For years, executives at Sears, Roebuck & Co. yearned to launch a Spanish direct-marketing program aimed at the nation’s Hispanic communities. The biggest impediment, says Al Tapia, Sears’ national manager for Hispanic marketing, was a lack of names of potential customers.
“The Hispanic market is a tough market to reach on a direct-mail basis because there are not a lot of lists out there,” he explains.
Thanks to a new industry focus on the Hispanic market, though, that’s less of a problem. Direct-mail brokers are furiously churning out lists of Spanish-speaking Hispanic consumers. One broker estimates such rental lists have mushroomed from just two in 1989 to 20 in 1991 to about 40 today.
Sears combined one such list with its own compilation of creditworthy Hispanic customers last month. The company then dropped a bilingual mailing to hundreds of thousands of Hispanic households in California, Texas and Florida. The “Scratch and Save” fliers offer customers 5% to 20% off purchases at Sears, depending on the department. Responses are still being tallied, Tapia says. But initial results indicate an increased level of Hispanic sales following the mailing, even outperforming average Anglo sales.
“We’re very satisfied,” Tapia says. “This is our first attempt at direct mail to that market. And we’re talking about more.”
The niche is worth hot pursuit. At an estimated 25.7 million, the Hispanic population in the U.S. is now almost as large as the entire population of Canada. And U.S. Hispanics are projected to number 34.2 million by the year 2000. Since 1985 the community’s buying power has more than doubled, to a projected $193 billion. And the market is younger than the Anglo market – 68% of Hispanics are under 35 years old, compared with 54% of non-Hispanics. That’s prime turf for budding brand loyalties.
That Hispanics are an up-and-coming market is not news. in just one recent indication, Donnelley Marketing’s annual survey of major marketers found that 68% planned to run some sort of Hispanic promotional program this year, up 11 percentage points from 1991.
But marketers are finding that the hottest button to push could well be direct mail. While the English-speaking market has cultivated an indifference – or even an aversion – to direct mail, Hispanics are far more receptive because they receive significantly less mail. The average English-speaking household is sent about 350 pieces of direct mail per year, while the average Hispanic household gets only 20.
“There’s just so much attention you can pay to direct mail, says Annette Swanstrom, vice president of D-J Associates, a Ridgefield, Conn.-based list brokerage. “But if you only get one or two pieces, you obviously will be more interested.”
Sears is just one of a growing number of marketers in an array of categories that are testing Spanish-language mailings. Fellow retailer J.C. Penney has begun mailing catalogues directly to Hispanic prospects and goes so far as to send accompanying brochures written exclusively in Spanish.
The telecommunications industry is heavily committed to the field. AT&T, one of the pioneers, has pitched the Hispanic market directly since the mid-1980s. Within the past year, MCI and Sprint have tested Hispanic lists for the first time.
Packaged-goods companies have also increased their Spanish-language mailings. Rick Blume of Database Management, a New York list brokerage, counts Procter & Gamble among his clients testing the Hispanic mails. Kraft General Foods, another client, now inserts coupons into a co-op mailing and also sends out its own catalogue to a Spanish-speaking audience. Mailed nationally, the catalogue sells everything from Log Cabin pancake syrup to Post cereals to Kool-Aid.
Few marketers will quantify what kind of response they’re getting. But all say the rates are higher than those from Anglo households and that they usually surpass projections.
The key, they say, is pitching Hispanic consumers in their own language. “It’s very important to carry on the culture and tradition,” says Rose Hernandez Griswold, senior account executive at New York’s Polk Direct. “We’re very proud of our background.”
AT&T promotes a variety of long-distance calling plans to Hispanics in the U.S., many of whom have relatives in other countries. Recently, the firm mailed out Spanish-language pieces promoting its Reach Out World program – targeting Mexico callers – and its Callers’ Club plan, aimed at the best Hispanic long-distance callers.
According to AT&T Hispanic marketing manager Priscilla Dominguez, the mailings earn good responses by delivering better-targeted markets. “[The mailing] is more relevant,” she says. “Therefore, people are apt to pay more attention.”
Companies must also customize their sales pitch to the different cultural values likely to be found in a household that speaks a different language. Reynardus & Sherman Hispanic Direct Marketing in New York recently sent out a mailing for Brooklyn Union Gas Co., urging eligible homeowners to convert from oil to gas heat. Rather than focus on the package’s rebate offer, the mailing played up the warming power of gas. “What was most important was that families were protected from the cold,” says firm partner Len Sherman. This pitch was significant, he explains, because most Hispanics come from climates warmer than that of the New York area.
Hispanic list-building is still in a rudimentary state, similar to the early days of direct mail in the 1950s. Then, as now, lists were first developed from responses to offers broadcast on television. Indeed, most names and addresses of Hispanic households are gathered through responses to sweepstakes tailored to the market and television offers advertised on Hispanic stations such as Univision and Telemundo. Lists of subscribers to Spanish-language magazines are also being cherry-picked.
The lessons from Hispanic mailings can be applied elsewhere. Direct mail’s first steps to reach the country’s diverse Asian communities are now being taken. And the coming years may well see attempts at international direct mail, especially to the multiculture of Europe. Those efforts will require the sophistication that marketers are now learning to make their own.