6 Reasons Corporate America Misses Out on Trillions of Hispanic Dollars
How businesses can target one of the fastest-growing markets in America.
America is changing and becoming more multicultural. A big part of that has been due to the Hispanic market. They are not just a sub-segment of our economy anymore. They have become a powerhouse of economic and political influence. Their purchasing power of over $1.5 trillion is larger than the GDP of Mexico, which is considered one of the top 10 economies in the world.
If corporate America wants to strive for business success, it is time to reevaluate our marketing budgets and efforts to cater to this flourishing market.
Many times the excuse I receive from marketing executives for not addressing this market is that they do not have a budget for a separate Hispanic market initiative, or their current budget is not big enough to justify an ongoing investment.
Just because your company may not be performing well in the general market doesn't mean you can't excel in the Hispanic market.
If you want your business to succeed and attain a steady growth in the years to come, you must reallocate your marketing budget to areas or markets you haven't reached before. Consumers are becoming more diverse and multicultural. This means your marketing approach needs to do the same. You must engage with consumers in more meaningful and culturally relevant way if you want to truly connect with them.
According to the report from Geoscape American Marketscape DataStream, minorities will constitute 80 percent of U.S. population growth between 2015 and 2020. Hispanics will represent 50.6 percent of that figure.
What does this translate to you?
Some marketing executives think it means more work on top of what they already have. That way of thinking is costing millions of dollars in lost revenue because their marketing departments are not responding to current market trends or to their consumer's demands. All thoughts of initiating a Hispanic marketing approach are swept under the rug.
For others, it translates to opportunities to sell more product or services. To set themselves apart from their competitors and in many cases, to become a leader and pioneer in their industry by embracing a market that is one of the fastest-growing demographics in the USA.
The new America is not just a one-color nation requiring one marketing approach for everyone. We are a melting pot of different colors, nationalities, and cultures. Just look at the free market research or articles in major publications on the Internet. They will give you a sense and a macro point of view of how industries and markets are evolving. Instead of excluding and isolating, we must include and embrace if we really want sales growth and success in any organization.
Here are 6 reasons why corporate America falls short with their Hispanic market approach:
- They don't understand their audience. In the corporate world, there is still a misconception that since the growth of the Hispanic market comes from U.S.-born Hispanics they are culturally assimilating to the American way. So executives think their "one strategy, one message, one language" approach is good enough to reach this market. This is absolutely false. The more acculturated Hispanics are, the use of English language in your messaging is appropriate. However, whether you use English or Spanish, your execution must reflect their culture, heritage, and needs to assure brand engagement.
- Cultural relevancy is key. Whether they are U.S. born or foreign born, Hispanics don't want to be sold. They want brands to embrace their cultural relevancy. So, your campaigns have to be created for and targeted to them with messages that truly speak to their needs. Only then will you achieve the level of brand engagement that generates greater return on investment and delivers the results you want. Whether you use English or Spanish, it must be culturally relevant.
- Testing the waters. Many companies tend to test the waters first instead of embracing the effort and getting a real taste of what this audience can deliver to their bottom-line. It is good to start slow, but you need to be committed to an ongoing effort. If you are running an ad campaign for a couple of weeks in different Hispanic media to see who you are getting more responses from, you are basically throwing your money away. You have to be consistent if you truly want to penetrate this market the same way you are doing for the general market. Allocate a reasonable budget by carving your general marketing budget. Build and develop a strong foundation and you will have an ongoing revenue source.
- Translations vs Trans-creations. Translations could work for specific things such as a simple collateral piece or product label, for example. However, a straight translation lacks cultural relevancy. If you are translating a message that has been created for the general market, not Hispanics, you are falling short with your execution and approach. The most effective way to engage with Hispanics is by the "trans-creation" of the campaign. This means, create a campaign message that appeals to Hispanic core values, yet still respects the overall strategy and branding position from the general market campaign.
- Supporting the community is not good enough. For some companies, community outreach is their overall Hispanic market effort for they year--whether they sponsor some Hispanic events or become a partner of a Hispanic non-profit organization by paying an annual trustee membership. In many cases, executives think that because of the mission of these non-profit organizations, they are reaching their customers in those specific DMAs across the nation. This is not necessarily true. It is important to sponsor events and support these organizations. However, community outreach should act as a support of your ongoing Hispanic marketing efforts, not as your annual Hispanic initiative. If you look at your overall Hispanic market DMA and you compare it with the amount of members of these non-profit organizations, you will realize that you are only reaching to a small percentage of your audience, not your overall target audience.
- Getting the right help. Having a strong consultant or Hispanic marketing firm that understands Hispanic culture is key to your success. They will bring smart, effective solutions to help you engage and genuinely connect with this market. Having people on your team who speak Spanish does not necessarily mean they know how to connect with this audience. I have seen the frustration of many chief marketing officers who were using their own Hispanic employees to translate their marketing materials and it was not producing good results. Plus, they had many errors throughout their marketing materials. Cutting corners will hurt your business and your end result.
The success of a business will be defined by how well companies market their products and services to all groups, not just "the general market." It will also depend on how open-minded executives are to reacting to market challenges and trends.
It is estimated that by 2020 the Hispanic purchasing power will reach $1.7 trillion. The question you need to ask yourself is: how much revenue are you leaving on the table by not engaging with this influential audience?
Entrepreneur Leadership Network Writer