The Dos and Don’ts for Expanding Into the Hispanic Market

For nearly three decades, much has been written, talked about, lectured upon and researched about what has materialized as the fastest growing consumer segment in America, the Hispanic consumer market.

With the release of the 2000 Census, the discussions escalated to the point where many major marketers considered reaching this market a corporate priority. Any and all projections of growth of the Hispanic market have been exceeded since then: Population nears 50 million, with almost $1 trillion in spending power.

But nearly a decade later, there are still few companies on the Fortune 100 who have what any expert on the matter would consider a best-in-class, optimized program which is designed to properly measure and optimize the opportunity, let alone spend to the opportunity adequately.

If your company is among those who wonder why sales and growth have stalled, if your customer base no longer looks like the individuals your agency’s storyboards and casting calls reflect, and if there are more Ramirezes than Robinsons on your customer database, well, the time may just have arrived for you to take Hispanic marketing seriously. Very seriously.

The following is a list of some basic do’s and don’ts for those companies and marketing executives who have awakened to the aroma of the freshly brewed opportunity that marketing to Latinos represents. Hopefully, this list, as basic as it may seem, will help them avoid some commonly found pitfalls, as well as aid them in making the right decisions and finding the right partner.

Next Page: DO’s of Hispanic Marketing

Whatever you do, please do:

1. Get a commitment for Hispanic marketing from the very top of and throughout your organization. Yes, the CEO. The CMO. The board. Otherwise, it will just be another mid-level checklist item, one that quickly falls off the list when things get tough. Oh, and find your champions within the higher ranks. People who will make sure they defend your interest in this market when the budget cutting comes. It always does.
2. Frame the discussion as not a nice-to-do, but an imperative … an imperative that will have positive impact on sales, profits and, ultimately, shareholder value. Ask Walmart. Bank of America. Sonic Drive-Ins. McDonald’s. Toyota.
3. Avoid falling for lip service. If your company can’t seem to make a financial commitment to Latino marketing, it’s simply not committed. There is a big difference between commitment and interest. Yes, fight for a budget.
4. Do your homework. It is important that you make the necessary analysis in order to ascertain the viability and relevance of your particular product or service offering among Latinos.
5. Find out who your best Hispanic customer is. Yes. It’s part of doing your homework. Investing in a segmentation model for your particular category is one of the best things you could do. But, build it well, build it to last.
6. Look at your service model. Is it Hispanic-ready? Are you ready to serve this customer? You need to understand that this customer will react to your invitation. So, be ready. Your being committed to service is key.
7. Avoid going straight to tactics when devising your Hispanic initiative. It’s not just a matter of translating your general market executions (there is more on the don’ts side of the equation, so keep reading).
8. Go beyond the test paradigm. That’s so ’90s. Wake up. It’s 2009. We have an African-American president. Odds are we will see a Gomez or a Hernandez on the ballot someday. And you want to test a Hispanic program? You can rest assured your competitors aren’t testing; they’re doing. If you’re going to test anything, test copy, and invest properly in research on the front end.
9. Find a partner. Ideally, an agency that will have the intellectual, strategic and executional firepower to take you from A to Z. Find someone with experience, a track record is necessary. Please do avoid relegating this to the “resident Hispanic” in your organization who is ill-prepared to contribute meaningfully to your plan beyond the “I would say it this way or that way” comment. Just because someone is of Hispanic origin or speaks Spanish does not qualify them to be your sole source of information, opinion and counsel.

Next Page: DON’Ts of Hispanic Marketing

And, whatever you do, please:

1. Don’t approach Hispanic marketing with a cookie-cutter. Odds are, your go-to-market strategy for the general market will not work for the Hispanic market. So, don’t retrofit what is working in the general market. Ever heard of Frankenstein?
2. Don’t oversimplify your view of the Hispanic consumer segment. This is a complex market. Beyond there being cultural subsets (by country of origin), there are also Latinos who find themselves at varying levels of acculturation, which has a profound impact on how they view and consume products and services. This goes back to doing your homework. The segmentation model we talked about in the previous section? You bet, that’s part of what we’re talking about here.
3. Don’t get analysis paralysis. Yes, the Hispanic market is a complex market. But too many marketers allow their Hispanic plans to get stalled because they either are afraid to make a misstep or simply get befuddled by that complexity. Remember, Ronald Reagan always said that there were complicated problems, but, oftentimes, their solution was simple. Avoid needlessly becoming a victim of complications.
4. Don’t equate Hispanic with multicultural. First, the rules and practices that apply to Hispanics do not necessarily apply across all ethnic segments. Second, these “segments” deserve the proper attention and focus. To lump them all together because of convenience or because they are not “the general market” is absolutely the wrong thing to do. There is no such thing as a “multicultural” consumer. Think about it. Call us what we are. Latinos. African-Americans. Asian-Americans. Go with it.
5. Don’t equate Hispanic marketing with Spanish language. That is an old paradigm, and it only gives you access to a part of the market. The new paradigm is dealing with the realization that there is an enormous portion of the market which is bicultural. Marketers who have moved from marketing “in-language” to marketing “in-culture” feel as if they have found the Holy Grail. Why? Because they have tapped into the full potential of the market, not just that portion of the market which is Spanish-only. Furthermore, this paradigm has allowed them to tap into deep, actionable insights that make the work far more impactful, effective and relevant. There are many reasons why Latinos are Latino beyond language.
6. Just as a reminder: Marketing to Latinos in English does not mean assuming that your general market campaigns and communications effectively reach them and speak to them. Marketing “in-culture” means that you tap into cultural nuances, attitudes and insights which inherently speak to them as Latinos. This is the big win. It’s worth working for.
7. Don’t go on the cheap. For too long, marketers have assumed that Hispanic marketing is good to do because it’s cheap(er). These customers are loyal. They spend more time in your stores. They enjoy shopping. They are brand loyal. They believe in reciprocity. They believe in word-of-mouth. They have large families. They are the vociferous advocates of the American Dream. Time and again it has been proven that the LTV (lifetime value) of these customers exceeds the general market. Why should you proportionately spend less to attract them? And why should you spend less when you hire a specialist to help you with this endeavor? Would you pay less for your cardiologist just because he or she specializes in that one little muscle?
8. Don’t assume Latinos are low-tech. The fastest growing channel to reach this customer is quickly becoming digital. The speed at which we are moving online, using digital technology, owning and using digital devices is over-indexing against the general market.
9. Don’t assume that the Hispanic market opportunity only applies to low-ticket items or general merchandise. We buy flat screen TVs, jewelry, cars, homes, brand-name running shoes, designer apparel. We know who Nike, Prada, Gucci, Lauren, Sony, Apple and Vaio are. We are on a first-name basis, actually.

Alex López Negrete is president/CEO, CCO of Lopez Negrete Communications.