Just by asking the question “Why Market to Hispanics



Hispanic Operational Readiness

The Key to Hispanic Marketing and Sales Success

HISPANIC OPERATIONAL READINESS

THE KEY TO HISPANIC MARKETING AND SALES SUCCESS

You've read the statistics, you've seen the Census data - Latinos are the largest and fastest-growing ethnic group in the U.S. Whether you live in Los Angeles where the Latino population is the largest in the country (42% of the total population) or you live in Greensboro, NC (the fastest-growing Latino market, with a 674% increase in Latino population since 1990), the Latino population cannot be ignored. It is large, getting larger, and for marketers and businesses, it means a huge opportunity to gain incremental business.

The Numbers are Huge

The latest Synovate data (Synovate 2008) reveals that there are 47 million Latinos residing in the United States. Just how many is 47 million? Consider this: there are more Latinos living in the United States than there are Canadians in Canada.

Another way to look at it: currently, almost one in seven U.S. residents is Latino. By 2020, this ratio will increase to one in five. And this is having a profound effect on business and marketing efforts. Most brands, companies and services are scrambling, trying to learn how to effectively tap into this large, lucrative and rapidly-growing market. In these tough economic times, companies are so eager to cultivate this new market, they often neglect a critical component that is central to their sales and marketing success: Hispanic operational readiness.

WHEN TARGETING HISPANICS, DON’T FORGET ABOUT OPERATIONS

We see it over and over again: a company begins a Spanish language media effort, spends hundreds of thousands of dollars, but neglects to fully prepare for what will happen when Spanish-dominant consumers try to do business with them.

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When you target the Hispanic market, if you want to be successful, you have to think larger than advertising and marketing. It is imperative to understand that airing a Spanish spot on Spanish language TV is like an invitation to Spanish-speaking consumers to come to your business. And just as you would prepare your home before inviting guests over, so must you prepare your business to receive your Spanish-speaking customers.

With that in mind, before implementing a Spanish language marketing effort, examine your business to ensure that your operational infrastructure is as finely tuned to Spanish-speaking customers as your messaging is.

There are two key aspects of operational readiness: “Latino-readiness” and “Latino-friendliness”. They are equally important to maximize sales and customer satisfaction.

“Latino-readiness”

Being Latino-ready means examining your business and making adjustments to serve your Spanish-speaking customers from an operational and infrastructure standpoint.

Latino-readiness is a function of your business, not necessarily of your employees. In other words, it is a commitment on the part of the company, not the individual. Latino-readiness involves investments that are made in order to allow Latinos to easily and comfortably do business with your company. The following section highlights many of the touchpoints that businesses must consider to create a comprehensive Latino-readiness strategy.

• Staffing: This is the first and most important step to serving Spanish-speaking customers. While it is possible to grow your sales without having Spanish-speaking staff members, your sales will grow much more rapidly if you have associates who speak their language. Your entire staff doesn’t have to be bilingual, but you do need a bilingual team and a system for your non-Spanish speaking staff to handle Hispanic customers. Don’t put your non-Spanish-speaking staff in the position of wondering how best to work with a Hispanic customer who speaks little or no English. An example of a simple, but effective system is a program McDonald Marketing developed for client Mattress Firm, the largest Mattress retailer in the United States. For their Hispanic pilot program in Phoenix, a system was needed for effectively handling Hispanic customers, because Mattress Firm had fewer than a dozen bilingual salespeople out of 100 associates in the market. We developed a system which fully utilized these bilingual salespeople by having them assist with sales for stores other than the ones in which they were physically working. Because their associates work on commission compensation plans had to be adjusted so that commissions would be split among the sales team making the sale. This was not only fair, but motivated both the Spanish-speaking and non-Spanish speaking associates to work together to build sales and consequently, their incomes. The result was that salespeople in different stores collaborated to make sure a customer didn’t walk out the door due to a language barrier.

• Signage: It’s imperative to view your business through the “lens” of a Spanish-speaker. Examine your business to determine places where bilingual signage makes sense. Simple things like “Bienvenidos” (“Welcome”) on your front door signals consumers that they are welcome there. It sends an inviting, warm message that lets the Hispanic consumer know that their business is valued. It’s also important to have hours of operation, key policies and customer service information in Spanish. Navigational signage, which helps consumers navigate your store or business, is even more important.

