February 20, 2017
By Sandra Diaz
Trump’s battle with Mexican President Peña Nieto over The Wall has once again brought to light Americans’ passionate feelings on both sides of the issue. While only two-thirds of U.S. Hispanics are of Mexican descent, the feud reveals a general anti-immigrant, anti-globalization sentiment.
In the face of this kind of polarization, CMOs need to deal with two questions:
1. Are the rewards of Hispanic-focused initiatives worth the risk?
2. How can we avoid backlash by those who see catering to Hispanics as un-American?
The answer to the first question involves thinking about engaging Hispanics as another opportunity to deliver personalization and looking at returns obtained by other companies.
We live in an era in which data and technology is driving demand for tailored offerings. As the world’s 19th largest consumer market with $1.3 trillion buying power and shared unique needs, U.S. Hispanics represent an attractive target for mass customization. They make up a quarter of the population in the Top 15 U.S. markets – those which any national brand must win to drive significant sales volumes. And contrary to a commonly held belief, most Hispanics are not undocumented immigrants – excluding the children of at least one undocumented parent, 80% of Hispanics are U.S. citizens or legal residents.
Furthermore, Hispanic initiatives offer a proven financial return. An Association of Hispanic Advertisers (AHAA) analysis of published financial revenue data and Nielsen ad spending for 39 CPG and retail firms found that the share of overall marketing resources dedicated to the Hispanic segment explained about one-third of their overall revenue growth.
The answer to the second question lies in a shift in how companies are going about engaging U.S. Hispanics. Brands must stop focusing on in-language messaging, niche offerings and culture-driven entertainment, and start tapping the nuances in how culturally diverse consumers engage with their mainstream items, communications and touch points.
Here are five practical ways for CMOs to make the shift:
1. Address unique needs not driven by language. Hispanics may not be taking full advantage of a brand’s offering because they lack of experience with it or its category due to historical exclusion or growing up in an immigrant family. Genetic-driven differences such as darker hair and skin tones, or petite body type impact what they buy. And, Hispanics are heavier consumers of certain mainstream products and services, such as rice, family-sized items or travel abroad, based on their background and heritage.
2. Optimize channel presentation to feature mainstream items with high Hispanic appeal. While there is a role for targeted items, Hispanics primarily buy well-known brands. But, as outlined above, they may not buy the same specific items inside a line vs. non-Hispanic shoppers. Have you ever walked away from buying pants or shoes because they did not have your size? Hispanic shoppers are more likely to have that type of experience, and it goes beyond the apparel category. By creating planograms, displays, signage and website features that showcase the Hispanic top sellers that also are best sellers among non-Hispanics, everyone will find what they want. That approach is way more powerful for driving sales and shopper satisfaction than bilingual packaging or messages.
3. Design store adjacencies to avoid segregation and maximize profits. Where targeted items can add value, as in the case of selling Hispanic food items, merchandise by category rather than in a separate ethnic section. Debunk also the myth that Hispanics only buy low-priced items. Especially in the case of food, Hispanics will pay a premium to satisfy their cravings.
4. Deliver culturally competent selling and customer support. Remember heritage impacts people’s ideas about authority, family responsibilities and politeness. Even if they only speak English, Hispanics may still hold themselves to certain cultural expectations. For example, a financial advisor working with a Hispanic client must verify whether his or her budget includes caring for a family member – even if she or he is second or third generation and college-educated. Check if customer support metrics (such as call length) vary for Hispanics vs. non-Hispanics and adjust service protocols and performance expectations accordingly.
5. Cultivate a diversity mindset among all employees. Most Americans personal networks only include people of their same race or ethnicity. Thus, employees may lack the personal experiences of diversity required to organically serve Hispanics and other customers that are not like them. Having a human resources diversity office, Hispanic marketing function and employee resource groups (ERGs) provides leadership for addressing the needs of Hispanics and other under-represented groups of employees and customers. However, those experts must prioritize helping everyone see how their background and experiences apply to meeting unique Hispanic needs. Otherwise, organizations risk creating Hispanic silos that prevent them from being relevant to Hispanics at every touch point.
Notice each of these ideas caters to unique Hispanic needs, rather than focusing on common human truths. However, they are executed inclusively – as Hispanic nuances are addressed in the mainstream offering and process rather than in separate targeted initiatives.
By changing how they approach Hispanic initiatives, brands can navigate the anti-immigrant sentiment to reap the proven rewards from personalizing their offering for Hispanics.