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