• Bilingual materials: Do you have marketing materials that are readily available to help you sell your product? (A brochure? A website?) Consider having them in a bilingual or Spanish format (as a complement to your English-only materials). We frequently see businesses that have an extensive Spanish-language advertising platform but it’s not supported at a consumer information level, such as a website. This is particularly ironic when ads in Spanish are tagged with a firm’s logo, address and website, thereby driving the Hispanic consumer straight to an English-only website after seeing or hearing an ad in Spanish

Additionally, you may need to augment your marketing materials with different information created specifically for Spanish-speaking consumers. For example, in the financial services industry, it may not be effective to create identical brochures in English and Spanish as the level of financial literacy may vary from one target to another. For Spanish-speakers, it may be more important to start with marketing materials that educate consumers about basic services and gradually lead them into more complex services and products as their familiarity and trust in the brand develops. An example of this is client Woodmen of the World, a renowned life insurance company based in Omaha, Nebraska. Woodmen of the World conducted research among Hispanics and learned that while life insurance and the security it provides are very important to Hispanic families, it was widely misunderstood and there was tremendous confusion about the products and their benefits. Woodmen realized they couldn’t just jump into the market with a Spanish-language advertising campaign to increase sales; they’d have to create an entirely new set of marketing materials that were very basic and designed to explain, step by simple step, exactly how life insurance works and why Woodmen is the best choice for life insurance. They also created an educational seminar in Spanish to be presented at no charge by their Spanish-speaking agents. The purpose of this was to connect with the Hispanic consumer in a low-key, no pressure way to educate and inform them about the need for life insurance.

• Handling Calls in Spanish: In creating a more Latino-ready experience for your Spanish-speaking customers, you must consider the importance of communicating on the phone with them. Handling phone calls in Spanish is a must for any company doing business with Latino customers. Whether it’s to give directions, explain company policies, state hours of operation, order a product or answer product questions, offering Latino callers access to your business in Spanish is a huge step in building credibility as a Latino-ready company.

In order to deliver high quality customer service, a company must understand how to handle a Spanish call differently from an English call.

For instance, an English-speaking caller might want the call to be as short as possible. A Spanish-speaking caller often expects the opposite. Hispanics are more conversational in their communication style and value the time and attention of a customer service rep rather than speed of service. Hispanics also take more time on the phone since they often require more information about a product or service than a non-Hispanic caller. In fact, a Spanish-speaking customer service call can be 50 percent longer, depending on the industry.

Another difference with Hispanic consumers is that calling time volume tends to be earlier, later, and more on the weekends compared to regular weekday calling times (e.g. 9am-5pm). Call centers that want to deliver high quality customer service must consider this and extend or alter hours in order to accommodate Hispanics’ work schedules.

Understanding these customer behaviors and expectations pays off.

86% of customers say they are very likely to purchase a company’s products again after a good call experience.

• Product: Clients may not always have the option of tailoring their product line to the Hispanic consumer segment, but when they are able, it can pay off handsomely. Several companies and brands have recognized this and have carved a niche in this way. For example, Minute Maid, the most well-known American juice brand, created Limonada (limeade) for their Hispanic customers. Why? Because in the United States, we tend to drink lemonade. But in Latin America, particularly Mexico, there is no lemonade – only limeade.

Mattel created Teresa, a Hispanic Barbie doll. Oreos, the best-selling cookie in the world, created dulce de leche Oreos, the only ethnically-inspired flavor of their 44 varieties. Even toothpaste manufacturers are getting into the game: in the U.S., we associate a fresh, clean mouth with a minty feeling. In Latin America, it’s cinnamon or citrus that creates that feeling. So toothpastes are created with citrus and cinnamon flavor to cater to Hispanic familiarity.

An even more pronounced example is a U.S. brand created entirely for the Hispanic market: Pizza Patrón, based in Dallas, Texas. With offerings such as La Patrona (“The Boss”) and La Mexicana (“The Mexican”) and ingredients like jalapeños and chorizo, they are successfully reaching Hispanic consumers and are rapidly expanding across the U.S.

