Why You Can’t Afford to Wait
to Start Marketing to Hispanics

by Terri Truesdale-Fraser

Hispanics
currently spend
$542 billion
per year with
that figure
expected to
reach $1 trillion
by the year 2010.

Hispanics are now the nation’s largest minority group, surpassing African-Americans. Today, Hispanics account for 14 percent of the U.S. population but that number is poised to explode. In the first 50 years of this century, the U.S. Hispanic population is expected to grow 188 percent.

In Kansas, the Hispanic population is expected to increase 70 percent in the next 20 years. Missouri’s numbers are 64 percent growth anticipated from 2005 to 2025.

Those numbers translate to spending power. Hispanics currently spend $542 billion per year with that figure expected to reach $1 trillion by 2010. Businesses that begin now to effectively reach U.S. Hispanic consumers will be poised to reap rich rewards.

While businesses cannot afford to wait to begin marketing to this crucially important market segment, they cannot afford to market to Hispanic consumers until they understand the unique nuances of this market and how to meet its needs. U.S. Hispanics tend to be younger, cashbased and brand-loyal. They are less likely to complain about products or service but, once lost as a customer, they are exceedingly difficult to win back. This issue is critically important because word-of-mouth recommendations— both positive and negative—carry greater weight in the Hispanic community.

Reaching this market requires different strategies and tactics than used with the mass market. For example, a local company driving repeat business offered its mass market customers a discount on their next visit. Hispanic customers, who are driven by personal recommendations, were offered a discount based on referrals. Providing discounts for the referring customer and the new customers took cultural differences into account, which led to a successful marketing program and increased business.

Companies need to recognize that targeted advertising is only a piece of the integrated grassroots approach required for success in this market. It’s equally vital that organizations create positive in-language consumer experiences during the entire customer lifecycle to retain those customers.

Although some Hispanics are becoming acculturated, more than 70% are bilingual and prefer advertising that is in Spanish and culturally relevant. Translating English ads to Spanish is not a good option; simply changing English words can lead to disastrous cultural faux pas as several American companies can attest. Instead, it is imperative that the messages be transcreated, drilling down to the original concept and adapting it to Spanish with culturally relevant graphics and design.

One area in which businesses have begun to focus on transcreation is web site redesign. Many companies have realized how critically important it is to not just translate their English site, but to create new content to attract Hispanic customers. Companies with large dynamic web sites do not need to transcreate their entire web site. Creating a smaller, Spanish-language web site featuring top products and culturally relevant information and merchandise can be more successful and far less expensive.

Brands that are successfully marketing to U.S. Hispanics are embracing ethnic marketing across their organizations, incorporating it into all products, brands and divisions rather than keeping ethnic marketing as a separate entity.

They also are taking into account the need for segmentation and tailored approaches within the Hispanic market. They understand that all Spanish language and all Hispanics are not the same. Mexican Spanish is very different from the Carribean Spanish spoken by those who originated in Cuba, the Dominican Republic or Puerto Rico.

Some companies also have seized on the opportunity to attract these brand-loyal customers by creating unique products designed for the Hispanic market. Launching products targeting Hispanics, such as Mayonesa con Limón (lime-flavored mayonnaise) and Gelatina con Leche (gelatin with milk), have been successful strategies. These products are packaged like mainstream products, with the intent of also attracting mainstream consumers.

Joining the ranks of companies successfully marketing to U.S. Hispanics requires expert knowledge of the market. Utilizing that knowledge has the potential to increase market share and profits for many years to come.

Terri Truesdale-Fraser is a senior consultant with TWG Consulting. She can be reached by phone at 913.268.3320 or by email at tfraser@twgconsulting.com.