Wells Fargo drops directly into the Hispanic market
Wells Fargo plans to increase direct mail initiatives in order to attract Hispanic customers on the West Coast, Daniel Ayala, senior vice president of cross border payment at Wells Fargo in Concord, CA, tells Portada®. Three years ago the financial institution began testing direct mail programs to promote its consumer remittances product. Its first test involved 5,000 Spanish mailers dropped in an L.A. neighborhood with a high number of Hispanic residents. The mailers, which invited Hispanics to use Wells Fargo's “InterCuenta Express” product (established in 1995) arrived around Mother's Day, and had a 4% response rate. Radio ads were broadcast two weeks after the mailing and, according to Ayala, significantly increased response rates. In 2002 and 2003, Wells Fargo ran larger mailings (20,000-25,000). Response rates hovered between 3.5% and 5.5%. The mailings were operated by an in-house team.
Direct mail has been very effective in promoting Wells Fargo money transfer products. Other print media vehicles, like newspapers and magazines, have not worked as well. Interestingly, newspaper and magazine ads had more success with the Asian, particularly Filipino, community, than with Hispanics. Wells Fargo will continue to use newspaper and magazine advertising in their Hispanic marketing strategy, but print ads will focus more on branding efforts.
The consumer remittances department, headed by Ayala, plans to team up with Wells Fargo's credit card issuer, which has more experience running mass mail programs for the Hispanic market (see “When Direct Mail is the name of the game,” page 27, Portada® No. 10, September/October 2004 or www.portada-online.com). They plan to promote Wells Fargo's new “Dinero al Instante” product along with mailings offering credit cards to Hispanics. Los Angeles based Anita Santiago Advertising is Wells Fargo's media buying agency for the Hispanic market.
Ninety percent of the U.S. Mexican population lives within Wells Fargo's footprint. Various studies suggest that Wells Fargo's market share of the remittances business is between 9% and 16%. Businesses like Moneygram and Western Union, which focus exclusively on consumer remittances (money transfers), have dominated the market for years. Lately, however, they have felt pressure from banks that are substantially cutting their commissions for these services.
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