Hispanics: Reaching and Influencing a Growing Market
In just four decades, the U.S. Hispanic market has more than quadrupled, from 6.9 million potential consumers in 1960 to 35.3 million in 2000. Today there are 38 million U.S. Hispanics, representing 13 percent of the country's population.
The Hispanic population is now the largest ethnic group in the United States, surpassing African-Americans. Hispanic spending power is expected to grow to nearly $1 trillion in five years.
Consider that Hispanic advertising has been growing 15 percent to 20 percent in the past five years. Marketing to 38 million Hispanics is no longer a matter of choice. It has become necessary for survival.
What is the insurance and financial services market doing?
· North Carolina-based Bank of America has increased its commitment to the U.S. Hispanic market in the past few years with specialized services like SafeSend, an ATM card that provides family members in Mexico with fast, easy access to money.
Earlier this year, Bank of America and Yahoo en Espanol announced the launch of a financial services site that offers, in Spanish, information on checking and savings accounts, CDs and mortgages.
· New York Life Insurance Co. launched a Spanish-language Web site at www.newyorklifeenespanol.com. The site helps visitors and policyholders, and the agents who serve them, to access information about the company in Spanish. The education center contains financial information about life insurance needs at various life stages as well as topics such as starting a business, buying a home, getting married or divorced and coping with the death of a family member.
Visitors also can find resources about topics such as tax deferral, paying for education and annuities. The site even contains recruiting materials with information about career opportunities.
· AARP dedicated part of its Web site (www.aarp.org) to Spanish-language visitors. In 2003, 4 million of its 130 million direct mail solicitations were sent to Hispanic seniors, using a bilingual control package that beat the organization's national control effort by 20 percent. AARP found it has plenty of room for expansion, with only 16 percent of U.S. Hispanics older than 50 as members.
AARP also learned a few important lessons through testing. For instance, a "glitzy and hip" mailer didn't work, nor did Spanish-only solicitations. Hispanic seniors frequently rely on children and grandchildren who are better with English to read their mail and help guide transactions.
· Sears, Roebuck & Co. was one of the first credit providers to market credit cards directly to Hispanics, an effort that helped it build a substantial U.S. database of Hispanic consumers. It has found Hispanics to be loyal consumers.
· ICT Group maintains its ICT Spantel teleservices center in Miami. The opening of this larger center three years ago demonstrates the company's "commitment to the Hispanic call center market and reflects an increased client count and revenue."
· State Farm Insurance, Washington Mutual and Allstate Corp. rank 43, 44 and 52, respectively, among Hispanic Business Inc.'s top advertisers cultivating the Hispanic market.
Despite these efforts, only 30 percent of companies in the United States market to Hispanics. That means there's a lot of opportunity out there, folks.
Hispanics tend to be very family oriented, resulting in a close culture and one that is amenable to insurance products. But bundled with their family orientation, Hispanics also feel more heavily burdened. Surveyed Hispanics will be supporting family members at rates sharply higher than the general population, with 53 percent anticipating obligations to children or elderly parents in retirement and 19 percent expecting to have some responsibility for both children and parents. Thirty-one percent will provide financial support to elderly parents or in-laws, compared with 16 percent of the general population.
What's more, 30 percent will provide financial support for children or grandchildren younger than 18, compared with 18 to 20 percent of the general population. Thirty-four percent will be responsible for tuition for a child's education, compared with 19 percent of the general population, according to Allstate's second annual "Retirement Reality Check" survey.
Six percent of Hispanics surveyed think that these obligations to family members will be their biggest expense during retirement. Though not an alarming figure when taken alone, it is three times larger than the general population surveyed, of whom only 2 percent rated family obligations as their biggest retirement expense.
Though Hispanics think that their most important financial goal is to ensure they take care of their families, there is a gap between this belief and their actions. A survey by State Farm Insurance shows that Hispanics put a high priority on things such as saving for their children's college education, with 82 percent naming saving for higher education a primary goal as compared with 42 of the general population.
But while Hispanics want to save for college and leave financial legacies to families, only a small portion take advantage of traditional American practices for building wealth. Their concern has not translated into action.
Bottom line: The Hispanic market is a growing market, rich with opportunities for insurance marketers. Those that recognize the opportunities, that respect and leverage the unique characteristics of the market and that build relationships early on will gain their share of this flourishing market.