Ethnic Marketing

How Hispanic Business Owners Are Driving the Economy
by Brenda Hamilton

Last year, it was soaring gas prices. Today the economy and healthcare are AmAmeericans’ chief concern, according to a recent CNN/Opinion Research Corporation poll. Not surprisingly, the top economic issues chipping away at consumers’ peace of mind are unemployment, inflation, the mortgage crisis, a crippling stock market, and taxes.

As our country’s unemployment rate climbs dangerously close to 10%, it’s no wonder the workforce has lost confidence in the American economy. In February 2009, 12.5 million Americans were unemployed — the highest number in 25 years. This sobering reality has Americans afraid that they will be laid off and unable to find new jobs to adequately support their families.

A recent Hewitt Associates study revealed that two out of three employers are looking for ways to reduce the amount they contribute to employees’ healthcare plans. This alarming statistic is coupled with the fact that some employers are even considering discontinuing healthcare benefits altogether to minimize the financial affect to their bottom lines.

This stronghold on the economy affects all Americans, but it is especially felt in the minority community even though minority-owned businesses make up the fastest growing business sector in America. Numbers show that of the 23 million businesses in the United States, three million are Hispanic-owned and they generate an astonishing $400 billion in annual sales, according to a 2008 report by the U.S. Hispanic Chamber of Commerce.

The number of Hispanic businesses in the U.S. is expected to reach 4.3 million over the next few years, accounting for nearly $600 billion in total revenues. But there are still economic woes that this segment of the population feel will affect their ability to grow and reach much-needed consumer dollars. This especially affects California — home to the largest number of Hispanic-owned businesses (700,000 with revenues at $228 billion in 2008).

Ken Macias, the chairman of the California Hispanic Chambers of Commerce, says that the main factors affecting these small businesses, during times of economic uncertainty, are their size and scope of resources. Also, many Hispanic entrepreneurs tend to use their home equity to start a business. This is hardly an option anymore as funds have dwindled due to the real estate and credit crises.

Macias further explains that, in spite of these obstacles, Hispanic-owned businesses will lead California and the United States toward economic recovery.
Now more than ever, you can step up and provide much-needed education, customer service, and overall reliability to growing emerging markets. Adequate insurance coverage is a critical aspect of financial health for American workers, but it is frequently one of the first budget items to be sacrificed when times get lean for businesses. Business owners and decision-makers alike must be educated on the value of voluntary employee-paid benefits and assist employees who are seeking insurance to help cover them if there is a life-altering event like an accident or disability.

Aflac commissioned a 2009 survey conducted by Accelerant Research about small business owners and consumers attitudes on the current economy:
• Although small businesses are finding it more difficult to offer a strong benefits package, they are interested in benefits without direct cost to the company and they are concerned about how employees will cover their expenses if they miss work.
• Consumers without voluntary coverage are more concerned about their finances, job security, and insurance than are consumers who have this coverage.
• Right now, agents and brokers can help ease the burden with business solutions that offer potential tax savings for these enterprises and competitive coverage options for employees in the event of an injury or illness.

Get creative by harnessing one simple idea that can increase business opportunities: Diversify your line of products and services to meet the ever-evolving demands of the marketplace. Consider adding voluntary insurance to your portfolio. This will create a one-stop shop for you and your clients, ultimately affecting your bottom line. With voluntary coverage, employers will have a more well rounded package for employees without the need to research, select, implement, and administer multiple individual providers.

Another savvy business strategy embraces an old adage, “By helping your clients sustain and grow their businesses, you not only expand your business, but you will also build trust and rapport with a great source of future references.” This also can broaden your reach and influence in the fast growing emerging markets. For example, tapping into the Hispanic market will create new business opportunities for you while adding value and business solutions to your clients’ benefit portfolios at no direct cost to their companies. You will have provided value-added services and products that saved them time and money; it’s a win-win solution!

Follow these guidelines to tap into the booming Hispanic market:
1. No Excuses, Just Bring It – Customer service is essential in creating and sustaining a successful business. Do your homework and become familiar with the idiosyncrasies and demographics of your target market to help meet your clients’ demands. This will equip you to provide a wide range of voluntary insurance products and value-added services tailored to their needs. For example, offer much-needed and competitive insurance products like short-term disability, which may be available to businesses with as few as three employees to help protect employees’ incomes. You will address their needs and provide a cost-efficient way to help protect their families against any unexpected health event during a time when people need it the most. Understanding the needs, influences and concerns of your customer will not only build your credibility, but also help your business stand out from the crowd. No matter what your native tongue, excellent service is a language everyone understands.

2. Birds of a Feather Flock Together – Developing relationships is a key component to building a trust bank of loyal customers in any marketplace, but especially in the Hispanic market. Recruit qualified agents who mirror your target market. Bicultural producers should be entrenched in the marketplace, understand the cultural nuances, and know the centers of influence. This can help open doors to new opportunities.

3. One Size Does Not Fit All – Hispanics are diverse not only by birthplace, but also by level of acculturation and assimilation in the United States. It is imperative to have a bilingual full-service suite, from educating employees and taking their coverage applications to handling claims and managing your accounts. Provide solutions that help ease benefits administration for your clients in their language of preference. This will increase your clients’ level of understanding, enabling them to make sound, informed decisions, and ultimately choose your products and services. Also, set up a toll-free line staffed with bilingual customer service representatives. This will position your company as minority -friendly – one that values their business.

Many companies are embracing service providers that offer turnkey voluntary policies, administration, and collateral materials that are bilingual and culturally relevant. To penetrate the Hispanic market, you must integrate personalized customer service with a variety of quality voluntary insurance products and a fully equipped bilingual full-service suite.

Despite what’s happening in the economy, the need for insurance does not change. Disabling illnesses and injuries will still occur. This is why a voluntary plan is such a timely solution as well as an important added value in today’s economy.

Step out of your comfort zone with smart business solutions to capture a piece of the minority market’s $3 trillion muscle power. This is a market that cannot be overlooked. It is time to leverage your company offerings to minority business owners and bring to the table all the necessary tools to ensure that they are in the position to succeed in the new and ever-changing-financial and business environments. They are a vital part of everyone’s new beginnings and stronger futures.
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Brenda Hamilton is Aflac’s broker development coordinator in the Central Valley, Calif. She is a 16-year veteran in the insurance and financial services industry. Since 2006, her primary focus has been developing and managing client relationships with insurance brokers. Additionally, she’s responsible for identifying the needs of the broker and the diverse businesses marketplace.