Seven Reasons (“Excuses”) Not to Leverage the Hispanic Market for Growth and How to Get Past Them

by Terry Soto, Author and President of About Marketing Solutions, Inc.

  1. It’s unfamiliar to us; we don’t know anything about Hispanics.

Our organizations have very sharp and astute research and insights folks whose job it is to identify and understand segments which could represent growth opportunities for our companies. With some guidance they are in a perfect position to validate, size and provide insights on how to best attract and retain that Hispanic target segment that can bring incremental growth to your company.

Solutions: 1) Scan the internet for every credible research resource on the Hispanic market. I recommend the U.S. Census, Pew Hispanic Center Reports, Bureau of Labor Statistics, the annual Hispanic Fact Pack to get you started. 2) Reach out to vendor partners and ask the questions you’d like answered about the market and the segments which are relevant to your products. I recommend contacting AC Nielsen, Simmons, Spectra, Scarborough, and Yankelovich for relevant market views. 3) Search the online archives of your industry’s trade publications and associations and search Hispanics or Latinos, you’d be surprised how many articles and relevant insights you will find. 4) Include credible magazines and newspapers like Forbes, Newsweek, and The Wall Street Journal in your insights search. Note: Articles should be used as directional insights which must be validated. 5) Purchase current category analysis reports published by Mintel and Packaged Facts. They are based on existing secondary data like Simmons and interviews with subject matter experts and for $2,000 to $3,000 these reports can save you lots of time and money and will provide broad overviews of Hispanic consumer behavior across a variety of categories.

  1. It’s a complex market. There are so many nationalities and dialects.

Yes, it is complex, but it is no more complex than understanding and developing strategy for the other 260 million people in the US. who live in different regions in the country, have different cultural influencers and even have different dialects and accents, yet we manage to target them just fine. The good news is the Hispanic market is no different. They may come from different countries and have different dialects, but there is a common dialect of English and Spanish that is understood by all and they respond to marketing messages that speak to their needs just like everybody else.

Solutions: 1) Don’t get mired in the complexity of nationalities and dialects prematurely because not all Hispanics are your target market. 2) Identify the commonalities and differences in category purchase drivers for your products or services between Hispanics and your current customer target. 3) Determine which Hispanic segment is actually purchasing the greatest volume of your products and services or is buying them most frequently. And determine if that segment is Spanish-dependent or is bilingual or English dominant. About 70% of the Hispanic market understands and can speak at least some English, so dialect may be a non-issue among high potential Hispanic users of your products and services. 4) Your high potential Hispanic targets may speak English, but you will still need to align your communication to their attitudes and values, 5) Define where your high potential target is concentrated geographically vis-à-vis your trade area. Over 2/3 of Hispanics are Mexican and they are concentrated in certain states as are Caribbean, Central American and South American Hispanics. Once you have a clear picture of the market, your Hispanic target and where it’s concentrated, you will see it is not so complex after all.

  1. It’s costly and we barely have the budget to do what we need to do now.

I would argue that it’s costly and inefficient not to integrate your high potential Hispanic segment as part of your target market. Do you know what it costs you not to effectively attract sales to your company from the Hispanic segment? Do you know that even though Hispanics represent 12% of HH’s they represented 47% of the growth in consumer spending across categories in 2010? How much business growth are you leaving on the table? Do you know what it is costing you to innovate and deploy products, services and programs that are relevant and effective to only a portion of all potential consumers? I would argue that in most cases integrating Hispanics as part of your core target market maximizes your current investments, produces incremental growth and often times only minimally adds to cost.

Solutions: Now that you know which Hispanic segment of the market holds greatest potential for your company, determine a few key numbers which will help put budget allocation into perspective. 1) The size of the high potential Hispanic segment or segments overall and in specific trade areas, 2) the proportion of the market in your trade areas or footprint and the value of their consumption in your category, 3) your company’s market share of high potential Hispanic segments in your trade areas and the value of their consumption, 4) the gap between your existing market share and their consumption and high potential Hispanics’ concentration and spend in your category in your trade areas, 5) the value of the gap in year one and in subsequent years, 6) the value of possible attrition of your existing Hispanic customers due to under-optimized ability to deliver and provide satisfaction in a relevant manner.

