Marketers target Hispanic buying power

NEW YORK – When NxStage Medical Inc. realized Spanish-speaking people made up 15 percent of the market for its home kidney dialysis equipment, the company created a website and brochures printed in Spanish.

NxStage, which started its marketing campaign to Hispanics a year ago, has also increased its staff of Spanish-speaking customer service agents.

“If we’re doing our job in the community, 15 to 20 percent of our growth would come from the Hispanic population,” said Jeff Burbank, CEO of the Lawrence, Massachusetts-based company.

There are about 55 million Hispanics in the U.S., according to the Census Bureau, which reported Hispanics accounted for more than half the U.S. population growth from 2000-10. By 2060, it’s expected there will be 119 million Hispanics, making up nearly 29 percent of the population.

Hispanics also have enormous buying power – $1.4 trillion, according to an estimate by market research company Nielsen.

Companies are hiring celebrities, such as Sofia Vergara and Eva Longoria, to endorse products. Some are offering services aimed at Hispanics and are creating Facebook pages and Twitter accounts to reach Hispanic customers.

Smart companies go beyond ad campaigns; they’re hiring Hispanic employees, said Cid Wilson, president of the Hispanic Association on Corporate Responsibility, an organization aimed at increasing Hispanic employment in U.S. companies.

“Companies that don’t embrace Hispanic inclusion run the risk of being labeled a company that does not embrace diversity, and they might make a mistake in how they market to our community,” Wilson said.

But some companies haven’t yet gotten the memo that marketing to ethnic groups, including Hispanics, is smart business. In a survey of 150 marketing executives, 55 percent said they didn’t have the support of their CEOs for multicultural marketing programs, and 60 percent said they didn’t have the support of their boards of directors. The survey was released by the CMO Council, an association of marketing executives, and Geoscape, a consulting company.

“Hispanics are becoming a force by themselves,” said Jose Torres, a franchising consultant in Coral Gables, Florida. “It would be foolish for any company to ignore that segment of the market.”

Seeing opportunities

When Antonio Swad opened Pizza Pizza in a Hispanic section of Dallas in 1986, he quickly found his inability to speak Spanish made it hard to communicate with customers. Swad hired Spanish-speaking employees and began serving pizzas with ingredients like chorizo that his customers, many of them Mexican, liked. His business, renamed Pizza Patron, grew as word got around that his store offered good service.

“We were friendly, spoke Spanish and treated you with respect when you came in – it was an untapped market,” Swad said.

Today the company has more than 100 locations, mostly in Texas and California.

Recruiting franchisees

Many franchise companies recruit franchisees to serve Hispanic customers. Liberty Tax, which operates tax preparation franchises, has gone further, creating SiempreTax, whose target market for services including tax and immigration help is the Hispanic population. It has nearly 60 locations.

Strengthening relationships

Budding Co. is creating pages in Spanish on its website because the number of Hispanic customers for its building products is growing. The company began installing signs in Spanish in its stores in Camp Hill and Horsham, Pennsylvania, in 2009, and created brochures in Spanish.

About 20 percent of Budding’s customers are Hispanic business owners, including landscapers, general contractors and masons, said Hoyt Bangs, the company’s website manager. The Hispanic customer base has grown through word-of-mouth advertising that has also helped Budding build a business shipping its products to Mexico.