business opportunities

Latest population estimates by the U.S. Census Bureau at the time of writing, put the U.S. Hispanic population at 42,687,224 or 14.4 percent of the U.S. population. That equates to one person out of every seven in the U.S. being Hispanic. The projection for 2050 is that this will increase to one in four people or 25 percent of the total population.

To put the current Hispanic population into perspective, when looked at in terms of the population of countries in the world, it would rank 29th out of 232 countries. In terms of pure numbers, it ranks higher than Sudan, Spain, Argentina, Kenya, Canada, Australia, and Afghanistan to name a few.

I think we can conclude it’s a pretty substantial market. So, why are more companies in the U.S. not doing more to establish a presence in this market?

Spending Power 

 Let’s not look at population numbers in isolation. What is the spending power of this segment? According to Jeff Humphreys, Director of the Selig Center for Economic Growth at the University of Georgia, the economic clout of Hispanics has risen from $212 billion in 1990 to $798 billion in 2006. That’s 276.4 percent growth from 1990 to 2006. They are forecasting that by 2011, the figure will be almost $1.2 trillion, a growth rate of more than 450 percent from 1990 to 2011. Non-Hispanic buying power is growing closer to a rate of 176 percent over the same period.

According to the Selig Center, in 2011, Hispanics will account for 9.5 percent of all buying power, up from only 5 percent in 1990. Due to brisk growth, Hispanic buying power will essentially equal African American buying power in 2006, and will exceed it in 2007.

If I was a small or home-based business owner selling products or services to consumers, it sounds like a market where I would want to be active!

Overcoming the Issues

So, why have we not been seeing a flurry of activity with companies scrambling to attract the U.S Hispanic market?

In our experience of consulting and training to companies targeting and servicing the U.S. Hispanic market, the hesitation and resistance to proactively target this segment of the U.S. market can be attributed to one or more of the following reasons:

·   Fear of the unknown;

·  Resistance due to the sheer magnitude of the undertaking. There are a multitude of components that comprise your Hispanic marketing and servicing platform, e.g. culturally relevant products/services; Spanish language marketing collateral, customer communication; Spanish language website; Bilingual customer service personnel; bilingual IVR, etc. ; and

·  Lack of resources — human, budget, and time to dedicate to developing a new market.

Techniques to Reach the U.S. Hispanic Market

How can your company and other companies that have faced these and similar issues overcome them? It’s done by using the following marketing techniques:

Research, research and more research! In addition to undertaking primary research specific to your company and its products/services, there is an abundance of secondary research available. Information is power and will enable you to make informed decisions about the direction you should take. For example, what is the best way for me to reach my target market?

Become or assign a U.S. Hispanic market champion within your company to nurture the idea within the organization. In our experience, U.S. Hispanic projects are one of the first to be cut when budgets need to be trimmed. Having a U.S. Hispanic champion on board will help to raise the profile of what you are doing and help build momentum. Once you have built momentum and raised the profile internally, it becomes a little harder and more political to cut. 

Build a compelling business case that clearly shows the potential of this market today, in 5, 10 and 15 years time. There is plenty of data available to help support your business case — a few examples are the U.S. Census Bureau and the Selig Center’s U.S. Hispanic Purchasing Power dataset.

Take the time to do the research and fully understand the U.S. Hispanic market. There is a common misconception that it is one market. The term U.S. Hispanic is a name to refer to people living in the U.S. from any Spanish speaking country. Therefore, U.S. Hispanics herald from 22 different countries, and while there are similarities that exist between the various sub-groups, there are also distinct differences marketers and customer service agents must be sensitive to in order to best serve the interests of specific consumer groups.

Understand your specific target market and how best to communicate with them. Below are just a few of the differences between the U.S. Hispanic market and the general market that you need to be aware of before embarking on U.S. Hispanic marketing campaigns:

·        Research by Simmons Research claims that the average U.S. Hispanic household receives 35 direct mail pieces a year, compared to the 350 English language pieces the average general market household receives.

·        According to the Walters Media Group, 72 percent of Hispanics always read their direct mail, 66 percent respond to it, and 30 percent say they want to receive more! I think you would agree that these figures are a lot higher than they would be for the general market.

·        Research by Forrester Research, Inc. reported that in 2005, Hispanics lagged in both online and broadband adoption with 45 percent of U.S. Hispanics online at least monthly compared to 71 percent for the general market. Only 40 percent of Hispanics had a broadband connection in 2005 compared to 56 percent for the general market. U.S. Hispanics are now embracing the Internet with broadband adoption increasing by a massive 70 percent in 2006. The study also found that U.S. Hispanics were more likely than non-Hispanics to use the Internet for listening to Internet radio or streaming audio, downloading music, or watching Internet or streaming video.

·        Nielsen Media Research reports that 71 percent of Spanish-language TV viewers claim to receive information relating to purchasing decisions from commercials, compared to 30 percent of non-Hispanics watching English-language TV.   

Be realistic and up-front about the magnitude of the undertaking. Not only is there substantial cost in marketing to this segment, but having the infrastructure in place to service this segment should not be underestimated. Before you go out and proactively target the U.S. Hispanic market, make sure that you have a bilingual customer service infrastructure in place. Companies that practice “Best Practice” U.S. Hispanic customer care do the following:

·        Test the Spanish/English language proficiency of all bilingual staff you intend to have interacting with Spanish speaking customers.

·        Undertake training for bilingual staff in Spanish. Many companies provide training in English, and then tell training course participants to “now go and say the same in Spanish to Spanish-speaking customers.”

·        Utilize the services of Hispanic market experts. Companies specializing in one or more of the following fields: research, advertising, marketing, training and recruitment can be invaluable resources in helping you to “get it right the first time”. Professionals in these fields also have knowledge about what has been attempted in the past and has not worked.

In summary, there is no doubt that this is a very real opportunity for companies prepared to invest in developing a U.S. Hispanic market strategy. As we get nearer to the 2010 census, there will be more and more hype about this segment of the U.S. market. Small and home-based companies willing to put forth the effort now in their U.S. Hispanic market strategy and customer service infrastructure will be well positioned to reap the rewards while competitors are scurrying and trying to decide how to capture and service this very lucrative segment of the market. HBM

 Tony Malaghan brings over 27 years of professional experience in marketing to Arial International’s management team. He has a Bachelor of Business Studies with a major in Marketing from Massey University. Since joining Arial International in 2001, Tony’s focus has been on U.S. Hispanic marketing projects. For more information on how Arial International can assist you with your U.S. Hispanic market initiatives, visit our website at www.arialinternational.com, call toll-free 888.446.2331 or e-mail us at

 Previously published in the August 2007 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit www.homebusinessmag.com

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