Focusing on family, communication, and success incentives is essential to the capture of Hispanic customers.
Posted Apr 5, 2005
In his keynote speech at day two of the 12th annual Directo Days Conference David Wellisch, AOL Latino's vice president and general manager, told the story of how he pitched AOL Latino to the company's execs. The 18-month-old service essentially began as a social studies lesson: Wellisch, then executive director of strategic development for the AOL Web Properties Group, spoke to the AOLers about a business strategy to capture the fastest growing demographic in the country. After about two minutes he paused and asked who had understood what he was saying. Hardly anyone raised a hand. The problem? He was speaking Spanish. "That's how our Latino members feel about AOL today," he told the group.
His listeners understood the point--he says of the AOL group, "They felt like a minority for about two minutes, so they got it." AOL Latino has since grown to be a successful enterprise, with more than 600,000 subscribers in that first year and a half.
Wellisch tipped today's audience off about what to focus on to attract the Hispanic market. Tip one is, focus on family: "Family comes first with Latinos." Two years ago, America Online had captured roughly 40 percent of the Hispanic market share when it was completely in English, but studies and focus groups showed the biggest growth area was going to be Spanish speakers.
Given the choice between the two languages, families overwhelmingly wanted English. The reason is, children are the ones surfing for information in English and so play a role in purchasing decisions. The company created a bilingual offering with language preferences options so the adults could set parental controls in Spanish while their kids navigate in English, for example. They added a tool for kids to ask teachers questions about homework problems that their parents don't know how to translate.
Tip two is, communicate: Hispanics use email and instant messaging far more than the general public. "It's basically free communication (to their home countries)," said Wellisch, who installed AOL IM when he visited his family in Ecuador.
Three is empowerment: "People came here at the expense of leaving family and friends behind," Wellisch said. "We must build on that success incentive to be successful in our marketing." Today, the company launched a personal finance channel called Dinero y Excito (Money and Success). Ford Motors, Century 21, and Wells Fargo are partial sponsors. Two weeks ago AOL Latino began offering a free online English course to its subscribers, and already has 40,000 Spanish-dominate Latinos signed up for the lessons.
Many Hispanic families don't have computers in the home, primarily because they think it's too expensive. This is a huge obstacle for marketers. "We had to find how to explain our offer to a group who really hasn't been on the Internet," Wellisch said. AOL partnered with community groups to teach Hispanics how to use computers and last year launched the AOL PC--a monitor, keyboard, color printer and speakers for $299 in exchange for a one-year commitment. The demand for this product was so high--four times what they had expected--that the call center broke, according to Wellisch. Unfortunately, attracting the audience was not enough: AOL discovered that although customers wanted these computers, the company couldn't convert them, because many of them didn't have credit cards, which was the only purchasing method the organization allowed at the time. Now AOL is developing programs to allow checks and money orders, and it started selling prepaid Internet cards in convenience stores today.
Going bilingual is well worth the investment: There are now more than 2 million Hispanics on AOL. The 600,000 subscribers to AOL Latino pay $23.90 per month to use those services, which allowed the company to boost advertising revenues by 400 percent. "You do the math. AOL Latino has been worth every penny to the company," Wellisch said. "That's how you build success stories."
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