Financial service providers have a tremendous opportunity to gain market share by marketing to Hispanic American consumers. According to the Pew Research Center, “Multicultural groups accounted for 91.7% of the nation’s population growth over the past decade.” Hispanics were the fastest-growing segment of the American population, accounting for 57% of the growth, yet Hispanic American consumers are drastically underserved and under-marketed by the financial services industry. There is a great opportunity to service these strong, powerful consumers if you understand where and how to reach them.
Direct mail is an effective tool when targeting this market. Here are four recommendations that will help you successfully reach diverse Hispanic consumers at the right time with the right offer:
1. Market Segmentation
Hispanic consumer segmentation differs from the general market segmentation as it goes beyond creating a subset from your overall market based on demographics. As I stated in my previous blog, translation alone is not enough, and a straight conversion from English to Spanish will miss subtle nuances in Spanish language variation and cultural expression. Even though the Hispanic community is often thought of as a single group, it is made up of many diverse segments and represented by various nationalities. There are more than 20 different Spanish-speaking countries in the world, each of which are represented in the United States. In addition, in the United States, multiple waves of immigration have resulted in a community with a diverse economic, demographic, and generational profile. Therefore, to accurately target Hispanic consumers, you need to take into account acculturation/generational status, language preference, and country of origin when planning your direct mail campaigns.
2. Focused Strategy
According to Forbes, with the Hispanic community in America “having an annual purchasing power of over $1.5 trillion, they’re undoubtedly a powerhouse community.” However, because the economic status of the Hispanic segments you are targeting will vary, you need to know which financial products and services are best suited to each segment. Your message should be anchored in data relating to the financial habits and aspirations of your specific target audience. The insights gained through strategic data analysis can assist in deciding which products are a good fit and how to shape your creative work effectively.
3. Accurate Data and Clean Mailing Lists
Good data is critical for any campaign’s success, and this is even more essential when marketing to Hispanic Americans. For example, a Raddon report developed for the financial brand in 2018 found that 69% of Hispanic consumers believe it is necessary for financial service providers to dispense personalized service and know them as individuals. Therefore, it is essential to send a highly personalized message and offer to each direct mail recipient. Data hygiene and data scrubbing are also crucial steps to ensure that the information you have is correct, and you are not mailing your personalized message to an incorrect recipient, or to a person who will never receive it because they have moved.
4. Culturally Relevant Creative and Copy
Understanding Hispanic consumer attitudes toward different financial services such as personal banking, investing, and borrowing are key. This will provide important insights into the motivations and beliefs of each community you are targeting. Use this knowledge to craft your message and offer. Successful direct mail campaigns require a deep understanding of the diverse cultural context of their target audience. For instance, those Hispanic Americans with a Mexican heritage will have different customs and traditions than those with a Caribbean background. However, one similarity across all Hispanic American consumers is that family, culture, and community are among the most essential aspects of life. Harness these insights to drive culturally relevant messaging and imagery, and don’t forget to test. A simple A/B split or more complex multivariate testing will help you understand how each direct mail package performs in the marketplace. Testing also provides the foundation to build a successful mail rotation that will prevent audience fatigue. Do your research, utilize data, personalize your message, and mail to a clean list in order to gain the trust and business of these consumers who are currently an underserved market for most financial services providers.
Some of the biggest financial services providers are dedicated to reaching Hispanic consumers, but many still are not. In such a competitive environment, the rest of the industry won’t just sit back and watch a select few support the entire U.S. Hispanic market. If you need help reaching Hispanic consumers, turn to the experts at IWCO Direct. Contact us—we are here to help.