirm these findings. A direct mail test segmented a prospect market into Hispanic and non-Hispanic prospects. Cells further measured the effectiveness of using a vice president to sign a cover letter versus a local field agent, as well as testing English-language against bi-lingual collateral.
The test went out to prospects in Arizona, California, Florida and Illinois. Overall, prospects responded better to having a local agent’s name on the letter, as opposed to a high-level executive. But the campaign’s biggest division came when comparing Hispanic against non-Hispanic prospects: Hispanic leads generated a sales rate 86% higher than Anglos, with a cost-per-sale that was 40% below that of other sleas, and a premium value that was 14% higher.
Cockrum cautioned that merely sending out material in Spanish isn’t enough: Some Anglo idioms that generate strong feelings, such as “bread and butter” to evoke basic needs, simply do not engender the same reaction among Hispanics.
One challenge that Allstate overcame was trying to determine which prospects were ethnically Hispanic, as opposed to having Hispanic surnames gained through marriage. To generate prospect lists for this outreach program, Allstate started with Hispanic surname lists, and used an outside vendor to verify that Spanish was spoken within the home. Once targets were so filtered, they were then checked for creditworthiness before being solicited.
To date, most of Allstate’s emerging market group’s activities have focused on Hispanic markets. But Cockrum said that both Asian and African-American marketing strategies were in the works.
Cockrum spoke at the Direct Marketing Association’s Financial Services Conference, which ended Tuesday.
