It seems that when companies think about targeting the Hispanic market, they focus their energy on how they can capture their share of the market’s $1 trillion spending power. Their gut reaction is to find ways to generate Hispanic market demand for their products and services. Consequently, companies often call on me to ask, “What is the best way to reach Hispanics?” Or, “How does a company create a culturally relevant ad campaign?” These are great questions, but for most companies, especially those which have just decided to target this marketplace, they are also very premature questions.
Why? Because at this stage, a company has no idea who their target market is, whether their product is a fit with the market, what consumption patterns might be, how large the opportunity might be or whether they currently have the infrastructure to service, satisfy and retain this consumer. So when companies come to me ready to advertise, my advice is for them to take a few steps back and do the groundwork that will help create a strategic foundation that will define their course of action; how they will need to align to market requirements, what that alignment will cost, how they will measure success and how long it will take to see a return on investment.
I argue that setting out to target a new marketplace needs to be as methodical as it might be for any other initiative a company might be considering — it requires a strategic business planning process. The process I propose considers and applies business planning frameworks that aid an understanding of the external environment in which companies will compete for this marketplace and their organization’s ability, readiness and willingness to deliver. If done methodically, Hispanic strategies that result will complement and optimize corporate efficiency, effectiveness and productivity and enable profitable and sustainable Hispanic market growth.
Companies setting out to capture this marketplace must first focus on the process of external and internal assessment. With a focus on the external environment, companies need to be able to answer questions such as:
• Are there regulatory, immigration, foreign trade or other activities that may impact the Hispanic market and must be considered in our planning? This analysis includes intelligence gathering of political, social, cultural, regulatory, legal, international trade and demographic forces that have the potential to impact industry/competitive reaction and activity as well as how it will likely impact consumption and provider choice.
• What are our competitors doing to market to Hispanics? How are their actions likely to impact what we do? You’ll want to explore your industry’s competitive landscape. Are there competitors in the Hispanic market that are not part of our standard set? This includes researching how the industry has evolved, where it is has been and where it is going. How does our company fit in today and how will it fit in the future, and what will be the impact on our business? What must we do to be competitive now and in the future?
• How do Hispanics consume our category and how are they currently meeting their needs in the marketplace? How has our consumer base changed in our trading areas as a result of the Hispanic market presence and growth, and what has been the impact on our business? Given these impacts, what is the likely scenario five years from now for our company if we take action or do not take action? There are many different groups within the U.S. Hispanic market and they are not all your potential customers. You’ll want to identify your Hispanic target — primary and, in some cases, secondary. You’ll want to understand demographic, socio-economic, psychographic and cultural differences and how they compare to your current target market.
The answer to these questions will help you define the potential impacts on your current market strategy, your operations and your organizational structure and help you formulate questions to assess your internal readiness to deliver.
During the internal assessment, attention is turned inwardly to the company itself. It is meant to determine readiness to go after this marketplace. An internal assessment process will help your company determine if there is a fit between your company, its offering and Hispanic consumers’ needs, preferences and behavior. Such an assessment will also help define your company’s ability to deliver relevant value to this consumer. During this process, you must identify aspects of your operations that can be leveraged, identify any gaps and define how to organize to optimize your position. The internal assessment focuses on considering three key business model pillars:
• Strategy: Your value proposition or your offer to your primary consumer, and your profit model;
• Operations: How you need to go to market, including your supply chain, customer service, distribution, technology, human resources, research and development, manufacturing and sales and marketing; and
• Organizational structure: How your infrastructure is set up — hierarchical or flat — by product and service lines, or by functions or customer segments.
My experience has shown that most successful initiatives are those in which a Hispanic strategy aligns with a company’s existing operating model, company direction and strategic priorities. The internal assessment process focuses on identifying ways to deliver relevant value to Hispanics without compromising a company’s business model. Following the external and internal assessment process, you are then ready to start the strategic planning process to develop a strategy and implementation plan; essentially your Hispanic go-to-market strategy. This work takes what you learned from the two assessments and brings your critical issues and barriers to implementation and success to light. You then use these insights to build a unique and sustainable Hispanic market strategy complete with operational plans and metrics that will maximize success potential and create greater value for key stakeholders.
In my work, I see dozens of companies that have entered the marketplace prematurely and are struggling to prove their success to management. By many accounts, companies are rushing into creating Hispanic advertising and promotions. They begin efforts by creating demand before they have organized their companies to service this consumer. They do it without understanding what they are up against competitively. Consequently, companies are baffled by failed attempts to gain, satisfy and retain Hispanic customers. Upon closer examination, the common denominator among most companies facing these disappointments is a lack of upfront cross-functional planning and implementation geared at servicing Hispanics.
