Reaching and serving a racially and ethnically diverse population is a hot topic wherever consumer marketers gather. The reasons are in the numbers.

Multiculturalism was the subject of the keynote speech at the American Bankers Association's national bank card conference in September. Thomas G. Exter, president of TGE Demographics Inc. of Ithaca, N.Y., said minority groups in the United States are growing six times faster than the nonminority population.

While minorities make up only 25% of the U.S. population, they will contribute 70% of the total growth throughout the 1990s. Hispanics will account for 33% of the growth, Asian-Americans 20%, and African-Americans 17%.

The Response

"Minority marketing is significant not only because of its growth, but also there is a lot of upward mobility," said Mr. Exter.

For example, the number of affluent African-American households grew 70% during the period from 1981 to 1991, while the comparable number for, white households grew 30%.

Banks are responding in a variety of ways. Some are hiring customer service representatives who speak a second language. Others are sending direct mail solicitations in several languages, and some have targeted certain markets with secured cards.

Yet creating special products for certain segments of the population can be dicey.

"Some minority groups are making noise when a bank offers a product in another language, but does not offer the same product in English," said Robert M. Bouza, president of the credit card operations at Key Federal Savings Bank in Maryland. The implication is that the product is inferior if it is not offered to the the nonminority population, he said.

Seeing the Possibilities

First Deposit Corp., a San Francisco-based card issuer that makes a science of market segmentation and targeting, does not tailor products to groups defined by their ethnicity. However, its customer service center can accommodate at least four languages.

"We don't believe that any one cultural group will have homogeneous financial needs," said Julie Montanari, senior vice president of First Deposit's secured credit businesses. "It is not the case that all Hispanics want to buy the same financial product."

Brian J. O'Hare, president of Norwest Card Services, markets to several minority groups but said he is opposed to using secured cards as a vehicle for reaching such people.

"We don't offer secured cards, and I don't think it is necessary to address these groups through [such] a product."

As reflected in the comments on this page, credit card bankers are generally excited by the marketing possibilities of cultural diversity.

I definitely think it is a profitable strategy, in the sense that a sizable portion of the population is made up of minorities and these folks are getting up on the economic ladder. Norwest has had a branch presence in Arizona for a couple of months and we expect to be in New Mexico soon. These new states give us a broader opportunity than we had in the Midwest to reach Hispanic and American Indian customers.

We are looking at ways to tailor our credit cards to some of these groups and we are considering developing solicitations that are written in Spanish.

For the vast majority of institutions, it would not be feasible to tailor solicitations to a large segment of the population. Most institutions have to target who they want very carefully.

We believe it is more profitable to target people based on their financial situations. We develop products and services based on specific financial needs.

We make sure that our mail solicitations are very simple to accommodate people who do not speak English as a first language, and our customer service representatives are able to speak about four languages.

Profitability depends on the size of the bank. A bank like Key Federal cannot afford a card geared specifically at the Spanish-speaking population, whereas a bank such as Citibank can afford to offer whatever card it wants, because someone in the office will speak different languages.

The only program we offer to a targeted group is an affinity card called America's Black Colleges Visa. We make donations based on card usage to a fund that pays out scholarship dollars to African-American students. We offer this product as both a secured and unsecured card.

In early 1992, we were the first bank in the U.S. to launch a bilingual credit card. We have Spanish-speaking customer service representatives and all correspondence connected with this card are in both English and Spanish.

We see a big opportunity with the Hispanic market. We are also looking at other groups.

The hardest thing a bank has to do is to convert letters and communications into other languages, but pursuing targeted markets is easier than ever before, because of technology like laser printers.

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