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Targeting the Latino Market

Patience and empathy are valued traits to promote trust and loyalty.

By Liz Castells-Heard

The American Dream? Today more and more Latinos aren’t just dreaming—they are successfully pursuing the American Dream with careful planning, hard work and the support and encouragement of family and friends. The 40 million Latinos in the U.S. represent 13 percent of the country’s population, expected to be 18 percent by 2025. Nationally, Latinos, both native and foreign-born, have a disposable income of $686 billion.

More than one in eight Americans is Latino and half are under 25 years old, which means that they are our future workers, taxpayers, homebuyers and business leaders. And yet, even as Latinos have made tremendous progress in recent years and are optimistic about their lives, many fall notably short in one area: They are hungry for financial information, yet existing institutions are not addressing Latinos adequately.

Consider the following revelations from the Yankelovich Hispanic Monitor Study: A full 85 percent of Latinos living in the U.S. need more financial information, and 91 percent want to see more financial institutions offer products and services with them in mind before actually putting their money there. So these Latinos look to the future with great optimism and understand the importance of managing their personal finances but have not yet taken all the steps to secure financial security.


Conservative and cautious
In general, Latinos in the U.S. make extremely conservative investment decisions, only purchasing the most basic and low-risk financial products and services. Even more basically, only 24 percent of Latinos have a checking account, as opposed to 65 percent of the general market population, according to the recently released Simmons spring ’04 study. In addition, Latinos are not saving as much as the general market. Figures show that non-Latinos make more investments—44 percent vs. 14 percent, including U.S. Savings Bonds, savings accounts, money market accounts, mutual funds, open stock market shares, company stock, and college savings.

Latino retirement security is at risk also because only one-third of Latinos participate in an employer retirement plan. Fewer than half have any retirement savings, and nearly two-thirds of their future income is represented by Social Security benefits. The need for a savings and investment agenda in the U.S. Latino community is essential in order to provide prosperity and peace of mind.
Latinos have different priorities when it comes to financial services and oftentimes do not know what is available. Most of them are accustomed to paying for everything in cash; therefore, loans and credit card usage are not as high as they are in the general market.

Crossing the cultural divide
The cultural divide begins with Spanish. Over four-fifths of U.S. Latinos are bilingual or Spanish-dominant, and financial products are hard enough to understand in one’s native language, let alone in another language. So language is one of the major barriers U.S. Latinos face to accessing a bank account or other financial services product. Companies with loyal Latino customers know that it’s not just about advertising to them (that certainly helps), but also about having bilingual staff who understand the nuances and their application to day-to-day business. They know that even if their company is well-known and trustworthy, the kind of service provided will determine if the experience will be positive for the consumer and lucrative for the firm.

When Latinos enter the bank or financial firm, the whole family may be in tow, and there may be need for a lot of “hand-holding.” Latinos want and need face-to-face interaction and employees whom they can ask what they want, and they want to feel as if they’re getting expert advice from a trusted source.

Meeting Latinos’ needs
The family unit remains the central part of Latinos’ lives, and the most important saving priority is their children’s education. This is a tough feat considering that most Latinos live from paycheck to paycheck, but understand that attaining the American Dream in the 21st century requires savings and asset ownership. Many Latinos also place an enormous emphasis on being debt-free because any type of debt is viewed as a burden and an embarrassment.

As U.S. Latinos increasingly participate in the American mainstream, their work and home lives change. As this happens, their financial needs change and evolve and, while they may be unaccustomed to bank accounts, retirement options, mortgage loans, etc., their need for them is still acute.


In targeting Latinos, it’s important to remember that they like to go straight to the source for information because they feel taken advantage of by intermediaries, but feel especially comforted by someone who takes the time to explain things to them in their language. They need more specific information and detail before they make a purchasing decision.

Marketers need to reassure Latinos that credit or debt is manageable and financially shrewd, and will not ruin their children’s future. Messages that dissuade Latinos of the belief that debt is a burden while ensuring that credit is empowering and debt financing possible in order to provide the best for the familia will be most effective.

Building trust with Latinos should be the foundation of all future interactions. As an example, Latinos look for experts to trust, and patience and empathy are valued traits that will promote trust and loyalty. It’s also important to develop a Latino-friendly corporate culture and understand that transactions in Spanish take longer. Targeted ads that combine positive role models and guidance, education and sophisticated messages are on the right track.

The opportunity is ripe for advisors looking to tap into the U.S. Latinos’ exploding purchasing power and intent to purchase. If you dedicate the appropriate time and resources to target the Latino consumer, both of you will reap great rewards and make progress toward your goals.

Liz Castells-Heard is the president/CEO of Castells & Asociados, a premier national Hispanic advertising agency. For more information visit


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