It happens something like this: A company advertises an offer and Hispanics respond by calling the store or a customer service number to obtain information. The customer’s first surprise: no Spanish-language customer service, automated or otherwise, to provide the answers Spanish speakers are looking for. If there is a Spanish language automated system, the Spanish-language prompt comes in too late and there are few, if any, bilingual representatives to provide the live support most callers will request.
How do I know this happens? We’ve experienced it first-hand through hundreds of on-site and telephone mystery shopping experiences for major retailers, banks and insurance companies. The customer ends up frustrated, doesn’t obtain the information being sought and decides not to purchase at all, or decides to purchase from the competition. Customers end up canceling their service, returning merchandise and seeking satisfaction in ways that are extremely frustrating to them and very costly to the companies who are targeting them prematurely.
In effect, this consumer is acting no differently than any other, but unlike his English-language counterpart, has no access to the purchase decision-making or customer service information he or she can understand.
Some companies explain that they outsource call center services to India where Spanish cannot be provided. These companies should consider outsourcing Spanish-language calls to call centers in Mexico or other Latin American countries. Yes, it does By many accounts,
companies are rushing
into creating Hispanic
advertising and promotions. They begin efforts by creating demand before they have organized their companies to service this consumer.
require additional consideration and steps, but it’s clearly necessary if a company is going to use advertising to generate demand.
From the examples above, it’s easy to see how advertising and sales promotion campaigns can be quickly neutralized by lack of operational follow-through and alignment. Even worse, some companies have actually concluded that either the advertising was flawed or that Hispanics are unresponsive, uninterested or cannot afford the products and services being offered.
The final impact is felt in the metrics when measurement methods are flawed and don’t consider operational hindrances that have put a damper on sales results, customer satisfaction, repeat purchases and positive word-of-mouth.
The other challenges that must be considered by customer service departments and call centers are the differences in how Hispanic calls need to be handled versus mainstream calls. For instance, the time that is required to handle a call from a Spanish speaker, depending on the industry, can be approximately 50 percent due to greater information needs among Hispanics who are less familiar with a product or service or who are unfamiliar with the process of interacting with a particular type of company. This clearly points to some critical issues that a company must address if they are to be successful with this consumer. It also points to some internal adaptation that must occur in order to integrate this level of service into the operations. Clearly, hiring, training and even cross-training needs must be addressed. In certain industries, compensation structures and performance assessment metrics differ for bilingual call centers.
Additionally, call volume timing among this consumer differs; later and earlier hours and more weekend versus weekday hours are more relevant, so scheduling is impacted. Less familiarity and comfort with automated systems requires simplified cues and greater staffing of Spanish speakers because more Hispanics will want to speak to a live agent. Servicing this consumer also implies different and more extensive scripts that often address issues and topics that are less common in the mainstream market.
For instance, retailers indicate that Hispanics are more likely than non-Hispanics to buy extended warranty coverage for items, but because these programs are seldom explained in Spanish, either verbally or in print, there is tremendous confusion and dissatisfaction with the action required on the part of the consumer when an item needs repair. This situation is then exacerbated if there is a lack of Spanish speakers at the warranty call center or the store to explain the complex terms of the warranty.
Rebates are another area that lack operational follow-through in terms of customer support. Hispanics will often call customer service centers to complain that they have not received their rebate checks, only to discover that the rebate mandated mailing the UPC code along with the rebate form. Some retailers are finding that the knowledge about rebates that is taken for granted among non-Hispanic consumers cannot be assumed among Hispanics. Similar complaints are heard about Hispanic consumers’ lack of familiarity with insurance and banking products, electronics and even packaged goods.
A company’s ability to implement a successful Hispanic market strategy starts with an understanding of how Hispanic customer service needs differ from its current customer base, an understanding of how the company needs to adapt to the market’s needs and requirements, an understanding of what it needs to do to maintain an edge over its competition, and an understanding of its internal operations and the places where change needs to occur. These considerations and alterations are critical to achieving a successful Hispanic customer service strategy. Without them, a company will be hard-pressed to deliver customer satisfaction as part of its value proposition to its Hispanic target. And this is something no amount of advertising can address.
Terry J. Soto, president and CEO of About Marketing Solutions, Inc., (news - alert) is a well-respected voice in Hispanic market entry strategy consulting. Terry works with Fortune 500 companies to improve their chances of Hispanic market success and is the author of numerous articles on Hispanic strategy. Terry lectures on Hispanic Market Strategy at Pepperdine
University’s Graziadio School of Business and Management. To obtain a copy of her book, Marketing to Hispanics: A Strategic Approach To Assessing And Planning Your Initiatives, visit www.aboutmarketingsolutions.com or call 818-842-9688.