Hola!
Trying to stay in touch? Telcom companies are eager to help
Hispanic families do just that.
By
Yuki Noguchi
Washington Post Staff Writer
Sunday, June 6, 2004
Elmer Arias whizzes through 5,000 minutes
a month on his cell phone, racking up at least $200 in charges,
which include the cost of daily phone calls to his native El
Salvador.
"As a business owner and as president
of the Salvadoran Chamber of Commerce, I call [El Salvador]
maybe two times a day for 15 or 20 minutes each," says
Arias, who owns La Hacienda Restaurant in Springfield. That
doesn't include, of course, regular calls to friends and relatives,
as well as his wife's calls to her family in Mexico.
Arias's cell phone rings and he pauses to
answer it. "I get so many calls, you know," he says
in lightly accented English.
On the other side of the Beltway, in Beltsville,
it's almost a sure bet Charlie Rizzo's Nextel phone is either
ringing or beeping.
"Hello? Hello? Helloooo . . ."
he calls out through static on the other end, before giving
up and closing the flip phone.
"This is probably from Ecuador or Nicaragua
or something, because it says 'incoming call,' " he says,
almost to himself, surmising that one of his vendors was trying
to get in touch. The phone rings again, and Rizzo launches into
a mix of Spanish and English.
Rizzo, a native of Ecuador and vice president
of international food-distribution company Rio Grande Foods
Inc., says he, like his employees, makes or receives a call
every couple of minutes. Supplying the company's 45 employees
costs, in an average month, about $2,000 for cell phone charges,
$500 for domestic long distance and another $2,000 for international
calling. That's a large chunk of the business costs for Rio
Grande Foods, which imports jalapenos, pupusas and other Latin
American goodies for U.S. grocers.
At home, Rizzo's monthly international bill
comes to between $300 and $400 a month, because he calls family
and friends in Ecuador at least three times a week.
"In Central America, mostly countries
are still just getting up with e-mails and stuff," so the
best way to reach out is still the old way -- by dialing, he
says. Even after 18 years of living in the United States, he
feels the pull of his roots, he says, echoing a sentiment often
repeated by Latino expatriates and business people marketing
to them. "We have the need to call."
Heavy reliance on phone service of all stripes
-- basic local service through land lines, long-distance calling
and cellular minutes -- is common among Hispanics like Arias
and Rizzo, who say that strong linkage to families and business
contacts back home have them getting on the horn constantly.
The statistics bear that out: As a demographic group, Hispanics
spend more of their monthly budgets on telecommunications --
10 percent more than average on cell phones and $6 more on monthly
long-distance phone service, according to Scarborough Research
-- mostly, the experts say, to stay in touch with their far-flung
families. Whether it's local calls to friends on the same block
or international calls to those thousands of miles away, calling
is a big business in the Latin American community.
It should come as no surprise, then, that
telecommunications companies have joined the array of firms
training their sights on the pockets of Hispanic families. For
at least two decades, some businesses have seen potential in
the Hispanic population, but now both marketers and consumers
say they see the focus taking hold across more and more industries.
Latinos represent the fastest-growing minority
population in the United States, with spending power expected
to reach more than $1 trillion within four years. Roughly $4
billion is spent every year marketing specifically to the group,
which makes up about 14 percent of the U.S. population, according
to the Association of Hispanic Advertising Agencies.
"You see it everywhere -- some new entity
deciding this is a market and going after it," says Alisa
Joseph, vice president of advertising marketing services for
Scarborough Research, a market research firm. Companies that
sell banking services, packaged foods and cellular phone service
are all developing strategies to sell specifically to the Hispanic
populace. "They have large spending power, large families
and a larger sense of loyalty" as a group than the population
as a whole, which makes them ideal consumers, she says. "The
marketer is looking at it as, 'If I don't start looking at it,
I'll be so behind the eight ball.' "
Telecommunications ranks sixth on the list
of spenders on Hispanic advertising, as it does in spending
to the general market -- behind consumer products, the automotive
industry, consumer electronics retailers, entertainment and
manufacturing, according to the AHAA. Overall, 7.7 percent of
the industry's 2003 advertising dollars went to television and
print promotions targeting that market.
