“Many Hispanic direct mail programs fail to achieve their objectives because they choose the wrong list,” says Hispanic direct marketing consultant Gustavo Gruber. He notes that the best Hispanic lists are response lists. The problem, however, is that these lists often are limited in the amount of people on them. “As marketers move to increase the size of their mailings, they have to rely on compiled lists,” continues Gruber. Compiled lists, while they have a greater universe of names and contact info, are less expensive than response lists, because the people identified have not demonstrated a related purchase.
When using these lists, direct marketers must have an excellent understanding of the source and the method used to identify Hispanics.
According to Rick Blume, multicultural division VP at Specialists Marketing Services, there are basically 3 types of Hispanic lists on the market:
1) Those generated from Spanish language promotions such as Spanish language direct mail, print, TV, etc.
2) Those that are Spanish-speaking inferred, created by an overlay, census, Hispanic first & last names, etc.
3) Those that are just surname-derived, which could be 5th generation English speaking Hispanics.
“To elaborate more on each,” says Blume, “the first group, Spanish-language generated, could consist of Mail Order Buyer lists (Tabak's Spanish), Spanish-language magazines (Siempre Mujer), Spanish language catalogs (Botanic Choice Spanish), etc. The second group, Spanish-speaking inferred, could consist of the same type of lists as in the first group, except that these lists are typically English language generated or complied and through various means described in # 2 above have carved out a Spanish-speaking segment. The third group, Surname derived, is just that: a Hispanic surname overlaid to an English language response or compiled file.”
Bottled at the Source…
So where do these lists come from? Many are generated by Spanish-language magazines and/or Catalogs. The demographic information that the publisher’s possess about their readers can be extremely useful to marketers seeking to target a particular group. For instance, a luxury goods manufacturer would naturally be more interested in a list from a magazine like “Casa y Estilo” than a more middle-market magazine.
According to Rick Blume, Puerto Rican response lists are a treasure trove for Hispanic direct marketers, because there is no question about what language to target them in and they have shown a tendency to respond to offers in the past.
The Keys to Success…
LANGUAGE: One of the first decisions to be made has to do with whether to go English, Spanish, or bilingual. This is wholly contingent upon what segment one is targeting. If one is going after the more acculturated, third generation English-dominant Latino, Bilingual or English is preferable. If one is targeting newly-arrived immigrants with little or no fluency in English, then clearly Spanish is preferable. When in doubt, bilingual is the way to go, as it is up to the recipient to choose which language he/she receives the messaging.
RELEVANCE: It is generally accepted that simply translating general market copy is insufficient to incite Hispanic response on any significant scale. Instead, the goal is to engage Hispanic consumer with messaging that speaks to them and calls them to act. Just as with language choice, relevant messaging is determined by the target.
If you’re targeting a particular group – Puerto Ricans, for instance – then you might want to incorporate something that appeals to their Boricua pride. More often than not, however, the pieces are directed at a more general Hispanic segment, which is why we see soccer themes used so ubiquitously.
LIST QUALITY: List quality has been cited by many in the industry as the single most important factor of a direct mail campaign. Carlos Torres, chief creative officer for direct marketing company Directo Hispano puts it this way: “The quality of available lists needs to be better. Building lists takes time and it is not enough to simply gather information; it needs to be updated, enriched, clustered and cleaned. A way to improve list quality, in my opinion, is to mine data and understand the behavior of Hispanic customers as compared to that of other segments.”
Consultant Gustavo Gruber sees it this way: “In the general market, for instance, 40% of the response is due to the quality of the list, 30% due to the offer, and another 30% due to the copy/layout. In the Hispanic market, the list quality is even more important, accounting for 50% of the response, the copy/layout is the next most important, and then comes the offer. Essentially, if you get it wrong on the list and the copy/layout, it doesn’t matter how good your offer is.”
ROI: Another stumbling block with direct mail campaigns targeted at Hispanics is achieving satisfactory ROI. While it is true that Hispanics tend to have higher response rates than the general market, the list universe is also exponentially smaller. The effect is that even though a Hispanic campaign might deliver above-average response, it is still not enough to cover production costs. The solution to this, says Torres, is to integrate the Hispanic DM campaign with the general market DM campaign. By leveraging the economy of scale afforded by the large volume of general market pieces, the company can lower production costs of the Hispanic pieces and satisfy their ROI demands with the above average response of Hispanic recipients. As Latin Force’s managing director and senior partner Cesar Melgoza said, response rates of 0.5% with 25% conversion can work out for some companies, but many want higher rates.
