By Glenn Llopis (Forbes)
The Presidential election confirmed the decisive impact that the rapidly changing demographic shift in America is having – in particular that of the Hispanic voter.
According to an analysis by CNN: “Obama crushed Romney among Hispanic voters by a whopping 44 points.” That despite the fact that many Hispanics were disillusioned with Obama as well. It’s just that Romney did an even worse job of reaching out to them.
Those who voted for Romney were overwhelmingly older and white; yet it’s the younger generation and the minority voice whose share of the electorate – just like their share of consumer purchasing power – is rapidly and steadily growing. As one pundit put it the morning after the election, there’s finally a dawning realization that: “Wow, Latinos exist and their vote matters.”
The election awakened us all to the fact that our government leaders and elected officials are just as uneducated as our business leaders are when it comes to connecting with Hispanics – whether as voter or consumer, small business owner or employee. This cultural intelligence gap is severely impeding the rebound of the U.S. economy and America’s return to global competitiveness.
I said as much in my recent article for Harvard Business Review, in which I wrote: “The Presidential candidates’ actions to mislead Hispanic voters has given America’s corporations equal reason to ignore the Hispanic community. For example, many brands that have made unsuccessful and unprofitable attempts to market to Hispanic consumers using inauthentic tactics have now decided to lump Hispanics into what they call “total market” strategies. Unfortunately, this total market strategy approach completely ignores the rapidly-escalating economic impact of Hispanics.”
One problem is that these companies are deprived of diversity in leadership, and therefore lack the imagination, creativity, authenticity and innovation to market to today’s fast growing demographic shift. At 50.5M+ and growing, Hispanics will represent $1.5T in purchasing power by 2015 and 30% of the United States population by 2050. Additionally, Hispanic small businesses are growing at twice the rate of the national average – generating over $350B in annual revenues (that some estimate is closer to $650B). Yet this powerful demographic continues to be ignored by mainstream leadership in business and government. Perhaps this is why Hispanics remain the largest unbanked and uninsured community in America. Imagine the economic impact that Hispanics would have if those who market to them could earn their trust and loyalty.
Armando Azarloza, President of The Axis Agency, sums it up this way: “Most of the time, companies fail to understand theimportance of being culturally relevant because they first-and-foremost have their brand’s interests – rather than Hispanic consumer’s cultural values, preferences and passion points – at heart. When brands formulate appropriate strategies with the latter in-mind, we often see that they are more effective in engaging Hispanics on both an authentic and emotionally compelling level in order to help form more lasting consumer relationships.”
My own conversations with today’s business leaders align with this observation. A senior marketing executive from a Fortune 50 company recently confessed to me: “I am extremely concerned about how my organization’s leadership continues to not see or understand the Hispanic market opportunity. For them, it is just easier to lump Hispanics into our “total market” strategy. The irony is that we index high amongst Hispanics – yet we don’t authentically and effectively service their specific needs. For example, our go-to-market strategies are translated versions of our traditional campaigns. We don’t take the time to understand their culture and how it affects their purchasing tendencies and brand loyalty index. We communicate at Hispanics rather than with them. In sum, we tend to segregate their voices and needs rather than find ways to integrate the mindset of the Hispanic consumer into our entire business strategy. We are losing loyalty from Hispanics every day because we lack the cultural intelligence and diversity in leadership to earn their trust and confidence.”
The lack of Hispanics in key leadership positions in America’s corporations is negatively impacting economic development opportunities that can no longer be ignored – in particular how companies market to Hispanics. Hispanics represent the new workforce, client and consumer – and drive today’s economic development engine. The business case for Hispanic marketing has already been established by population numbers and purchasing power – yet the budgets that are required to earn a sustainable and long-lasting relationship with Hispanic consumers continues to be met with unusual resistance. Marketing executives appear to be uncomfortable with today’s Hispanic population (and the diversity that lies within it), which represents uncertainty and change for those in positions of influence who are uninformed about what Hispanics can mean to the growth of their business. Instead, many Fortune 500 companies have decided to play it safe by including Hispanics in their “total market” or “general multicultural strategies.”
As another Fortune 50 senior executive recently shared with me: “We spent a million dollars to launch one of our product lines to the Hispanic consumer five years ago. We supported billboards, bus stops, radio and TV advertising. We didn’t see the ROI and thus haven’t committed to marketing to Hispanics ever since — as a viable consumer group. We have just folded them into the overall mix.”
When asked if their approach was culturally relevant, he admitted: “No, we just translated our English messaging to Spanish, not thinking of the cultural nuances and acculturation factors. Since the Hispanic consumer was growing in numbers, we just thought if we were to market to them in Spanish, sales would follow. The desired sales didn’t come through and many of those on the executive team no longer believe there is a legitimate business case to invest in the Hispanic consumer again.”
This is an example of what many companies have experienced. In today’s uncertain economic terrain, companies have become hesitant to properly invest in the Hispanic marketplace. As such, they would rather play it safe because they continue to lack the cultural intelligence and diversity in leadership to grow their business effectively and strategically.
Ignoring the Hispanic market represents slow death. On the other hand, those who invest wisely will dominate their industry for the next 20 years! Those who don’t are putting their businesses and brands at risk. The Hispanic market can no longer be viewed as a tactical option, but rather must become a strategic imperative. The Hispanic market must stop being managed and approached as if it were a diversity initiative. You must either be in or out. There is no grey area here. I have witnessed too many companies market to Hispanic consumers as if they were supporting an affirmative action program. You can’t buy Hispanic loyalty – you must earn it.