That percentage was lower than the 12.1 percent
of telecom ad dollars the Latino market attracted in 2000, but
the dollar amount was up, from $210 million to $241.3 million,
according to market researcher Santiago Solutions Group. Consumer
electronics sellers, by comparison, are trying harder: Those
companies spent 19.6 percent of their overall advertising budgets
last year on marketing to Hispanics.
GTE Corp., one of the predecessor companies
to Verizon Communications Inc., was one of the first telecommunications
companies to make its move.
Back in 1998 the company had "already
hit the English-speaking market and was looking into the Spanish-speaking
market," says Ed Miller, executive director of Verizon's
multicultural marketing program. As it turned out, the early
investment paid off because more than 60 percent of Verizon's
Hispanic customers are recent immigrants, and heavy users of
international calling customers who spend, on average, 18 percent
more for Internet and telecommunications services, he says.
Cell-phone service provider Nextel Communications
Inc. just recently hopped on the bandwagon, and is now trying
to catch up to rivals such as Verizon Wireless and Cingular
Wireless.
"Looks like there's an opportunity that
others are capitalizing on that we're missing," Nextel
executives told themselves about two years ago, says Miguel
Avila, Nextel's senior director of emerging markets.
In April, the mobile-phone company launched
its Hispanic marketing efforts in Miami, Los Angeles, Chicago
and San Diego, hiring Spanish-speaking staff in its stores,
and translated its fliers and customer contracts into Spanish.
The company rendered its "Nextel. Done" slogan as
"Nextel. Ya." "Ya" means already or, in
this case, now. Nextel skewed advertising more to Spanish radio
stations in areas where Spanish-language newspapers aren't as
heavily circulated. It sponsored a gigantic promotional booth
at a recent festival in Miami and advertises in Spanish to a
large Latino audience that watches NASCAR racing.
Last month Nextel, which has been building
out its network in Latin American countries, launched an international
version of its walkie-talkie service, allowing users here to
communicate with friends and family living in Brazil, Argentina,
Peru and eventually Mexico with a push of a button -- something
that business users like Rizzo say he'd use every day to reach
countries where he has vendors.
It's all worth the investment, says Avila,
because of the large number of Hispanic small-business owners,
and because of that high level of Hispanic telecom consumption.
Nextel won't say how much it's spending or how many Latino customers
it has gained so far, but Avila says it hopes eventually to
increase its Hispanic base by 50 percent.
Karla Miliani, a Colombian journalist who
lived in Northern Virginia for eight months last year, says
the telephone was her lifeline then. Every week, she'd purchase
a $5 or $10 calling card at a local gasoline station and use
it to talk to friends and family back home.
"It's a cultural thing, I guess,"
says Miliani, who has since moved back to her hometown of Bogota.
"I think we have a different sense of family. I think we
need to talk more and communicate more with the people close
to us."
That perception put marketing to Hispanics
at the top of Cingular's short list of priorities this year,
says David Garver, director of national marketing for the Atlanta-based
Cingular, which is a dominant cellular provider in several big
Latino hubs in southern and western regions.
"They have different lifestyles, different
passion points," he says. "Their passion point tends
to be more family-related," and this is one reason every
cellular-phone company is touting family plans allowing customers
to add additional phone lines, he says.
Telecom as an industry didn't just wake up
one morning and think, Hmmm, let's go talk to Latinos, after
20 years of data showing the spending power and growth of Hispanics.
Like the banking and consumer-goods sectors, telecommunications
suddenly found itself a maturing business that had pretty much
tapped the mainstream market. As such, digging deeper into specific
market groups for customers is a common way to keep growing.
"The wireless industry is saturated,"
so now it's developing a more nuanced marketing message that
appeals on a personal level, says Scarborough's Joseph. With
more than half the population owning a mobile phone, the niches
to plunder are the youth market, business users and minority
ethnic groups, she says.
Embracing the Hispanic audience involves
more than slapping a sombrero on the label and translating slogans
into Spanish. And it's not uncommon for marketing newbies to
miss the mark.
Take the famous, if cryptic, dairy industry
slogan "Got milk?"
The direct translation simply doesn't work,
says Ana Harvey, president of translation firm Syntaxis LLC
in Vienna, which often translates marketing materials for U.S.
corporations. "It almost sounds like, 'Are you lactating?'
" Not good.
