Hispanic buying power

01 August 2006,   By ,   0 Comments

Nearly one out of every six U.S. residents will be of Hispanic origin by 2010, according to U.S. Census figures. Hispanic buying power, which was estimated at $736 billion in 2005, is expected to grow to $860 billion in 2007 and $1 trillion in 2010, according to a study by the Selig Center for Economic Growth at the University of Georgia.

Hispanic Latino Community Leaders

Hispanic Latino Community Leaders

“ We have economic power,

we have professionals, we have entrepreneurs,” says Mayela Rosales, whose company produces the UPN show D’Latinos Al Día and a monthly magazine.

So it’s increasingly critical for businesses to bridge the cultural gap if they want to broaden their markets and thrive.

Companies that are not doing anything to target the Hispanic market will have a tough time five or 10 years down the road, says Rosales.

Hispanic-owned businesses that are ignoring the non-Hispanic consumer also are setting themselves up to fail, says Julio Estremera, a business analyst with the Small Business Development Center at Florida Gulf Coast University.

The number of Hispanic-owned businesses grew 31 percent between 1997 and 2002 to nearly 1.6 million, according to a report released in March by the U.S. Census Bureau.

“ It’s not really easy to go out there as a Hispanic business and get that American dollar,” says Estremera, citing language differences as the biggest barrier.

Hispanic business owners must make efforts to reach out to the general population by learning English, or at least having someone on staff who is bilingual, and by networking. “A Hispanic company needs to be able to communicate with the Anglo community,” Rosales says.

It’s vital to identify potential clients, be upfront about the service or product the company provides and communicate in English. Estremera recommends that Hispanic business owners focus on networking by joining chambers of commerce and other industry groups to get the word out. “You have to make personal contacts; you have to be outgoing,” he says.

Do research and have someone on your marketing team to provide insight about advertisements and other ways to reach the non-Hispanic consumer, says David Vargas of The Vargas Group, a business consulting and Web development firm. “You have to understand the market,” he says. “What works in Hispanic countries does not work here.”

Don’t feel as if you have to say you’re a Hispanic-owned business, Vargas adds. If you have a quality product at a good price with strong customer service, people should buy from you regardless of ethnicity. “You just go out and say, ‘Hey I have this product, this is why you should buy it from me,’” he says.

Some non-Hispanic business owners are apprehensive about reaching across the divide because they don’t know what appeals to the Hispanic population and aren’t sure where to go for information. Pedro Pérez, president of Nuevo Advertising Group, based in Sarasota, says Hispanic chambers of commerce, churches and schools provide good opportunities to meet residents.

When creating a marketing campaign, consider tying the product or service to ideas such as family, religion, community and the opportunity to pursue dreams, all of which are important to Hispanic households, says Perez, whose Sarasota-based firm works for clients throughout Florida.

A year ago, Fort Myers-based Synergy Networks started offering clients ads on the Spanish site for Google (www.google.es), and company president Peter Seif expects the service to grow in popularity as more people discover the power of the Hispanic market.

Nearly 80.6 million Internet users are Spanish-speaking, comprising 7.9 percent of the online population, according to Internet World Stats. The number of Spanish-speaking users has grown 229.2 percent from 2000 to 2005, compared with 128 percent growth for English-speaking users during the same period.

Synergy’s Jason Blakeney adds that if a company is advertising in Spanish-language publications or Web sites, it could lose the audience if its own Web site is only in English. “The purpose of a Google ad is to get a client to come to your Web site,” he says.

The most important steps a company should take are to hire at least one person who is bilingual and to have a portion or all of the Web site in Spanish. Then have the capability and infrastructure in place to serve Hispanic customers, from pamphlets and brochures in Spanish to products that meet their needs, says Perez.

Bank of America, for example, has made this a focus nationally by offering brochures and ATM access in Spanish as well as creating products targeted for Hispanic customers. The company has sponsored events through the Southwest Florida Hispanic Chamber of Commerce and made space available for the chamber to have a Naples Welcome Center in its Park Shore branch on Tamiami Trail.The bank also conducts financial literacy workshops for Hispanic residents on the importance of placing their money in a financial institution, and it holds neighborhood diversity days.

Perez says that, by and large, the business community in Florida has had the mindset that the Hispanic market hasn’t been important up to now.

“ Companies are spending millions to advertise overseas when they have a perfectly good client base in their back yard,” he says. “People are starting to realize they need to turn inward and capitalize on these untapped markets they have right here.”