Andale, ndale CUs! Hispanic market is calling

WEST PALM BEACH, Fla. - Opportunity is knocking for credit unions and it has a Latin beat. According to the recent 2000 U.S. Census Bureau Current Population Survey, Hispanics are the fastest-growing ethnic group with a 60% increase since 1990. They represent 12.6% of the U.S. population which translates to 32.8 million people. Over the past five years, according to the Association of Hispanic Advertising Agencies, the purchasing power of U.S. Hispanics has risen at a compound annual growth of 7.5% compared to the rest of the U.S. population at only 4.9%. As for actual buying dollars, the Selig Center for Economic Growth at the University of Georgia estimates that Hispanic purchasing power will reach $452 million this year, and in 2050 it will be about $1 trillion. It is clear that this is a group that cannot be ignored despite the hesitancy of some credit union experts to market along ethnic lines. "With the growing buying power of Hispanics, there is a disproportionate under-penetration in terms of the financial services industry and the products offered," said Dr. Aida Levitan, chairperson and chief executive at Publicis Sanchez & Levitan, a Miami-based Hispanic advertising agency. "When you consider that and look at the growth in the Hispanic community, the question becomes why wouldn't you want to target this market?" FISI Madison Credit Union Division Supervisor Bob Vedder agrees. "By the year 2005, Hispanics will represent one-quarter of the U.S. population," said Vedder. "So it is absolutely necessary to separately market to them as a very specialized group and if you don't- then you risk the message being lost." To most effectively spread the CU word and persuade Hispanics to join credit unions, Levitan advises developing a strategic campaign that is culturally relevant to the many segments within the community, using tactics that are relevant to the market and of course speaking to Hispanics in their language of comfort-Spanish. "We do all speak Spanish by the way," said Levitan. "A common misconception is that we don't understand one another. We all speak Spanish, it is just that the dialect may be different." Vedder adds that one of the worst assumptions a credit union can make is that everyone will gravitate toward English and a CU that is resistant to go to that level of change will lose. "It's about putting the member at ease," said Vedder. "Make sure your member service representatives are bilingual, have Spanish brochures available that explain your services clearly and display posters in Spanish so that when they walk into the branch there is that comfort level." It's not just the diversity within the community says Levitan, but other factors such as the sophistication of the geographic location, marital status, gender, age, length of time in the U.S. and education that all come into play when marketing to Hispanics. Vedder adds, that the term Hispanics does not cross all boundaries. "For example, studies show that generally, Cubans have an average $52,000 annual income and are heavy users of credit and Internet banking," said Vedder. "Whereas Mexicans average about $41,000 annually and take great pride in not having any debt so their savings/spending habits revolve around cash. So in this simplistic example obviously your approach has to be different." While acknowledging that each segment has its own characteristics Levitan cautions credit unions against using generalities. "It depends if the Mexican has been here less than five years or if the Mexican is a fourth generation U.S. citizen living in San Antonio," said Levitan. "Did the Cuban just arrive, does the Cuban live in Miami or Chicago? All these factors are vital to a successful campaign and the best way to do all this is to hire a very effective Hispanic marketing agency." That being said, Levitan explains that the community does share certain values such as having a strong concept of family; enjoying activities in a group; finding bright colors appealing; being loyal; being more traditional and respectful of authority; and being less cynical. "For example Faith Popcorn talks about icon toppling which means that the general market doesn't believe in heroes," said Levitan. "This is not true for Hispanics. In our culture our celebrities and heroes are very effective in establishing trust and making that emotional connection so those companies that use them become powerful brands." Even a great creative campaign can be lost if it's not placed in the right media channel and while nothing beats television in terms of reaching the broadest audience it can be too expensive for credit unions. According to both Levitan and Vedder radio can be equally effective, more cost efficient and allows CUs to target specific audiences. For example, a tropical salsa format program on FM will target young people on the go; political Spanish talk shows will reach the older consumer; while a ranchero oriented program will touch consumers from Mexico. As for reaching Hispanics younger than 18 who account for 35.7% of the Hispanic population Levitan suggests also advertising in such magazines as Teen People en Espanol, Latina and any Latin House/ Hip Hop music oriented magazines. "For financial services in particular, public relations is a very important part of the mix. It allows you the credit union to explain in detail, in a credible media how credit unions work and exactly what the benefits are," said Levitan. "So face-to-face contact is best when building brand awareness. Go into the community, sponsor or participate in major events or festivals where your target audience will be. So if you know your SEG celebrates Cinco de Mayo for example, then be there with a booth full of giveaways and drawings in exchange for sharing information about the credit union brand." Research has also shown that direct mailings and the credit union's Web site can also be powerful tools. According to Levitan it can integrate both on and off-line promotions while establishing an exciting data mining position. "For example, incorporate a mini-Web site on your CU's main Web site for campaigns that will encourage your target Hispanic audience to respond with their e-mail and other personal information," said Levitan. "So now you have this database of names to work with for the next campaign." Vedder and Levitan agree that credit unions that take the research seriously and put their marketing dollars behind the Hispanic market will win out in the end. "The worst mistake a credit union can make is thinking that the Hispanic community is monolithic and homogeneous," said Levitan. "And if you think you can market the same way to everyone - prepare for the immediate disconnect of your audience." -mbourjolly @cutimes.com