Also, says Harvey, most foreign-language
phrases are 20 to 25 percent longer than their equivalents in
English, which makes it difficult to fit them on tiny cell-phone
screens, like the ones sold by some of Harvey's clients, including
Sony Corp.'s mobile-phone division and phone-maker Siemens Corp.
Spanish for on and off -- encendido and apagado
-- were too long to fit on the screen, she says. "How on
earth am I going to get those to fit?" she asked herself,
then worked around the problem by simply using the words "yes"
and "no" to accept commands.
In other cases, there are linguistic differences
within the Hispanic market, Harvey says. Once, she had a contract
with a pest control firm, and translated the word "bug"
into bicho, which in her native Mexico works, but in Puerto
Rico is the slang term for the male sex organ. Luckily, she
says, editors caught the error before it went to print.
Advertisers say the Hispanic population is
now large enough and diverse enough that it's important to pay
attention to nuances within the community. One of the first
things marketers must determine, they say, is whether the target
population consists of native English speakers or people who
prefer to read the back of a box in Spanish; then, whether they
are Hispanic mostly in name and ancestry or are recent immigrants
with strong Latin American ties.
Elvia Arias, Elmer Arias's wife, says most
phone companies don't understand her family's needs. "There's
a huge market out there that Verizon and MCI aren't getting
because they aren't marketing correctly," she says. "We
don't want long distance in the United States, we want international,
because that's where we call."
Some small companies are getting it right,
says Elmer Arias. When a Spanish-speaking representative of
DigiLinea Inc., a Florida-based international phone-service
provider, called to offer him a deal of 10 cents a minute anywhere
in Latin America, he ditched his $1.10-a-minute MCI Inc. long-distance
account and his complicated calling cards and snapped it up.
"It's the marketing: They call and explain
in Spanish how much money we will save," he says. The language
and the technology were both easier for him to understand.
According to a study by the Cabletelevision
Advertising Bureau Inc. this month, 45 percent of Hispanic households
speak predominantly Spanish, while 34 percent prefer English,
and 21 percent are bilingual.
Rizzo, who works at the food distribution
company, says 97 percent of Rio Grande's employees speak Spanish
but are from varied backgrounds, which, he says, is just as
important for advertisers to understand.
"People like things that are made in
their own country," he says. So his company wouldn't be
caught dead selling jalapeno peppers from Chile to a Mexican
grocery store, or stocking a Central American food product in
the South American section. "They wouldn't touch it."
Multicultural marketing experts say the most
successful campaigns are those that recognize the Latino market
as a varied one with broad differences. Argentines, for instance,
are heavily influenced by European culture, and may not share
spending and lifestyle patterns of, say, Dominicans, who are
strongly influenced by African culture.
Latin foodmaker Goya Food Inc. has dealt
with this issue over the years by dividing the U.S. market regionally,
marketing different products to the Caribbean, Mexican and Central
and South American Hispanic communities. Accordingly, grocers
in South Florida tend to stock more black beans for the Cuban-heavy
audience there, while pinto beans may predominate in pockets
of the country -- Texas and California -- where the Latino population
is heavily Mexican.
Things like food are so specific to culture
that in many ways it's easy to cater to those differences. Services
like telecommunications, however, are harder to slice and dice
to suit different cultural needs -- a minute of talk time is
a minute of talk time.
"Some products are so generic and obvious
that they don't particularly require their own nuance,"
like telecommunications, says Carlos Ordonez, director of business
development at Cheskin, a San Francisco marketing and research
firm.
Still, even among mainstream companies, executives
are increasingly sensitive to subtler cultural differences,
says Rosa Grillo, who heads Grillo & Co., a District-based
public relations business.
Grillo, who is Cuban American, says a vice
president at a bank recently told her, "I would never hire
a Cuban firm, because I need to market to the Mexican American
population."
"I'm not often speechless," she
says, but the person's demand for detail caught her off guard.
Such subtlety may be rare, though, and its
best efforts aside, corporate America hasn't yet reached people
like Rio Grande's Rizzo.
"Oh, my God, they don't know how to
reach Hispanics," he says, noting that he often sees signage
in Spanish that get the national flags or slang expressions
wrong.
"What do I think they should do? I think
they should hire Hispanic executives -- hire people who really
know how to get into the market."
© 2004 The Washington
Post Company
