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 Hispanic Clients: The Untapped Market For AccountantsThe key to unlocking the profit potential of the Hispanic market is to develop an education-based marketing plan.
By Blaire Borthayre
It's no secret that the Hispanic population boom has gotten our attention. There are 39.9 million Hispanics in the United States. Census officials estimate that this figure will rise to fifty million by 2007.
According to the The Selig Center for Economic Growth, Hispanic buying power for 2002 was totaled at 580 billion with a predicted compound annual growth rate of 8.7 (The standard rate of growth for non-Hispanics is 4.8 percent). The center's study predicts that by the year 2007, Hispanics dollar power will rise to 926.1 billion.
Why are so many tax preparers and accountants missing the boat when it comes to this market segment?
To understand the answer to that question, look to the statistics. The Kaiser Family Foundation reports that more than half of all adult Hispanics living in the United States today are immigrants, and another fifth are the U.S born children of immigrants. The number of foreign- born Hispanics in the U.S has more than tripled in the last two decades. A recent study by Strategic Research Corporation forecasts that by 2020, one of every five U.S. residents will be of Hispanic origin.
The Hispanic population boom is a fairly recent phenomen. Accordingly, there is a lack of both experience and information about culture, language, and marketing issues specific to what is now the largest minority group in the U.S. While accoutants are interested in growing their Hispanic client base, many lack the knowledge of how to do so effectively.
The Hispanic market is actually broken into four separate categories. - The new immigrant: Less than five years in the U.S with little or no English skills.
- The transisitional immigrant: Less than ten years, still Spanish dominant but more acclimated and speaks better English.
- The acclimated Hispanic: ten plus years in the U.S.
- U.S born Hispanic/second or third generation.
Hispanics that fall into category three and four are usually served by the standard marketing strategies employed by most companies. Categories one and two however, remain incredibly underserved. The reason is that most companies who want to market to Hispanics typically have their media materials translated into Spanish. Unfortunately, this tactic will not work in to reach Hispanics in the first two categories.
This is due to the fact that Hispanics in category one and two lack basic information about American systems that would cause them to be interested in your services. In terms of tax preparation for example, they are often unaware that they can and should file taxes. Many who are here illegally do not know that they can file taxes with an ITIN. In fact, filing taxes is one of the only ways to now to obtain ITIN's for themselves and their families. They also fear that the IRS will contact immigration. Even those with social security numbers often throw away their W-2's because they don't understand the purpose of this piece of paper. Marketing campaigns geared to the Hispanic community must focus on education. A culturally appropriate advertising strategy explains issues that would not be of an interest to the typical American.
This explains why the standard advertising does not work. If you do not know that you can file taxes, why should you care if a tax office does free electronic filing? A fast refund is meaningless, even if you hear that message in Spanish. Companies only waste money by translating those traditional messages.
Many accountants think that since if they do not live in areas such as Texas or California then there is really not much need to go after the Hispanic market. In fact, the opposite is true. States with larger numbers of Hispanics have many second and third generation Hispanics. Access to bilingual services and information is the norm. In places where the Hispanic geographic earthquake has taken residents by surprise, there are no such support systems. Therefore the market remains untapped.
In North Carolina (5% Hispanic population) we conducted an inexpensive educational campaign in the Hispanic community and the response was overwhelming. We served three thousand Hispanics between two first year offices. Why? Partly because no one else was doing it.
The Commerce Department Census Bureau reports that there are now 1.2 million Hispanic owned businesses in the U.S. These firms employed 1.4 million people and generated 1.86 billion in revenues. The largest number of Hispanic-owned firms (1 million) were sole proprietorships, unincorporated businesses owned by individuals. C corporations, all legally incorporated businesses except for Subchapter S corporations numbered 78,500.
Many Hispanics with less than ten years in the U.S have started their own businesses in the fields of landscaping, construction and housecleaning. They are often eager for assistance with the bewildering process of paying employees, keeping books and paying taxes. Without that assistance, they manage on their own and risk legal problems with the IRS. In the North Carolina office, we set out to assist Hispanics with tax preparation and ended up with a large number of clients who needed business accounting services.
Education is obviously the first step to growing your Hispanic client base. Other critical components are bilingual staffing and cultural competency. The rewards are more than just financial. You will be providing a much-needed service for a group of minorities who are sometimes made to feel unwelcome in our country. You have the opportunity to look through the eyes of someone who did not grow up with our language, systems and cultural norms. Help them on their path of assimilation and we will all prosper.
Blaire Borthayre is a consultant, speaker and trainer in field of Hispanic marketing. She is the author of "Marketing to the Hispanic Community: A Comprehensive Guide for Tax Preparation Offices." (www.trainingresourceclinic.com)
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