How Latino Members Are Changing Credit Union Marketing

Credit union marketing has evolved tremendously over time. Credit unions, once seen as the mom-and-pop-shop approach to financial services for the “little guy,” have evolved into a strong financial cooperative movement that empowers and enriches more than 118 million member-owners nationwide. Few financial industry success stories rival the growth of credit unions in size, scope and service, and effective marketing has been central to that growth.

But conditions are changing, and the familiar one-size-fits-all marketing approach is losing both its edge and effectiveness as communities throughout the United States continue to rapidly diversify. The current credit union member pool has broadened to include a rich cultural mix of individuals and communities, each of whom have their own lifestyles, principles and standards. Marketing, classically defined, is the art and science of helping businesses attract and serve clients in ways meaningful to them. As such, credit union marketing needs to evolve along with the changing marketplace institutions seek to serve.

America’s Latino community, one of the most prominent (and soon to be dominant) groups primed for credit union services, casts the longest shadow in terms of potential member growth. Institutions that have learned to effectively market to Latinos are able to enjoy more profitable futures both for themselves and their members. Institutions that do not modify their marketing will continue to stumble in connecting with potential minority members. Frankly, Latinos comprise a market too large to ignore.

Like any good marketing opportunity, the rationalization and motivation to serve Latino communities nationwide can be found in the numbers. According to the U.S. Census Bureau, there are 59.9 million Latinos who call the U.S. home, comprising close to 20% of the total population. By 2060, experts say those numbers will grow to 119 million, to make up almost 29% of the population. Today, one in five U.S. residents is Latino; by 2060, it will be closer to one in three residents.

The Latino population skews to a younger demographic – an attractive feature for credit unions concerned about the “graying” of their membership. And yet, minority populations as a whole take a more conservative approach to financial management when compared to other population groups, according to industry research. A higher level of Latinos favor electronic transactions on handheld devices than credit union members in general, though old-fashioned word-of-mouth support and personal endorsements of credit union services continues to be popular among Latino community members.

The Latino community offers tremendous opportunities for credit unions, but it is a complex market where members sometimes share no more than a common language. Coopera excels in guiding credit unions how to reach Latinos in culturally sensitive and meaningful ways – factors critical to capturing members’ interest and loyalty. The ability to grow and retain active credit union members is critical to future credit union growth, both for individual institutions and the entire industry.

It all boils down to having the right mindset and awareness, then executing the proper strategies to attract and serve Latino members. Investments in time and effort now can yield great rewards for members and the credit unions that serve them in the years to come.

There are multiple critical market characteristics to incorporate into traditional marketing techniques to make them more effective for this audience. And, yes, producing your marketing materials and messaging in Spanish and having Spanish-speaking frontline employees are must-dos, but that should only be the beginning of your efforts.

The Latino market is nuanced and fairly complex, meaning that homogenized financial solutions and the marketing efforts to promote them are rarely effective. There are 22 Spanish-speaking Latin American countries, each with its own unique culture. In addition, U.S.-born Hispanics tend to think, speak and act differently than their immigrant parents and grandparents, which further complicates the service equation. Credit unions must understand the specific Latino communities they are serving and create segmented marketing and service strategies to complement its many variations.

As mentioned earlier, the Latino market embraces a younger demographic that more often favors digital and electronic transaction solutions compared to most credit unions’ memberships overall. Online banking options and social media are attractive to Latino members, and credit union marketing and service strategies should lean heavily in the direction of electronic financial solutions.

That said, the market’s older member segment still responds to more traditional marketing means, such as print and broadcast. Find ways to distribute your print promotions throughout the community, including posting them with Latino-owned stores and other merchants that serve the community. If you have access to Spanish-language radio and television stations, consider advertising on those outlets, as well as sponsoring news and information broadcasts to better connect your credit union’s presence with the Latino community at large.

When it comes to product creation, keep in mind that first-generation Latinos still have a need for basic financial services, including check-cashing and remittance services, which shouldn’t be overlooked in what is rapidly becoming a more sophisticated product mix. Financial education across all generations is critical to helping Latinos – and all members, really – become good financial consumers.

In approaching the Latino culture, understand that community and family are extremely important, and efforts to sincerely recognize that importance will yield better results. Marketing campaigns that include testimonials should focus on families first and how financial services can help them achieve their goals. Marketing sells “the sizzle, not the steak,” as the saying goes, and any messaging that recognizes the hopes and dreams of the Latino community and offers solutions to achieving those dreams will be positively embraced.

Speaking of the community, credit unions can better support their member-service profile by becoming actively involved in the community itself. Maintaining a presence at and sponsoring social events, like church events and social gatherings, signals to Latinos that they are more than just “customers.” When credit unions are active in the community, they can become part of the extended Latino family – increasing members’ comfort levels and enthusiasm for doing business with the institution.

At the end of the day, Latinos are more likely than other groups to recommend the credit union and endorse its services to friends and family members. The strength of community and family ties will help more of those friends and family members embrace those endorsements, helping the credit union increase membership and wallet-share among the Latino communities it is seeking to serve. And wasn’t that the goal of marketing in the first place?

Kenia Calderon Ceron is Client Relations Director for Coopera in West Des Moines, Iowa.