How companies are targeting Hispanics to boost sales

When NxStage Medical Inc. realized Spanish-speaking people made up 15 percent of the market for its home kidney dialysis equipment, the company created a website and brochures printed in Spanish.

NxStage, which started its marketing campaign to Hispanics a year ago, has also increased its staff of Spanish-speaking customer service agents.

“If we’re doing our job in the community, 15 to 20 percent of our growth would come from the Hispanic population,” says Jeff Burbank, CEO of the Lawrence, Massachusetts-based company.

There are about 55 million Hispanics in the U.S., according to the Census Bureau, which reported Hispanics accounted for more than half the U.S. population growth from 2000-10. By 2060, it’s expected there will be 119 million Hispanics, making up nearly 29 percent of the population.

Hispanics also have enormous buying power — $1.4 trillion, according to an estimate by market research company Nielsen. Large companies such as NxStage have taken notice — and so have smaller firms.

Companies are hiring celebrities, such as Sofia Vergara and Eva Longoria, to endorse their products. Some are offering products and services aimed at Hispanics and are creating Facebook pages and Twitter accounts to reach Hispanic customers.

Smart companies go beyond ad campaigns; they’re hiring Hispanic employees, says Cid Wilson, president of the Hispanic Association on Corporate Responsibility, an organization aimed at increasing Hispanic employment in U.S. companies.

“Companies that don’t embrace Hispanic inclusion run the risk of being labeled a company that does not embrace diversity, and they might make a mistake in how they market to our community,” Wilson says.

But some companies haven’t yet gotten the memo that marketing to ethnic groups, including Hispanics, is smart business. In a survey of 150 marketing executives, 55 percent said they didn’t have the support of their CEOs for multicultural marketing programs, and 60 percent said they didn’t have the support of their boards of directors. That has left few marketing dollars allocated to multicultural marketing; only 14 percent said a quarter or more of their budgets are devoted to multicultural marketing. The survey was released by the CMO Council, an association of marketing executives, and Geoscape, a consulting company.

However, sensitivity to the Hispanic population led companies including Macy’s and the Spanish-language TV network Univision to end their relationships with Republican presidential candidate Donald Trump in response to his comments describing some Mexican immigrants as rapists and criminals.

“Hispanics are becoming a force by themselves,” says Jose Torres, a franchising consultant in Coral Gables, Florida. “It would be foolish for any company to ignore that segment of the market.”

SEEING OPPORTUNITIES

When Antonio Swad opened Pizza Pizza in a Hispanic section of Dallas in 1986, he quickly found his inability to speak Spanish made it hard to communicate with customers; his background is Italian and Lebanese. Swad hired Spanish-speaking employees and began serving pizzas with ingredients like chorizo that his customers, many of them Mexican, liked. His business, renamed Pizza Patron, grew as word got around that his store offered good service.

“We were friendly, spoke Spanish and treated you with respect when you came in — it was an untapped market,” Swad says.

In 1988, Swad opened a second store. Today the company has more than 100 locations, mostly in Texas and California. Pizza Patron looks for locations where at least half the population is Hispanic.

UNDERSERVED MARKET

When Gilbert Cerda and Aaron Munoz launched their Los Angeles financial advisory firm, Cerda Munoz Advisors, in 2013, they focused on Hispanics who weren’t being served. Many financial advisers cater to the wealthy and didn’t want to work with Hispanics who didn’t have a minimum net worth, Cerda says.

Hispanics are starting to accumulate sizeable nest eggs, Cerda says.

“Who better to provide the service than someone who speaks the language?” he says.

RECRUITING HISPANIC FRANCHISEES

Many franchise companies recruit franchisees to serve Hispanic customers. Liberty Tax, which operates tax preparation franchises, has gone further, creating SiempreTax, whose target market for services including tax and immigration help is the Hispanic population. It has nearly 60 locations; some Liberty Tax locations are being converted into SiempreTax franchises, says Martha O’Gorman, chief marketing officer.

STRENGTHENING RELATIONSHIPS

Budding Co. is creating pages in Spanish on its website because the number of Hispanic customers for its building products is growing. The company began installing signs in Spanish in its stores in Camp Hill and Horsham, Pennsylvania, in 2009, and created brochures in Spanish after consulting with a community college professor to be sure it was using the right phrasing.

About 20 percent of Budding’s customers are Hispanic business owners, including landscapers, general contractors and masons, says Hoyt Bangs, the company’s website manager. The Hispanic customer base has grown through word-of-mouth advertising that has also helped Budding build a business shipping its products to Mexico.

It takes more than speaking Spanish to sell to Hispanics

Companies that want to sell products and services to Hispanic people need to understand this fast-growing population. Here are some recommendations on how to succeed:

SPEAKING SPANISH ISN’T ENOUGH

Owners contemplating the Hispanic market need to do more than hire Spanish-speaking employees, says Francisco Valle, a consultant in San Diego who helps companies build business with Hispanic customers. And it’s not enough to just include Hispanic actors in commercials or advertisements.

“To go after the Hispanic market, you really need to develop a relationship with them first,” Valle says. He recalls working with a hospital that didn’t have bilingual staffers at the reception desk. Spanish-speaking visitors were directed to a phone where they could reach someone who spoke Spanish. Hispanic visitors didn’t feel welcome, Valle says.

START YOUR AD CAMPAIGN FROM SCRATCH

Advertising campaigns must be created with Hispanics in mind. An English ad translated into Spanish not only may fail to resonate with Hispanics, the translation could be incorrect, Valle says. Marketers also need to understand the nuances in a different language. When Pepsi Cola began using the slogan “Yo sumo” in 2010, intending for it to mean “I count” or “I matter.” Some people read it as saying “I add up,” or “I know how to count.”

EDUCATE YOURSELF

Businesses must recognize there is no single Hispanic culture. Hispanics come to the U.S. from across the Americas, Spain and Spanish-speaking countries in Africa and the Pacific. When new clients walk into the financial advisory firm Cerda Munoz Advisors, co-owner Gilbert Cerda starts a conversation to try to determine where they are from. To assume that someone is from Mexico rather than Cuba, for example, could be offensive, says Cerda, whose firm is in Downey, California.

“Some people don’t like being called Hispanic, some like being called Latino. Some where I come from prefer to be called Mexican,” Cerda says.

But there are similarities across the Hispanic culture, he says. It’s difficult for many Hispanic customers to trust people in the financial services industry, especially after some companies stopped working with investors whose account balances didn’t reach a minimum level. It can take time for Cerda to get clients to open up with him.