SNELLVILLE, Ga.–Credit unions that hope to grow over the next half-century have no choice but to target and effectively serve the Hispanic market, according to two experts, who further cautioned that taking the wrong approach in doing so can also have negative consequences that can last a “generation.”
Speaking to the African American Credit Union Coalition’s virtual annual meeting, John Andrade and Lionel Sosa gave CUs an overview of a surging demographic group (while being warned it should not be treated as a singular entity), were told Hispanic consumers are heavy users of mobile (where they most often conduct business in English), and advised on three common mistakes to avoid (while also encouraging CUs to get moving).
Andrade, the CEO of AND/COM and who has 25 years of experience in branding and marketing to the Hispanic population, including working with credit unions, and Sosa, of Sosa, Bromley, Aguilar Associates and who was named one of the 25 Most Influential Hispanics in U.S. by Time, led the AACUC session titled “Don’t Miss Out on Your Money: Reaching Latino Consumers for Future Success.”
The reason credit unions need to be targeting Hispanics is obvious, according to Andrade, who cited figures he called the “Latino Explosion,” as seen in the chart below.
Sosa shared these statistics, as well:
- The U.S. Latino population grew six times faster than Anglo population over the past 10 years.
- The Latino population is still growing at a very high rate. By 2030 the Anglo population is expected to shrink by 6%, while the U.S. Latino population is expected to grow by 29%
- Two-thirds of Latinos in U.S. are native-born and for the most part they speak English
‘Increasingly Important’
“Latinos are an increasingly important consumer group that if you are not already focusing on them, you need to start doing that right away,” advised Sosa, pointing to data showing the total economic output of U.S. Latinos was $2.6 trillion in 2018.
Andrade described U.S. Latinos as highly industrious and highly motivated to experience the American dream and to provide for their families.
“Latinos are hard working. They're dedicated, they're focused and they're making a comeback,” he said. “The really important thing to notice here is that from 2020 to 2040 U.S. Latinos are projected to account for 70% of all new homeowners. So, Latinos are poised to take advantage of multiple products and services from your institution.”
Andrade said the statistics around Latino-owned businesses are equally compelling, saying there are five-million small businesses owned by Latinos, two-million of which are owned by Latinas.
“By 2050, U.S. Latinos will account for nearly one-in-three working age Americans,” Andrade continued. “So, we are growing in population, we are joining the labor force and we are creating new businesses. This is important, because you have the personal side of the financial products and services that you offer, but you also have the business side. If that's the case, you have a double consumer.”
Digital Consumers
Those consumers are digital consumers, emphasized Andrade, saying 94% of U.S. Latinos over age 17 use a smartphone to access the Internet, compared to 85% of Anglos.
Moreover, said Andrade, Latinos are 1.5 times more likely to buy the mobile apps needed to use digital media.
“What that means is that your mobile branch (presents) a tremendous opportunity to reach the Latino consumer. They are much more likely to participate in mobile services than your Anglo consumer.”
Beyond the Data
But all that data, according to Andrade, can belie what Latino consumers really value, and it’s not technology. Instead, it’s imperative a credit union understand the “heart” of the Latino consumers, “where their emotions are,” and the difference between acculturation and assimilation.
“Assimilation is where you give up your culture and you take on the aspects of another culture. That's different from acculturation, which is where you retain the aspects of your Hispanic culture and then you adopt the aspects of another culture,” Andrade explained. “Many U.S. Latinos have one foot in each culture and it informs them, it guides them. But their roots, their values, come from this Latino culture…Latino immigrants do not replace their original culture. When they adopt a U.S. culture they love it and respect both.”
What’s critical, stressed Andrade, is credit unions must not treat Hispanics as “Anglos in waiting.”
Catholics & Protestants
Providing a deeper look into what has shaped the values of the two cultures, Sosa said Latino values are based on Catholicism, Spanish colonialism, and respect for tradition. Mainstream U.S. values, meanwhile, are based on Puritan, Protestant and Calvinistic thinking of a new and free America, he said.
He offered an even deeper look into those values in the graphic shown below.
“When we look back into the roots that's where our values are formed, that's the foundation of our behavior,” Sosa said. “But they can vary by culture, by geography, even by family, and those values seldom change. What we believe is driven by our values. Beliefs can change, and while I rarely change, beliefs can change based on information if it's correctly presented.”
To that end, said Sosa, a credit union seeking to reach the Hispanic consumer should work to convince people that credit unions “are their friends and their partner in planning for their future.”
‘Talking to the Heart’
As a result of all of their work with the Hispanic consumer Andrade and Sosa have created the brand pyramid shown at right.
“At the bottom of this brand pyramid is that we communicate, our products and services––what we do and what we make,” Sosa said. “In the middle of this pyramid is the benefit. (Saying) we offer better service is OK, but we need to go further up this pyramid and communicate our values, what it is we stand for. We can talk to the head all we want, but talking to the heart is where the decisions are made.
“If you are not talking about your values you are not going to reach that consumer in a meaningful way,” he added.
The Nuances
Sosa cautioned credit unions to pay attention to all of the nuances of the Hispanic market, including being aware of various sensitivities. Among the nuances to be aware of, along other advice shared:
- The emerging immigrant market should be targeted in both Spanish and English, as they are learning English.
- Target the Acculturated Latino market in English using Latino images and cultural nuances.
- Always depict Hispanics as equal and not as people who live in a separate “Hispanic bubble.” Treating Hispanics differently is a “big, big mistake,” said Sosa.
- A credit union should show that it serves the community and cares for individuals.
- Follow up and take the time to develop new markets. With persistence, loyalty will follow, he said.
- Always have the experts on the credit union’s team that know the market but also know the “heart and soul” of the consumer.
‘The Credit Union Consumer’
Andrade and Sosa closed their remarks by stressing, “The Latino consumer is the credit union consumer. You must communicate with them if you intend to grow and remain relevant in the next 50 years.”
Urging credit unions to make the people and time investments necessary to do it right the first time in reaching the Hispanic consumer, Sosa said those institutions that don’t do so will spend a lot of time and waste a lot of money cleaning up after mistakes.
“Mistakes in this market may take a generation to correct,” he cautioned.
According to Sosa, the three top mistakes often made in attempting to serve the Hispanic market are:
- Believing Latino equals Spanish. “It does not. In most cases you want to reach the mobile consumer, and remember they tend to be English, not Spanish.”
- Do not literally translate general market ads into Spanish.
- Do not assume the credit union cannot afford to target the Hispanic market. “You can't afford to miss that opportunity,” he told the meeting.
The Next Half-Century
Andrade and Sosa closed their remarks by stressing, “The Latino consumer is the credit union consumer. You must communicate with them if you intend to grow and remain relevant in the next 50 years.”