For financial institutions seeking to reach out to minority markets, particularly Hispanics or Asian-Americans, language barriers always present a formidable challenge. Even after a financial institution translates its marketing materials into other languages, it must make sure that the material makes it the right members or customers.
Put simply: How do credit unions ensure that their Spanish-language brochures, for example, reach Spanish speakers? It is a critical question, and one that can be fraught with pitfalls. The benefits are mostly self-evident. People who are contacted in their native language are more likely to respond.
For example, several industry marketers agreed that the response rate for Spanish-language direct mail is much higher than that of marketing materials meant for the general population.
"In the Hispanic market, to a Spanish list, the responses are much better," said Rick Blume, VP-multicultural marketing at 21st Century Marketing, a Farmingdale, N.Y., company that collects and creates direct marketing databases. "They get about one-tenth of the mail in their language that consumers get in general."
For the same reason, though, mistakes stick out and can be harder to overcome. Someone who speaks Chinese might take offense from a Korean-language brochure, or at the very least will not respond to it.
"You don't want to alienate consumers," said Felipe Korzenny, the head and co-founder of Cheskin, a marketing research and consulting firm based in Redwood Shores, Calif. "For someone to assume you are Chinese when you are Korean, or vice versa, it can be offensive, and make the (financial institution) lose its competitive edge."
Don't Have The Data-Don't Try
That is one reason Wells Fargo & Co. is not targeting consumers with bilingual direct mail.
"We don't have the data, and it would be a mistake even if (only) 5% weren't accurate," said Robert Byrne, the director of its diverse growth segments group.
In fact, legally Wells is prohibited from asking for a customer's ethnic information except when making a mortgage. Instead, the San Francisco-based banking company tries to draw new customers by advertising in media it has found most appealing to specific ethnic groups, such as Chinese newspa-pers or radio stations popular with African- Americans.
Likewise, Wachovia Corp., Bank of America Corp., and Citigroup Inc. have run focused, bilingual ad campaigns designed to pull people into their branches. These campaigns have included billboards, TV spots, and brochures.
And some banking companies have dabbled in direct mail. Last year U.S. Bancorp launched its first campaign targeted at prospective Hispanic checking customers. It used a list of its customers selected by census tract and sorted by last name, and a vendor-generated one of people who had identified themselves as Spanish speakers. The campaign was "successful-it had one of the higher response rates for this type of offer," said Steve SaLoutos, senior VP-product management and financial analysis.
In fact, on a response percentage basis, "we exceeded what our expectations were for Eng-lish- language" direct mail.
Even with database advances, the most common method of identifying potential foreign-language speakers remains getting a list of surnames. Banks and their third-party marketers target some consumers with last names that are commonly tied to a specific ethnicity and try their luck. But that method has an obvious drawback. Not everyone with a Hispanic last name speaks Spanish.
Lately, some marketers have been embracing another option, using lists generated by self-selection.
Blume's firm tracks responses to promotions aimed at particular groups and languages. For example, it might have a list of people who subscribe to Spanish-language publications in an area, or who have responded to a Spanish-language contest. Using such lists can help prevent some of the pitfalls of foreign-language marketing, he said.