How companies are targeting Hispanics to boost sales
NEW YORK (AP) — 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."
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.
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.
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.