LAS VEGAS-Many credit unions are following some bad advice when it comes to marketing to Hispanic consumers, and in fact may even be alienating a potentially lucrative sub-population, according to Edward Speed and Lionel Sosa.
Speed, CEO of $1.9-billion TDECU, headquartered in Lake Jackson, Texas, and Sosa, who, among other accomplishments, has served as Hispanic media advisor to eight Republican presidential candidates dating back to Ronald Reagan in 1980, said there is a group of "profitable Latinos" that is being overlooked by conventional wisdom.
"I have a contrarian view of credit unions' treatment of Latinos," Speed said. "I have a running gun battle with CUNA and the state leagues over marketing to the Latino market. We should not focus on unbanked, first-generation immigrant Latinos who do not speak English, as this sends the wrong message."
According to Speed, the focus on unbanked Latinos leads many second- and third-generation Latinos to tell him they don't need a credit union any more because they now have money. "But they tell me they sure are glad we are helping unbanked immigrants."
Sosa said financial marketing and politics are very similar. If people are going to buy something from a company or vote for a candidate, "first have to know you, then they have to like you, then they have to trust you," he said. "After that, getting the sale or the vote is much easier."
CUs can put that principle into practice, he continued, because Latinos are open to the idea of people helping people and of a community that helps families.
"Credit unions are about doing good," he said. "They are about serving others in a better, more friendly way."
Therefore, Sosa said, when trying to reach assimilated, English-speaking Latinos-now a $1.6-trillion market-there is no need to have separate "Anglo marketing" and "Hispanic marketing" campaigns. From his consulting work with numerous corporations, Sosa offered five general tips for marketing, then he and Speed gave specific advice on reaching Latinos.
Strategies Outlined
1. Do what the top brands do. Sosa said the best marketers commit as many resources to the brand as to the quality of the product or service offered, they position the brand as better than or different from the competition, while linking it to a powerful human emotion. "What a company makes, does or offers is something that talks to the consumers' heads. What the company stands for, its values, talks to the heart and soul," he said.
Sosa cited the example of Coca-Cola, which manufactures a beverage but in its marketing links itself to world harmony. Similarly, McDonald's makes fast food, but its commercials emphasize eating in its restaurants equals family closeness.
When Sosa worked with TDECU he outlined a similar path. The credit union does "expert financial solutions" and offers "service an owner deserves" and its value is "together we are better."
"If credit unions do the exercise, if they figure out what they make, what they offer and what their values are, that is the first step to being great," he said.
2. Advertising themes. What does a CU want consumers to think, feel or do? Sosa said credit unions need to give people reasons to believe in the CU.
3. Keep it simple and consistent. One of the best practitioners of this concept is Apple, he said. The company's website is simple, and gives information as it is requested, not all at once. "Southwest Airlines has one simple message in its commercials, 'Bags Fly Free,' which is very powerful," he assessed.
4. Anticipate the future. And that future is online and starts with a credit union's website, Sosa continued. He said the website should "know" the members, anticipate their needs, offer products and services to meet those needs, make it easy to add the products/services, and build loyalty through engagement.
"Look at Amazon.com. When customers log on the site knows what they bought before and makes suggestions as to what to buy next, and everything is easy. Netflix knows what movie customers watched before and suggests what movie they will like next."
Social media is a big part of this online future, Sosa said, stating it should be used for building relationships and learning about members' needs, but never for selling products. He advised CUs to stay up to date on text messaging, mobile Internet, mobile downloads and near field communications.
"Convert these reams of data into action."
5. Push brand attributes. TDECU refers to its members as "owners" in its marketing efforts. It has billboards with people pointing to themselves with the slogan, "I am an owner." Similarly, it bills its staffers as "experts" and "advisors." Instead of a loan officer, certain billboards have a picture of a "loan expert."
6. Court profitable Latinos. Speed said too many CUs portray Latinos as poor, undereducated, exploited people who only speak Spanish and who do not understand banking and need to be protected.
"These assumptions can cost us the second generation and beyond," he declared. "There are millions of Latinos who are assimilated and educated. They retain elements of their traditional culture, whichever country they come from, and they add elements of Anglo culture. These assimilated people make up 67% of the Latino market; they are born here, they speak English, and they are the ones credit unions should be targeting."
The real issue is not about "brown" or "white," it is "about green" Speed added. He said TDECU has programs in place to reach the unbanked Hispanics because it wants them to be members when they become acculturated, but said, "that is an outreach market, not Latino marketing."
Sosa said Latino buying power will continue to increase because the population is growing rapidly-and much more by birth rate than by immigration.
