VISA Produces Landmark Guidance for Credit Unions Seeking to Market Cards to Hispanics

SAN FRANCISCO – VISA USA has produced what may be the definitive marketing guide for its member banks and credit unions seeking to reach the Hispanic market. The VISA Smart Moves Hispanic Module is the latest in a series of intensively researched packages designed to help VISA issuers improve some aspect of their portfolio performance, such as card activation or card use. It is the first of the association’s modules to focus on a specific group of card users rather than on a specific card activity or practice. “We wanted to emphasize that Hispanics do not need different cards from anyone else,” emphasized Sarah Thompson, vice president for VISA consumer credit product office. “But we wanted to bring out that issuers cannot speak to the Hispanic market in the same way as they speak to the English-speaking market.” The old idea of a credit union simply dubbing its existing card promotional material into Spanish is simply not the way credit unions need to go, Thompson explained, and the wealth of data that VISA collected from card issuers, market research and its own experience proves that and explains why it is so. According to the 59-page module, the Hispanic card market differs from the English speaking card market in a couple of key ways. First, the Hispanic card market is segmented along lines that no other credit card market shares and, second, the Hispanic card market contains consumers which may already have a series of brand preferences and attitudes toward cards that other card users may not share. “Due to language and culture, the Hispanic segment is characterized differently than any other market in the United States” the module advises. “Therefore, standardized methods of reaching the audience will not suffice for this group. A specific and targeted campaign must be produced to ensure reach and desired action by the market.” In order to help guide issuers into this market, the module addresses both an overview of the Hispanic market as well as from the perspective of individual segments. It also discusses in detail how marketing and media approaches need to take this segmentation into account. Probably the biggest news to credit unions using this module is the degree of detail the different Hispanic card market segments have. For example, the module provides data that a credit union located in the Western portion of the U.S. might use to market its card to a Hispanic portion of its membership that might be primarily Mexican. Mexican-Americans have statistically the largest families, have the most youthful population and have achieved the least number of educational degrees, the module reported, but they also tend to have the largest percentage of adults fully acculturated to life in the U.S. Acculturation refers to the process under which an immigrant combines the cultural characteristics they bring with them with the cultural characteristics of the U.S. By comparison Cuban Americans, while a much smaller population and highly concentrated in the Southern part of the U.S., have the highest percentage of adults with a college degree and the smallest families, but they also have the smallest percentage of their adults acculturated to live in the U.S., the module reported. Differences like these mean that credit unions will need to do some detailed research to determine what sorts of Hispanics they have among their members in order to better communicate the details and advantages of their card programs to them, explained Chris Connelly-Freshour, director of marketing services for VISA. “Hispanic marketing is definitely not a one-size-fits-all solution,” explained Connelly-Freshour. “It needs some thought and requires knowing the card market.” For example, she pointed out that the module recommended including some money for ongoing market research in a card marketing budget, so that the issuer can fine tune marketing messages as they are being deployed. She also noted that the module’s research showed that Hispanics tend to favor more face-to-face and telephone interaction, over mailed or online communication, so that a card marketing campaign aimed at Hispanics will need to be adequately supported with bi-lingual staff at the call centers or branches. The module also made some observations about Hispanic media in the U.S., a communications avenue of which many credit unions are unaware. For example, direct mail marketing to Hispanic households, provided the messages are tailored to the recipient’s income and expected acculturation levels, actually have a better chance of making an impact because, on the whole, Hispanic households receive far less direct mail than do other households. “Use of this vehicle to target Hispanics may appear complex to marketers,” the module observed. “However, Target Marketing magazine reports that Hispanic households only receive an average of 20 direct mail pieces a year, compared with the 300 or so received by the general U.S. population.” Direct mail to Hispanics has a response rate of between 25% and 100% greater than that of other, more general, direct mail efforts, the module added. Both Thompson and Chris Connelly-Freshour emphasized as well that the broad spectrum of the Hispanic market makes it important for a card issuer to have many different card products to offer Hispanics of different income levels and those with varying degrees of comfort with banking products. Highly acculturated Hispanic consumers might be very comfortable with credit cards, the module pointed out, but other Hispanic consumers who are not as culturally familiar with banks might be better off starting with a prepaid or payroll card or see a debit card as a reason to start a checking account. -