Transcreation, Not Translation

If you can’t tailor your products, don’t despair. More often than not, it’s simply a matter of correctly positioning your product. That’s why it’s so important to not just translate your English materials, but to transcreate them.

Transcreation means to alter a message in English by creating a message in Spanish that communicates the same thing, but in a culturally meaningful way to deliver a similar message. It is almost never a “word for word” translation. An example of this comes from a client in the banking industry: the assignment was to translate the bank’s English brochures. The copy used to market their personal loans stated that loans could be used to ”buy a boat or motorcycle”, but Hispanics as a group don’t spend a lot of money on these types of things. We changed the copy to read ‘buy a computer for their children’s education’ and ‘a family vacation’; Hispanics are very family oriented, so this message was much more relevant.

Woodmen of the World found in their Hispanic consumer research that the most important benefit for families of a deceased loved one was the ability to ship a body back to Latin America for burial. They created marketing materials that specifically mentioned this benefit, a great example of transcreating a message about why life insurance is important to have.

To that end, nothing beats consumer research to identify and learn what’s on your target customers’ minds. Only by conducting Hispanic customer research did Woodmen of the World learn about Hispanics’ desire to have bodies of the deceased transported to Latin America. This was an important insight that could only be uncovered by talking directly with consumers. Taking the time to learn as much as you can about the nuances and differences with your Hispanic target will maximize the return on your investment.

“Latino-friendliness”

Now that you understand the elements of Latino-readiness, let’s examine the basics of Latino-friendliness. Think of it this way: Latino-readiness is Latino consumers’ ease of doing business; Latino-friendliness is their comfort in doing business.

Independent of one another, successful Latino-readiness doesn’t guarantee successful Latino-friendliness, or vice versa. For example, you can invest in Spanish signage, website additions, and staffing… all things that will make the shopping experience easier for your Latino consumers. However, if your staff is rude to your Latino customers, ignores them, or just isn’t helpful to them,… all things that will make the shopping experience less comfortable for your Latino consumers… they are not likely to return or recommend your business to others. Conversely, even if you don’t have the budget or resources to make your business Latino-ready at every consumer touchpoint, you can still create a company that is Latino-friendly. Friendliness is universal, and friendliness costs you nothing.

Providing outstanding customer service is important with all customers, and the Latino customer is no exception. Increasingly, companies in this country are choosing to cater to the Latino market by providing exceptional service in Spanish and focusing more on the customer’s preference of language when doing business. Consequently, Latinos are being courted more and more, and they find themselves able to choose to do business with those who understand and respond to their needs.

Customer service is as important to your business health and future as product development, marketing or sales. Yet so many businesses view customer service as “expensive overhead”. It’s not. Consider these facts:

– Repeat customers spend 33% more than new customers

– It costs 6X more to sell something to a prospect than to sell that same thing to an existing customer

– Referrals among repeat customers are 107% greater than non-customers

Customer service is a strategic competitive advantage. In fact, USA TODAY reported that “CEOs say customer service drives growth” (August 20, 2007). With companies increasingly selling similar products, CEOs said the quality of customer service was often the only differentiator.

For the Latino customer, service is paramount. It trumps price, it trumps location and it can even trump modest quality issues. So let’s explore the key elements of a superior customer service experience for Spanish-speaking and Hispanic consumers.

The Importance of Customer Service to Latinos

|Providing high quality customer |

|service in Spanish will help build |

|brand loyalty. |

Receiving high quality customer service in Spanish is of top importance for the Latino consumer. According to a national study[1] on customer service and brand loyalty by Santiago Solutions Group and Hispanic Teleservices Corporation, Latinos often value Spanish/fully bilingual customer service more than retail location, Spanish advertising, and recommendations from family and friends. For Latinos, relationships, both personal and professional, are central in their life. This value of human interaction naturally carries over when purchasing a product or even requesting information. As a result, when a Latino consumer is attended to with high quality customer service, they easily form a relationship of trust and loyalty with that brand.