  1. I’m not sure, but I think somebody’s working on that. It’s not my area.

I think we can all agree that we all share some part of the responsibility for developing, distributing, merchandising, marketing and selling our products to our end customers. So it stands to reason, that if a new target segment has the potential to offer our companies growth, optimizing these various areas to successfully attract their business would become our respective responsibilities. I would argue that identifying, validating and ultimately, if it makes sense integrating the Hispanic market into our strategies is everybody’s job.

best deals on dog food

style=”font-family: Arial Narrow,serif;”>Solutions: 1) Now that you understand the value of your high potential Hispanic segment, make sure key stakeholders understand what is at stake for the company’s growth goals and how that translates in their respective areas. 2) Speak to the importance of taking a total market approach in order to capture the total market’s full buying potential, 3) Emphasize the importance of optimizing company strategies to maximize results, 4) Emphasize opportunity loss due to shifting market demographics including aging non-Hispanic population, changing demographics in key trade areas and negative impact on growth results and goals.

  1. We have so many initiatives and priorities so right now is not a good time.

The fact that you have so many initiatives going on at the same time is a wonderful thing. In most cases, it means business is good. But ask yourselves, how much more effective would those initiatives be if you optimized them to generate even more sales? The reason we get stopped when we think about pursuing a new market in the midst of all we have to accomplish is due to many of the reasons we’ve discussed in points 1-4. But if we think about it, being too busy is just not a good excuse. You’re basically stating that you don’t have time to figure out how to leverage the Hispanic market to make your company grow because you’re trying to figure out how to make your company grow. Think about it.

Solutions: Integrating Hispanics as an initiative’s target segment means the right Hispanic segment becomes part of the total target segment as part of the same effort with the same resources and the same budget. It requires a mind shift to automatically include the right Hispanic target from the beginning, but it is the only way to maximize business results. Here are are the steps I recommend:1) Consider the total target segment including Hispanics in every initiative’s opportunity assessment process, 2) develop the plan with total target insights in mind, 3) coordinate and align the front and back end operations to be relevant among the initiative’s total target segment and, 4) Implement the plan so the total target receives it, has access, is satisfied and becomes loyal to you.

  1. I simply don’t see the need to adapt the way we do business to target this market.

The truth is that consumer markets are changing and evolving constantly and it is our ability to change with them or even ahead of them that allows us to maintain our success and achieve growth. We change and adapt our products and our go to market approaches constantly. We have national, regional and local strategies so we can adapt to our customers different needs and expectations. Well adapting to the growth and needs of the Hispanic market in our trade areas has also become a necessity for many of us. Your company’s continued growth depends on it. Don’t make the mistake of the retailer which launched a multimillion dollar initiative to take back California where it is losing market share and Hispanics were nowhere on their radar. I wonder if they know California is 40% Hispanic.

Solutions: To understand the demographic and cultural change our country has been going through and the coordination and alignment work that might be required of your company’s go to market approach, you need to step outside and get on the ground floor. 1) Step out of your offices and go into the markets experiencing the greatest changes, 2) visit and speak to your sales organization and/or speak with your store or branch managers about the changes they see and the tools they need to continue being successful, 3) watch for the mix of cultures and languages spoken by your new customer base, 4) watch how multicultural consumers behave, how they shop for your products and services and think of the implications, 5) watch who they shop with, 6) watch how they interact amongst themselves and with your sales people, 7) observe the relevance of your store environment, including product and service skews, merchandising, POP, staffing, literature, digital screens, kiosks, and everything else you consider critical to the customer experience and to sales generation.

  1. I’m not sure we should be targeting this market. Aren’t they illegals?

We’re all entitled to our personal, philosophical and political views on our personal time, but in our companies and in our areas of responsibility, we are rewarded for profitable growth. Achieving growth requires that we educate our game before making unfounded blanket statements and it requires that we think and make decisions with the business goals of our organizations in mind. For starters, consider that not all Latinos in the United States are recently arrived. Some families have been here for five generations. In the state of New Mexico, Hispanics can trace their roots in the Southwest back several hundred years. The Census indicates that 2/3 of Hispanics are U.S. natives while only one third are immigrants. Of the 20 million Hispanic immigrant population, the Census estimates 11.2% are illegal or just over 2 million.

Solutions: 1) Leverage credible and factual sources of information like those I reference in reason #1, solution #1 and I would add Center for Immigration Studies and the 2010 American Community Survey (ACS) and the March 2011 Current Population Survey (CPS). 2) Stay open to the fact that without addressing the Hispanic population in most U.S. geographies, future growth will slow and even come to a halt for many industries.

Overcoming these perceived obstacles and applying these solutions and others will depend on our ability to focus on what is best for our businesses, on organizing to define and validate the Hispanic market opportunity, and on taking action to optimize our strategies, organizations and infrastructures so we can continue to produce growth for our organizations well into the future.