It’s no secret that most Americans have been living on loans and credit cards since the 1960s. American banks and businesses developed a consumer driven economy that is rooted in debt and it now looks like that system will be changed in several ways. The Hispanic market, which is the largest minority group in the U.S., is not accustomed to this debt-based system to the same degree other non-Hispanic groups are. Hispanic consumers have been taught to buy when you have the money to pay. Deficit financing has not been a concept that makes sense to most Hispanic consumers.
Although we cannot generalize, it’s safe to say that the American system of banking is a new experience for a large number of U.S. Hispanics. A large percentage of Hispanic consumers do not have bank accounts or use any kind of financial services, especially credit cards; of course the banking industry is spending money to change that mentality. Banks like Citigroup and Bank of America have an aggressive strategy that includes alliances with Hispanic banks, in order to establish credibility with the Hispanic market and to entice them to use credit to make purchases. American banks and businesses are changing the banking behavior of U.S. Hispanics, although recent economic issues have slow down that process to same extent.
Most Hispanic Americans still send money home to relatives and do not use financial services of banks or other lending institutions. The ability to have some semblance of financial freedom is important. Low risk investments still take precedence over high yielding but risky assets. U.S. Hispanics do show a strong interest in insurance products in order to transfer wealth to other family members over time. Investments like stocks, bonds, mutual funds and brokerage accounts are not in most Hispanic portfolios. Hispanic Americans tend to accumulate wealth at a slower rate than non-Hispanic Americans.
The Process of Developing a Loyal Hispanic Online Customer Base
The U.S. Hispanic investor portfolio is a conservative one for the most part. About 7.3% of Hispanic Americans have a 401K account, 7.2% own stocks or mutual funds, and 3.9% have IRA’s or Keogh accounts. The favorite investments for U.S. Hispanics are a home and an interest earning savings accounts or CD. About 47% of all Hispanic Americans rely on homes and savings as their primary investment vehicles. Most of these investors do not use the financial services of professionals, they feel that they know how to invest in their family’s future, but more financial companies are pushing their products on the Hispanic American by using bilingual websites and Spanish advertising campaigns.
The American mentality and culture are an adjustment for the average Hispanic American. American business wants to merge both cultures and take advantage of the buying power of the largest minority in the U.S., by developing Spanish and bilingual websites that introduce the Hispanic market to products and services that are a part of everyday life in America. The Hispanic consumer is slow to change buying and saving patterns, so the process of developing a loyal Hispanic online customer base takes time and other resources. If an online marketing strategy includes brand recognition, Hispanic concepts and graphics, honesty as well as quality and service, the Hispanic American will become a loyal customer, if they are convinced they need the product or service. Hispanic consumers are known for influencing family and friends, so word of mouth advertising is established quickly. The key to attracting Hispanics online is to offer product and services with a Spanish mentality, American responsibility and honest friendship.
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