• by Diana A. Terry-Azíos , March 12, 2009

In addition to population growth and swelling spending power, one of the characteristics of Latino consumers that has made them attractive to brands and marketers is their tendency toward brand loyalty. Typically, research has proven that, although levels may vary depending on acculturation, Latinos demonstrate more loyalty to brands and products that they trust than their general market counterparts do.

There is no need to explain the opportunity there. However, recent Atlas Group observations and experiences point to a potentially missed opportunity among the acculturating and more acculturated (second or third generation) Latinos, who, under certain circumstances, may be considered "unbranded."

Explanations for less-acculturated Latinos' increased loyalty have a lot to do with familiarity. "[Latinos] believe it is less 'risky' to buy a brand they are familiar with, and they trust brands with which they are familiar," says Jose Lopez Varela, chairman of the Association of Hispanic Advertising Agencies and executive group account director of Lopez Negrete Communications in Houston. They seek brands with a reputation of quality, and recent immigrants tend to purchase products they recognize.

But what happens when acculturating Latinos don't have familiarity to rely on? What happens when the first generation born in the United States and raised with Latino values begins to navigate the complicated world of consumption and to make purchase decisions? They may not have their parents' or grandparents' brand to turn to.

First, not only may they lack access to brands from Latin America that they were loyal to, but they also have a plethora of new brands to with different cultural and aspirational signifiers and value messages to decipher. (After all, how important is a brand's "all-American" heritage if you aren't "all-American"? And how aspirational is it to sport the label "Marc," spelled with the distinctive "c," if you don't know who Marc Jacobs is?) In addition, second-generation Latinos often have access to new opportunities and new experiences that their ancestors didn't.

To illustrate these points, a first-generation Latina respondent recently shared the story of how she made her first significant jewelry purchase decision. She has been fortunate enough, she explained, to earn more money by her mid-thirties than her father made in all of his working years - which allowed her access to new opportunities, such as indulging in a luxury jewelry item. She consulted with friends and family for recommendations. While her U.S.-born friends didn't hesitate to name brands they had always aspired to own - Tiffany, Movado, Cartier, Harry Winston - her father questioned each suggestion. Some names were unfamiliar, and he didn't relate to the aspirational positioning. In that case, the respondent was essentially "unbranded" with no loyalties passed down through the generations.

"Essentially, there is an untapped market among Latinos," says Gerry Rojas, partner of Estudio201, a New Jersey-based lifestyle and experiential agency. "There aren't enough brands reaching out to Latinos who still haven't been targeted, spoken to, in a relevant way." As they seek their own brands, this "unbranded" segment of Latino consumers is hungry for information to help them find products and services that work best for them, to discover what best fits their personalities and unique needs.

"It's new information to them, and they want that info," Rojas says. Using himself as an example, he says, "Growing up, I watched 'Sabado Gigante' with my parents. That's just what it was. But when I discovered 'The A-Team,' 'ALF,' 'Magnum P.I.,' do you think I was going back to my mother's novellas anymore? From then on, I began to discover my preferences on my own initiative. I created my own loyalties."

For marketers, these experiences represent opportunities.

1: Communicate your brand message and essence in terms of Latino cultural. Latinos tend to seek brands that address their values. Keep in mind that, according to a Yankelovich study, quality, convenience and emotion are the top three reasons Latinos select a brand.

2: Create authentic and culturally-relevant brand experiences. The more acculturated segment considers themselves both American and Latino. Marketing efforts should reflect their unique bicultural identity. Also, make the first experience a superior one. A negative experience will only make them more loyal to another preferred brand, Lopez Varela points out.

3: Develop a new relationship. Court this segment like a brand new consumer and develop a brand relationship in the early stages of acculturation. Rojas reiterates the importance of devising a plan with multiple touchpoints to solidify the relationship.

4: Focus on retention. "Latinos, in general, like harmony, avoid conflict, and minimize change. When Latinos find a brand they like, they become advocates of the brand, especially when the quality and value meet their expectations," Lopez Varela says. "They are even willing to spend a little more if they perceive the brand to be a good value."

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