Top Five Factors to Ensure a Successful Hispanic DM Campaign
1) Quality List
2) Language Choice–Know your Target.
3) Good Product Offer
As the digital divide narrows and more Hispanics access the internet, marketers are seizing the opportunity to reach them via email. Many marketers view email marketing as a great way to reach young Hispanics, given that 35% of all Hispanics online are under 24 years old. There are two ways an advertiser can approach email marketing: One way is to purchase a 3rd party mailing lists and send out blanket emails, hoping to net some curious consumers. The other is to craft a campaign from scratch, enticing consumers to opt-in via promotional offers, and then managing the relationship based on that consumer’s interaction with the product and other factors such as the consumer’s age, sex, ethnicity, etc.
While the bulk email approach seems tempting because of its relative ease and lower cost, John Santiago, co-CEO of Hispanic digital marketing company Media 8 says it should be avoided whenever possible. “Hispanics are as skeptical about brands that they are unfamiliar with as they are loyal to brands they know and trust. As such, a Hispanic consumer is much less likely to respond to an email offer that comes out of the blue, than they are to respond to one that they are expecting or that has been referred to them by a friend or family member. We’ve tried both approaches, and we decided to abandon the 3rd party list approach a few years ago. Hispanic consumers simply don’t respond to unsolicited, unfamiliar email offers.”
Ahorre Marketing president Geoffrey Gonzalez agrees: “There are a lot of people in the industry that highlight the benefits of mass emailing because it is so much cheaper than print and broadcast marketing. But when it comes down to it, the ROI just isn’t there. You can sell it, but you can’t really deliver, and you can’t control it.”
Gonzalez also warns against the legal pitfalls one can succumb to when using third-party lists: “You have to be really careful when emailing in bulk, because you can never be absolutely positive that all of the emails on your list have been obtained in the right way. If you don’t, you can find yourself on the wrong end of a lawsuit.”
Rick Blume says that the legal concerns might be a bit overstated, and that they should not be a deterrent for someone considering buying a list, as the credibility of list brokers rests on the voracity of their lists. To provide ill-gotten emails in these lists would be incongruous with the advertiser’s interests.
Blume does acknowledge that the demand for Hispanic e-mail lists is nominal: “Probably the biggest issue is list quality. While companies like Univision and Terra have these massive lists, the fact is that the vast majority of people on those lists have not made any purchases and demonstrated a proclivity to buy, but have more likely signed up for something free, like a sweepstakes, and had there email thrown in the bucket with the rest of them.”
Eric Francais, Creative Director of Walter Karl, a B2B and consumer marketing company that manages the “Lista Buena” Hispanic email list, maintains that email is the way to go: “Email will outperform postal mail any day of the week. The main reasons are pricing, convenience and interactivity.” With regard to pricing, Frances says that unless you are a huge company like Nike or Sony who is mailing out a huge number of pieces, it is very hard to achieve a satisfactory return. “You have to pay for the paper, printing and postage. With email, the costs associated are much lower,” says Frances, “sometimes more than half. In terms of convenience, when you get an offer in the mail, you have to physically open the mail piece and then either mail something back or pick up the phone and call. With an email piece, all you have to do is hit reply or click on an email to express interest,” says Frances. “Finally, with regard to interactivity, the email piece has the advantage of being able to link to the website, a product demo, etc. You just don’t get these options through regular mail.”
While Hispanics are generally wary of unsolicited offers, they are conversely quite responsive to those that have been referred to them by a friend. As such, it is important to include features like “Send to a friend” buttons in the mailings to capitalize not only on the viral nature of email messaging, but also on the validated messaging inherent in an email sent from a friend or family member.
Media 8 recently managed a sweepstakes campaign for the Mexican airline company Mexicana, a campaign whose success rested upon effective email management. The objective of the campaign was to build an opt-in list from scratch and sell tickets. Toward that end, the company offered consumers various prizes, including free hotel stays and airline tickets. Media 8 enlisted the services of an email marketing company called RightNow to provide the technological infrastructure to track customers’ purchase history, their location, and other important segmentation-related data.
“Keeping track of this customer-specific info is crucial to effective email messaging,” says Media 8’s John Santiago. “One has to be cognizant at all times of the consumer’s relationship with the product. After all, we want to be speaking quite differently to someone who has already made a purchase, than we do to a prospective customer, or a customer who has made repeat purchases.” Santiago notes that open rates for emails sent to established customers can range between 5%-10%, higher than bulk email open rates.
New List: La Lista Buena Email Database (April, ’08)