In today’s workplace and business landscape, diversity is no longer for sale. Companies can no longer be allowed to buy diversity compliance – they must now be accountable to live it! Supporting a diversity initiative with sponsorship dollars or by co-marketing a Hispanic event or a Hispanic website is not the answer. The old “marking the check-box” approach actually hurts your brand now. Without a more integrated, holistic approach (as I will soon describe) these types of decisions are insulting. Diversity in leadership is the new normal to win the war on talent, create new revenue streams, solidify global economic impact and build leadership relevancy. This applies not only to Hispanics, but to all diverse groups and populations.
It’s time for America’s corporations to stop looking at diversity as a cost center expense (an initiative with a beginning and an end that keeps people uninformed about what diversity can do for business growth) and now come tounderstand diversity as a profit center (an investment managed as a best practice that represents an embedded part of the organization’s central ethos and way of thinking). It’s time to change the conversation!
How has the current approach translated in the workplace for Hispanic professionals? Consider that according to the Center for Talent Innovation – only 5% of mid-level Hispanic managers have sponsors.
No wonder America’s global competitive ranking continues to decline – from #1 to #5 in recent years (see World Economic Forum website for details). This is extremely concerning when you consider that 54% of the United States will be minority by 2050! Why does this have a direct impact on the US economy? There are currently not enough of the right resources and infrastructure to support today’s highly diverse demographic shift.
What if 54% of America’s talent pool, clients and consumers are not effectively served? What happens if this new economic engine is not properly utilized?
Another economic collapse will happen if we allow the diversity bubble to burst!
From this current overview of the situation, I have determined that Hispanic marketing is not just about how to sell a product or service to the Hispanic consumer. Rather, it is about executing a focused approach that is made up ofthree essential interdependent variables:
1. Leadership (relevancy)
- Talent management, recruitment and development. Create a best place to work environment for Hispanics
- Result: Sponsorship and Workplace Influence
2. Brand (loyalty)
- Unique value proposition, business model & investment
3. Community (advancement)
- Consumers, clients, small business owners. Give rise to new Hispanic voices.
- Result: Advancement Platform
Hispanic marketing must encompass these three interconnected parts that are dependent on one another (Leadership Relevancy + Brand Loyalty = Hispanic Community Advancement). If one part is missing, you can’t conceivably achieve optimal ROI or measure its authenticity and impact.
Key elements amongst all three areas are the need for mobile tools, social media and thought-leadership. Leaders within your organization must have a voice that creates and sustains a relevant content marketing presence across mobile and social media platforms and delivers a message that remains active and authentic in support of Hispanics. Content strategies that are culturally relevant are critically important when you consider how high the Hispanic engagement index is across social media and mobile platforms.
Many organizations want to make Hispanics part of the “mainstream” – but they must know how to integrate their intentions with proper intelligence and know-how.
In most organizations, the three aforementioned functional areas (interdependent variables) don’t talk to each other and if they do, it’s not frequent or with strategic intent. Effective strategic development and implementation of Hispanic marketing requires the following (but not limited to) departments working closely with one another:
- Corporate Strategy
- Sales & Marketing
- Corporate Social Responsibility
- Research & Development
- Community Relations
- Human Resources (Talent Management & Diversity)
- Information Technology (Big Data)
At first glance, it may appear that I have complicated what Hispanic marketing really is. At second and third glance, you will realize that Hispanic marketing requires companies to take a more streamlined, integrated and holistic approach that simplifies how to measure outcomes over time. You can’t serve or measure the value of the Hispanic market when it is managed with a fragmented and disconnected approach.
The most successful companies make the commitment to operationalize the Hispanic marketing process by aligning their core competencies directly or indirectly with the Hispanic consumer. Companies like McDonald’s andTarget know this is the most optimal approach to profitably sustain Hispanic market leadership success. However, for every McDonald’s and Target, there are many more companies that appear to support just one cog in the wheel.
Don’t fall into the trap of asking these questions: How can I sell more to Hispanics? How can I get more Hispanic traffic on my website? How can I get Hispanics to convert? Why can’t I attract more Hispanic viewers?
Ask the right questions: How can I earn a relationship with Hispanic consumers? What is the right culturally relevant approach to earn trust? Win loyalty? And build influence?
Here are a few examples of the culturally relevant work my organization (Center for Hispanic Leadership) has leveraged to make the path easier for Fortune 500 and mid-market organizations that are ready to make a commitment to the right holistic Hispanic marketing process (click on each link for details).
- Hispanic Training Center
- Hispanic Heritage Month
- Mobile Strategy
- Lessons From My Father
- Latina Experts Blog
- Leadership eBook
- Marketing Whitepaper
- 2012 Hispanic Voice
America’s corporations that make the right investment now will stimulate economic development and market share gains by enabling the Hispanic market opportunity with a holistically driven approach that:
1) Commits us to becoming more culturally intelligent
2) Compels us to think of the Hispanic community as a profit center – an investment to drive innovation and growth
3) Holds all Hispanics accountable to elevate themselves and their capabilities – as employees, job creators and leaders.
Categories: NGL News