What is the business case for marketing banking services to Hispanic consumers?
Fabian Yepez, Rumbo Marketing: Financial institutions cannot afford to ignore the growing Hispanic market. By 2020, 1 in 5 Americans are expected to be of Hispanic origin, and by 2050 that number will be approximately 1 out of 3. Bank and credit union marketers need to understand that this is not a passing fad, and that a long-term investment will ultimately pay off. The current U.S. landscape has evolved and will continue to do so in the next few years. Especially when financial institutions focus on younger audiences, it’s necessary to pay attention to this vital ethnic segment.
What’s the biggest mistake you see financial marketers make when targeting a Hispanics?
FY: The most common mistake is assuming all Hispanics are the same, and that they can be addressed as one big homogenous group. I can’t tell you how many times we hear someone say, “We tried reaching out to the Hispanic market. We translated all our materials and it just didn’t work.” Or another example, “We were thinking of hiring a mariachi band because Latinos like mariachi bands.” The Hispanic market is complex, and there are numerous variables that need to be considered, as there will often be with any niche market.
Additional mistakes I have seen? Some financial institutions think they only need to address the language barrier. Others believe that because something worked in one market it will work in another. Many are just simply unprepared internally to deal with a Hispanic market, even if they have the language component covered.
We have been hearing these kinds of examples for years, and unfortunately they are still happening.
Why is marketing financial services to Hispanics so tricky?
FY: While conducting research a few years ago, I spoke with some tellers who mentioned that it was too much work when Hispanics wanted to open a new account, particularly Spanish speakers. They said that when non-Hispanics wanted to open an account, the customer would usually just ask where to sign and get on with their day. But with Hispanics, opening an account meant an initial visit to gather information, a second visit with additional questions, and possibly a third visit to finally agree to open the account. And each time, they came accompanied by a friend or relative.
What the tellers didn’t understand was that for many Hispanics, this could be their first account in the U.S. — maybe ever — and may feel distrust, intimidation, or simply don’t fully understand how financial institutions in the U.S. work. An important aspect about this market is that they need to feel comfortable with whom they are dealing with, and need to build and establish a relationship first. This could take three or more visits. When Latino customers get to the point where they’ll ask tellers where they might find a trustworthy babysitter, or recommend a good mechanic, then the financial institution can be certain that a solid relationship has been established.
And remember the friends or relatives that came with them in the beginning as the relationship got underway? Many of them are also likely to become customers. Word-of-mouth referrals play a huge role with this market, so the extra time and patience invested in the one initial Hispanic customer can lead to many more flooding in, just from that first contact.
Once Hispanic consumers feel that your organization understands them you will start to see results, and move on to develop enduring relationships that will last long into the future.
What has your client, Grow Financial, done right when targeting Hispanics?
FY: When Grow Financial FCU came to Rumbo Cultural Marketing looking for a full on Hispanic Marketing program, we started with an in-depth research phase, prior to even saying “Hola” to any Hispanic members. The Tampa Bay Hispanic market is unique, with a very diverse breakdown unlike other parts of the country. Even though there are many cultural and traditional differences among the Mexican, Puerto Rican and South American population, we were looking for something that was shared by a majority.
The result? Quinceañera parties. When a Latin girl turns 15, a significant celebration takes place to mark the transition from childhood to young adulthood. These parties are sometimes as elaborate as a wedding. Many families acquire large debt in order to throw these events, so we wanted to help make this celebration possible. Project Quince was developed as an account that allows to start saving at an early age, requiring minimum monthly deposits, and with additional benefits over a traditional savings account. It has been very well received in the local market.
Also, if financial marketers are looking for ideas to connect with Hispanics, they should take a look at BofA. I like what BofA has been doing for this market, especially when targeting Spanish-speaking Hispanics.
Marketers are often reminded how important “family” is to Hispanics, but there has to be more to it than just using stock photos of large Latino families, right?
FY: That’s a good point. I agree that the use of images of the multi-generational Latino family — that apparently always must always include “abuela” (“grandmother”) — is now bordering on stereotypical. Again, not all Hispanics are the same, and while the notion of family is very important, there are many other creative ways to convey your message. Which is why financial institutions need to partner with marketers who understand this segment. And the key word here is “marketers.” Just because someone is Hispanic doesn’t necessarily mean he/she knows how to sell to Hispanics. Protect your brand by hiring professionals who are knowledgeable and experienced in reaching out to different cultural markets.
What should financial marketers pursuing Hispanic consumers look for in an ad agency?
FY: We definitely recommend partnering with a professional team that understands what you’re trying to accomplish and recognizes the importance of protecting your brand in the process. Find an agency that genuinely understands — and most likely lives — the combination of lifestyle, behaviors, tendencies and culture of your target market. You need to look for professionals who understand the cultural nuances involved, and how these need to be applied to make sure your message is consistent, maintaining the same tone and feel of the brand across the board.
Any closing advice you’d like to leave readers with?
FY: Please don’t give your materials to someone in a branch that speaks Spanish so they can translate it. Specific materials should be developed because there’s much more involved than just language. You can really put your brand in jeopardy by using straight translations. The risk is just too high.