Outside Insights | July 2011 | By Guest Author

What Not to Do When Marketing to Hispanics

Too often, companies fall into these six traps with their marketing efforts to the Hispanic consumer base.

Marketing to Hispanic consumers must be a top priority for today's businesses.
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Companies today are where they were in the 1980s—at an impasse of how to capitalize on Hispanic consumers. This time, however, companies are struggling to grow an existing Hispanic customer base rather than capture it. Among factors in play are contradicting data espoused by outside influences; a more sophisticated, widespread, less language-based consumer; a shortage of well-trained, executive-level talent; and company executives unwilling to break from traditional approaches.

If companies continue to focus only on external advertising and marketing tactics, they will miss on improving sales revenue, market share, and profitability margin because of their existing organizational inefficiencies and flawed ethnic-markets philosophy.

Companies must organize themselves internally to better identify, lead, and direct both internal and external efforts to best meet the needs of Hispanic consumers. Those who do not will allow their more savvy competitors to bypass them in winning Hispanic consumers’ hearts and wallets.

Here are a few common strategic and operational missteps made by companies in their Hispanic consumer efforts.

1. Most big ideas are small.

Big ideas, as they relate to Hispanic initiatives, are mainly focused on external assets that have not changed much over the past 25 years. Big ideas have not addressed opportunities related to distribution channel expansion, innovation, communication optimization, organizational and reporting structures, global integration, and other avenues that can significantly impact growth and profitability. Given the pressures on corporate bottom-line delivery, the inability to measure the business effect of expenditures creates vulnerability in the long-term viability of ethnic initiatives.

Make sure your Hispanic initiatives are big ideas that are understood and supported by the C-suite, not just marketing opportunities and advertising campaigns.

2. Companies allow individual brands to drive multicultural initiatives.

Following this philosophy produces dozens of stand-alone campaigns within a company that make it near impossible for board and C-level executives to support and understand, and keeps valuable information at the mid-management level. The results of this brand-driven structure are leadership follows rather than leads, and ethnic-market opportunities are realized in a sporadic and opportunistic manner.

Relevant brands should follow a plan to grow Hispanic sales revenue and profitability company-wide; they shouldn’t seek to generate brand-specific bumps in revenue and market share.

3. Multicultural positions become dead-end jobs and do not attract or retain the best talent.

Current and former heads of multicultural (Hispanic) marketing we’ve interviewed believe they must move out of multicultural marketing and into other divisions to receive the exposure, credibility, and training to advance their careers. They also believe that the best talent does not seek multicultural roles because it will stagnate their career goals.

The most significant finding is that multicultural heads are usually internal salespeople maintaining traditional efforts instead of valuable executives focused on strengthening and expanding relationships to meet long-term growth plans.

Your multicultural personnel should spend a majority of their time deepening and expanding relationships with distribution channels and Hispanic consumers.

Your multicultural personnel should spend a majority of their time deepening and expanding relationships with distribution channels and Hispanic consumers, and should not be too busy selling their value internally.

4. Domestic and international divisions do not help each other.

Companies’ international divisions are not consulted during short- and long-term U.S. planning to share knowledge, maximize assets, increase efficiency with spending, and define mutually beneficial strategies to be relevant with foreign-born U.S. consumers, especially among Latin American countries.

Find out the differences and similarities between your U.S. and Latin American consumers, and utilize that to save money and increase sales.

5. Companies simplify while partners complicate.

Companies continue to follow stereotypes and rely on few internal personnel and many external partners to develop their ethnic-market growth strategies. Meanwhile, in the general market, leadership relies on a much wider group of well-trained internal divisions and executives, as well as traditional consultancies to identify growth opportunities.  

You should develop the same bench strength to attack ethnic marketing as you do across your other divisions.

6. Research is plentiful, insights are limited or stereotypical.

Research is mistaken for insights far too often. As U.S. Hispanics evolve from a passive, minority status to an aware and self-confident consumer force, the evolution is creating generational contradictions in personal and professional beliefs impacting consumer behavior.

Be sure to capture and act upon the most relevant consumer insights to better address the rising ethnic consumer tide.

As you can see, there are significant opportunities to align your thinking and organization to best meet the current and inevitable change in ethnic demographics.

Anthony Eros is the founder of Eros Company LLC and can be contacted at anthony@eroscompany.com.