Hispanic Online Banking

Many are surprised to discover that Hispanics participate in online banking. Comscore reports that nearly half (47 percent) of Hispanics looked up bank account balances online. And 12 percent paid their bills online, as opposed to 5 percent of non-Hispanics.

Despite these strong numbers, Latino banking activity still has some growing to do. The challenge: according to Simmons, 52% of Hispanics don't have any bank account at all. On the good side, banks can expect $200 billion in new business over the next few years and Hispanics have the least amount of debt of any ethnicity. However, on the negative side, Hispanics are not fully realizing their financial potential and building their credit history. This impedes their ability to secure better financing on homes and new cars in the future.

Several banks and MasterCard have engaged Latinos for years via financial education campaigns to reduce the number of the unbanked. Prepaid cards have recently been introduced as a stepping stone to building credit history. Similar to prepaid phone cards, a concept that Hispanics are intimately familiar with, is a great way to teach them about the product benefits. However, these efforts have been spotty and certainly have not had the same level of push as other initiatives.

Banks should take note, a financial sleeping giant is starting to wake up. Perhaps more aggressive courting of this key demographic can help pull the industry out of its slump?

Spanish-Language as Cultural Relevance?

Many marketers approach their Hispanic marketing like an equation. How many Hispanics are exposed to their message via general market messaging? Then, they discount a specific percentage of spill that is not understood by the target (effective spill). Then they develop complimentary goals in Spanish-language to meet their communication objectives. Lastly, some translate their spot from English to Spanish and others develop original Spanish-language creative.

The problem with this approach is that Hispanic targeting becomes a function of language not of cultural relevance. Sure, those who create original creative targeted to Hispanics in Spanish are getting at the cultural relevance. But what about the Hispanics reached via effective spill? Are they not worthy of targeted, culturally relevant creative in English?

Certainly with limited resources, the lowest hanging fruit is targeting those not appropriately reached via general efforts. Yet, the Hispanic market is rapidly evolving and it's only a matter of time before it shares many traits with the African American market.

Ask any African American marketing agency and they'll tell you the same thing. They have to fight for every penny and explain why simply relying on general market spill is not effective. Clients on the other hand, point to the heavy usage of television and radio (African Americans spend on average 10 more hours with broadcast media per week than non-blacks.) US Born Hispanics spend 13.5 more hours vs. non-Hispanics, so it seems Hispanic agencies will eventual suffer the same level of scrutiny.

Which goes back to the original point - when language is used as a crutch to justify advertising, you forget about a critical and growing segment of the Hispanic market - US Born Hispanics who spend less time consuming media in Spanish.

Multicultural Center of Excellence

During this recession, corporations are likely reevaluating the personnel they appoint to manage their multicultural efforts. Efficiencies influence whether a company designates an internal diversity marketing professional or integrates those duties within the general market. Businesses who value their sales performance should avoid the perils of the latter option.

Employing sophisticated, fully integrated and effective marketing efforts against multicultural consumers requires a center of excellence. A center of excellence (COE) is a person (or team) armed with consumer and cultural insights. The COE understands the benefits that his/her company provides multicultural audiences and can translate those benefits in terms the audience can comprehend. The COE does not translate or adapt general market work exclusively for the sake of integration. He/she does so because that work contains universal truths that transcend culture. And when that work does not translate pan-culturally, the COE makes a case for the development of relevant work. The COE has the power and stature within the organization to influence change. The COE also treats his multicultural agency like a partner and empowers them to do good work; supporting their efforts within his organization. The COE does these things not to stroke his/her own ego, but because it’s right for the business.

Marketers without a multicultural center of excellence will often fail to understand the difference between ethno-centricity/stereotypes and cultural relevance. Bogged down with other priorities, these “integrated” efforts result in a flowchart where diversity is a line item. Creative assets are adapted to minimize resources regardless of whether the creative works or not. Cultural relevance? Who cares, so long as these consumers know the price is $9.99. If creative targeted to these ethnic segments is required by senior management, the marketer responsible for these efforts evaluates the cultural relevance based on the number of stereotypes inserted in a :30 spot. Family with abuelita – check. Sombrero – check. Fast salsa music – check. As for reaching acculturating Hispanics or African Americans – why bother? They are already covered by your general market plans. Who cares if you can customize these efforts to be more persuasive? As for multicultural agencies - they are just annoying vendors. Life would be easier if you only had to work with one agency, right?

No doubt there are companies who hire dedicated multicultural marketing professionals who do bad work. They hired the wrong person. And I’m sure that there are companies out there who do good work without a center of excellence. They got lucky! But by and large, I continue to believe that companies who invest in true multicultural expertise and develop a center of excellence are those who are most successful. Make an assessment of your company or your client’s company. Who manages their multicultural efforts? Is it a center of excellence or is it “integrated?”

Evolving the Television vs. Internet Mindset

The other day I met with a new client to share my thoughts on how they should address young Hispanic women. As we spoke about this Latina's relationship with their beauty product category, I shared a list of prioritized media channels where they could reach her during each phase of the purchase-decision process. Despite this approach, the client insisted we choose between television or internet given their limited resources.

My answer: do both, or don't do either.

More and more data points to the fact that television and internet concurrent usage builds "engagement" with the audience. It allows the brand to associate with relevant content, and then begin an interactive dialogue with the audience online. While TV is great at building familiarity with a massive audience, online is where she shares her opinions on this content. Online also is the key place where she is researching and comparing product benefits and costs.

In this specific case, if the client were to only do one of these channels instead of the other, it would be difficult to see the sales movement they expect. It's not to say that it's always required to do both TV and Internet to reach Hispanic women - that's preposterous and totally dependent on the objectives and the specific target. But we in the Hispanic market also tend to forget that there are other channels in our tool box for reaching Hispanic audiences outside of television. Also, internet is not replacing TV either - the channels fill different needs in our consumer's lives.

It is important to remember that during these tough economic times, that cutting corners in marketing doesn't always pay off.

As mom always says, do your best or don't do anything at all.