The Hispanic population continues to be a very attractive target segment for marketers and advertisers. There are many demographic and economic factors that justify why marketing efforts, resources, and dollars should be allocated to these consumers. According to the Association of Hispanic Advertising Agencies, 66% of companies that actively targeted the buying power of the Hispanic market saw positive results in their sales. Yet, many consumer companies – especially automotive dealerships – are missing out on a potentially lucrative opportunity.
Below are some key takeaways that car dealers can use to capture the rapidly growing Hispanic segment. Think of it as your roadmap to capitalizing on the latest Hispanic consumer trends to drive more sales and revenue.
Explosive Population Growth
The Hispanic population represents the largest, youngest, and fastest-growing minority in the U.S. Despite these statistics, this population continues to be overlooked by many businesses, including automobile dealerships.
The facts don’t lie. Here are some staggering figures from the Census Bureau on the size and scope of the Hispanic population:
- 53 million Hispanic people represent 17% of the total U.S. population; in just 10 years, that number is expected to grow to 28%
- To put this incredible population growth in proper perspective, the African- American population growth has remained steady at 13% of the population for the last 30 years
- The Hispanic population grew 40% in just 10 years (2000-2010) while the non-Hispanic population grew only 3%
- In the next 20 years, the Hispanic population is projected to grow 82% while the non-Hispanic population is projected to grow only 1%
- The median age of the Hispanic population is 28; by comparison, the median age of the non-Hispanic population is 39. This means that Hispanics represent a younger, more attractive target audience than the general population.
Geographic Expansion
Hispanic population growth is no longer limited to the traditional regions of Dallas, Miami, and Los Angeles. According to Nielsen data, the fifteen fastest-growing DMAs among Hispanics from 2000 to 2013 are:
- Charlotte, NC
- Raleigh, NC
- Atlanta, GA
- Orlando, FL
- Ft. Myers-Naples, FL
- Oklahoma City, OK
- Tampa, FL
- West Palm Beach, FL
- Seattle-Tacoma, WA
- Washington, D.C.
- Las Vegas, NV
- Minneapolis-St. Paul, MN
- Kansas City, MO
- Salt Lake City, UT
- Austin, TX
Hispanic Purchasing Power
According to the Selig Center for Economic Growth, the Hispanic population controls $1 trillion in annual buying power in the U.S., and that number is projected to grow to $1.5 trillion by 2015. Clearly, Hispanic people are a key driver of overall automobile industry growth:
- One out of every four new cars sold in the U.S in 2013 was purchased by a Hispanic person, and this number is projected to double in 10 years
- Industry research has shown that the average Hispanic new-vehicle buyer spends $27,000 on the transaction–about the same as the U.S. average of $28,600
- According to Polk data, the overall market for new vehicle sales in the U.S. grew 9%, while new-vehicle purchases by Hispanic people grew 16% during the same period
- New-vehicle sales growth in the Hispanic demographic was more than three times the non-Hispanic growth in the first quarter of 2014
- 80% of Hispanic people prefer to purchase a vehicle, compared to only 7% who prefer to lease
Hispanic Media and Technology Consumption (Source: 2013 AHAA Hispanic Study)
- Mobile phone use is high among Hispanic people, who are 17% more likely to access the Internet through a mobile device than through a computer
- 41 million Hispanic people in the U.S. have a mobile phone, which is approximately 77% of the total Hispanic population
- Hispanics use text messaging 10% more than non-Hispanics
- Hispanic people download double the number of pictures and stream twice the amount of video content to their mobile phones each month compared to the general population
- In 2013, “auto” searches on Google in Spanish grew 24% faster than “auto” searches in English
- The growing Hispanic middle class is highly connected; 88% of Hispanics with a household income of $50K are online
- Hispanics spend 42% more on mobile devices and 35% more on data services than the general market
- Hispanics watch 62% more video online than non-Hispanics
- According to Nielsen and Simmons data, Hispanics spend:
- 17 hours per week online
- 14 hours per day with a technology device compared to just 8 hours for the general population
- 21% more time than the general population visiting websites on their mobile devices while watching TV, which makes them an ideal target audience for multi-channel campaigns
How to Engage Hispanic Buyers in the Showroom
Experts1 on diversity and multicultural marketing recommend these proven tips that have been highly effective with Hispanic auto buyers:
- Hispanic people tend to make family-based rather than individually driven decisions when buying a car; greet Hispanic shoppers and their extended families in a very welcoming manner (remember, multiple family members represent referrals and potential customers)
- Offer them a beverage and have your salesperson or receptionist personally serve it to them
- Hispanic people tend to be more focused on customer service than on price, and respect is the single most important aspect in an interaction. Listening attentively, recognizing individuals, learning from them and engaging them in ways that make them comfortable are effective ways to illustrate respect
- Relationship-building is culturally-embedded – Hispanic people tend to be more relationship-oriented and less transactional. Focus on interacting with and connecting with Hispanic buyers on a personal level
- Hispanic people want to feel comfortable with the car salesperson and have sufficient time to gather information while getting their questions answered. Make it a point to spend more time with a customer. The cliché, “it’s not about quantity, it’s about quality” definitely applies to this segment
- Speak Spanish, but don’t automatically assume that all Hispanic people want to be spoken to in Spanish. This applies not only to advertising messages but also to personal interactions
Digital Marketing Resonates with Hispanic People
Not many auto dealers have embraced Spanish-language search engine optimization (SEO) strategies, so Hispanics represent an underserved segment from a digital marketing standpoint.
- Research shows that 66% of Hispanics believe it’s important to be recognized as Hispanic through culturally relevant content; to that end, be sure to use in-language paid search ads to capture website traffic
- Given the heavy mobile phone usage among Hispanic people, using QR codes creatively can yield positive results. For instance, your offer should include a valuable download of coupons – tangible rewards for scanning the QR code
- Hispanic internet users tend to toggle between Spanish and English when browsing the web, so you should have bilingual Hispanic employees and have some parts of your website in Spanish
- Conduct research on the composition of the Hispanic market in your geographic area to understand local holidays and regional dialects
Conclusion
As auto dealers, you should focus on reaching Hispanic audiences and connecting them to your website, where they can browse car inventories, research model options, and ultimately share their experiences within their extended communities.
1. Juan Tornoe, Chief Marketing Officer, Cultural Strategies; Kelly McDonald, President, McDonald Marketing↩