Imagine advertising to this consumer and not being able to respond adequately to the demand you have created. Clearly, a company’s Hispanic marketing efforts can immediately lose credibility with the Latino consumer if the business is not equipped to provide high quality customer service in Spanish. Without the ability to communicate with a customer service rep in Spanish, many Latino consumers become frustrated and often change brands/services. For instance, in the wireless category, one in three Hispanics who have had a bad customer service experience have switched providers[2].

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|6 out of 10 Hispanics told an average|

|of seven family members and friends |

|about a positive customer service |

|experience. |

• Make Latinos Your Strongest Brand Advocate: A positive customer experience will trigger positive “word-of-mouth” among Latino consumers. Latinos value the opinions of their friends and relatives when making purchase decisions and will frequently talk about their experiences. In the Customer Service national study[3], 6 out of 10 Hispanics told an average of seven family members and friends about a positive customer service experience.

You can expect the “word-of-mouth” effect with negative customer service as well. Half of Hispanics who have a negative customer service experience tell an average of five friends and family members about the incident. One negative experience can affect the Latino consumer’s brand loyalty and the brand loyalty of their friends and family.

• Understand obstacles Latinos face: Since many Latinos are not as familiar with automated systems and have questions on issues and topics that are less common in the general market, most prefer to speak with a live customer service agent. They will typically not leave a voicemail; rather, they prefer to keep calling back until they get a live person. It is a culture that values “high touch” over “high tech”.

Making your business Latino-ready and Latino-friendly is imperative for incremental sales, now and in the future. The Hispanic population growth is not a fad. Be sure to go beyond simply marketing to Latinos: take a 360° approach and nurture and cultivate your Latino customers, and this strategic and competitive advantage will pay dividends, today and mañana.

Spanish Is Important

The U.S. Hispanic population is divided roughly as follows: 56 percent prefer Spanish as their primary language, and 26% percent are bilingual and 18% are English dominant. This indicates that 82% of the U.S. Latino population speaks Spanish at home. This statistic means that Spanish is the language of their heart, which translates to the language of their wallet.

Speaking to Hispanics in their preferred language will help facilitate the growth of a relationship. Once a Spanish-speaker knows that they can communicate in Spanish, there is a sense of relief and an immediate connection is established. Trust is established and there is comfort in speaking with no concern that communication will be lost in the translation.

Hispanic consumers are much more loyal to companies/products/brands that respect them and talk to them directly in their native language. It is important for Hispanics to feel that they are being treated with respect and are offered the same attention as other customers. It is frustrating for this consumer if there is no one

they can communicate with in their preferred language. Conducting business in Spanish provides a sense of relief and makes the process more comfortable for the Spanish-speaker.

About McDonald Marketing:

McDonald Marketing was formed in 2002 with a single focus: to help clients and companies grow their business by marketing effectively to Hispanic consumers.

With that sole vision, Kelly McDonald started her business as a marketing consultant and speaker, emphasizing market segmentation. Her approach to niche marketing challenges grew the company from a one-woman enterprise to a full-service agency in just over a year. Kelly is a popular speaker on the topic of marketing to Hispanics and marketing to diverse target segments.

In 2007, McDonald Marketing was named one of the “Top 50 Hispanic Ad Agencies in the U.S.” by Advertising Age.

In 2008, Inc Magazine named McDonald Marketing one of the fastest-growing privately owned companies in the country.

The company has also won 7 Telly awards – the television industry’s award for creative excellence in television advertising.

McDonald Marketing is a woman-owned business and is a certified minority business.

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[1] “Customer Service Impact on Consumer Choice, Loyalty, Brand Reputation and Sustainable Growth” by Santiago Solutions Group and Hispanic Teleservice Corporation

[2] “Loyal Hispanic Customers Rely on High Quality Customer Service in Spanish” PR Newswire

[3] “Customer Service Impact on Consumer Choice, Loyalty, Brand Reputation and Sustainable Growth” by Santiago Solutions Group and Hispanic Teleservice Corporation

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A Hispanic customer service call can be 50% longer, depending on the industry.

Hispanics prefer to speak to a live customer service rep rather than an automated system.

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