This article was published in the Orlando Business Journal
Most of corporate America feels the Hispanic market is not a top priority or a profitable consumer, even though national statistics and research show the exact opposite.
This is due to a misperception of the market and a lack of understanding about this growing and influential consumer. On many occasions, I have encountered executives who still stereotype Hispanic consumers as Mexicans crossing the border who can’t afford their products or services.
Others think they have to launch a special product or service line to cater to Hispanics. And others still believe marketing to Hispanics simply is a language thing rather than an understanding of their culture: They think they have to translate English campaigns into Spanish or they assume that because their target audience is a more acculturated consumer, they already are engaging with them through general market efforts.
This way of thinking is costing corporate America millions of dollars of revenue by not targeting this growing market effectively — but your success depends on it.
Here are examples of such misperceptions:
* The CMO of a national university was concerned about the idea of using Spanish language in advertising campaigns. He thought people would assume the school’s courses were taught in Spanish and that would attract low-income level Hispanics.
* A marketing executive of a national ice cream brand said once his firm launched its guava flavor, then he might consider targeting to Hispanics. He thought Hispanics did not like chocolate, vanilla or any other ice cream flavors.
* A luxury car dealership executive said his company already was engaging the Hispanic audience through its general market efforts. He thought the dealership’s ideal Hispanic consumer was English preferred, had a household income of $75,000-plus and only consumed mainstream media.
Each of these executives was very misguided, and their companies were missing out on a significant amount of business because of it.
According to the article “The Power Partnership: CMO & CIO” from Harvard Business Review, 80 percent of CEOs do not trust or are unimpressed with their CMOs. Also, 74 percent of CMOs believe their jobs don’t allow them to maximize their impact on the business. This troubled relationship explains why CMOs have the highest turnover in an organization.
So if you take these numbers into consideration, there are a lot of obstacles standing in the way of long-term success. If the CMOs are consistently in a panic to perform for their new company, they go straight to the “safe” strategy of bringing on a new agency to rebrand or to create a new campaign concept, hoping and praying that will generate a new boost in sales. When it doesn’t affect their waning sales or fill that gap from the general market, they can blame it on the new agency or the new campaign.
But they aren’t looking at the whole market, the current and predicted trends. They are overlooking the dynamic shift in the minority markets. Although it is one of the fastest growing and financially impactful segments, the Hispanic market is nowhere near their top priority. The statistics are out there to prove this is a viable new revenue stream, yet for many it is simply unfamiliar territory and they feel it’s just not worth their time right now. Misguided perceptions, stereotypes and a general lack of understanding are blocking the path to significant new sales opportunities for these companies.
To ensure you get on track, follow these 4 helpful tips:
1. Understand the market shift and demographic trends: According to Geoscape, by 2020, over half of the U.S. population growth will be attributed to the Hispanic market. Youthful diversity is becoming the counterweight of white aging consumers. The questions you should ask are, “Why are you putting all your eggs into one basket (the general market) while the growth moving forward is driven by minorities, in particular Hispanics? How much additional revenue are you leaving on the table by not targeting this audience?”
2. Start today: Lao Tzu said: “A journey of a thousand miles begins with a single step.” You have to start somewhere. Instead of waiting for the right time, do not make any more excuses. Now is the right time. Take a look at current resources that can be attractive to Hispanics and execute
accordingly. You can start with a pilot campaign and then turn it into a nationwide company effort.
3. Support the effort: You can have the best Hispanic ad agency or marketing consultant to handle your Hispanic market initiative, but if the company executives and leadership are not on board, your initiative will fall short. It has to be a companywide effort, not just a CMO effort. It has to come from the head all the way down. Bring your Hispanic agency or marketing consultant in to start having these dialogues with your shareholders and decision makers. Sometimes it takes an outsider to change people’s perception and see the value of the market.
4. Believe in your team: Many times CMOs or marketing directors become a puppet of their shareholders or board of directors. Let them do the job they have been hired to do. Provide them with the right tools, budget and resources to bring the results you want. Ask them for ingenuity, authenticity, creativity, common sense and best-in-class service. Push them to think outside the box. One size doesn’t fit all. Remember, good things are not cheap and cheap things are not good.
As the U.S. Hispanic population matures, it will become a vital part of mainstream with a strong economic and political influence. Hispanics tend to spend 90 percent of their disposable income. They work hard. They pay taxes and they are getting embedded into mainstream. They are middle to upper class, bilingual, bi-culture and have a higher household income with a higher level of education. Take a good hard look at what obstacles are keeping you from this influential consumer. Start engaging with them today so you can ensure a sustainable growth for your brand in the years to come.