According to recent US Census data, Hispanics are the largest minority group in the country. US Hispanic income and buying power is growing stronger and is expected to reach over $1 trillion by the end of the decade.
The US Hispanic population has exploded 75% in the last decade, reaching 39 million, while the general population increased just 14%, to 283 million. Although states like Florida, California, Texas, and New York have been commonly targeted due to their significant Hispanic markets, states like Alabama, Iowa, Michigan, Mississippi, and Minnesota are experiencing rapid growth. A nationwide Latin boom is now reality.
The number of Hispanic households with more than $100,000 in annual earnings is growing at more than twice the rate of the general population's. An often-overlooked fact is that Latinos commonly group their family earnings to purchase a car, home, and so on. As a result, many businesses underestimate the purchasing potential of many Hispanic consumers.
The economic importance of understanding the dynamics of the growing Hispanic market has become important to companies that have already been marketing and selling to Latinos as well as those interested in gaining market share by targeting this group for the first time.
Advertising agencies are getting into the action; the media expenditure budgets of large companies are increasing in order to compete for a piece of the Hispanic market. However, too often advertising jumps before a company is ready to properly service Latinos once they become customers. That is a risk that companies cannot afford, especially since genuine Hispanic brand loyalty is built on relationships.
Long-term retention should not be overlooked when the average age of the Latino population is 26 years (compared with 37 years for the general population). The youth segment of the Hispanic market also represents a large opportunity for companies to increase sales and build new customers. A younger market becomes a prime target for companies whose services and products are directed at children. Between 2000 and 2010, the number of Hispanic children ages 5-9 is expected to increase 21%.
Marketing plans that target Hispanics should be approached the same way as those for reaching the general population. For example, you would most likely refrain from advertising to your English-speaking customers if your customer service was not ready to handle product inquiries in English.
Customer relationship management is just as important in a Hispanic marketing plan as it is for the general market. Companies need to understand that prior to the launch of an advertising campaign to reach the Hispanic market, Spanish plays a critical role in customer service.