By Jennifer Reed
ATLANTA (Dec. 21, 2005) — As the U.S. population of Latinos continues to grow, the importance of tapping into this market segment for dealers is climbing, and quite simply, it makes good business sense for the bottom line. However, some dealers may find themselves scratching their heads in confusion, as they need to learn how to accommodate and attract folks from a completely different culture to their showroom to be successful.
To offer some assistance to these dealers, the National Automotive Finance Association hosted a workshop in Atlanta in early December, which honed in on ways to cater to the Hispanic population.
Featured speakers at the event included John ‘Hank’ Held, senior vice president, corporate counsel and assistant secretary for Burt Enterprises; Brian Perry, general manager of Carriage Nissan; and Tom Hudson, prominent dealer attorney from Hudson Cook.
While many aspects of the Latino culture is similar to that of the general buying public, some differences do surface, pointed out Perry, whose business has found ways to profitability reach this market.
One of the first things he mentioned was that word of mouth is very important to Hispanics, especially those from the first generation.
“If one person in a family has a good experience purchasing a car somewhere, then others from that family will go there,” he explained.
Even though Latinos who don’t speak English fluently may prefer to bring a younger family who can along to the dealership, these consumers generally prefer dealing with a salesperson who speaks fluent Spanish.
“It takes a good bit to gain their trust when dealing with a car,” Perry noted. “Generally, a salesperson needs to spend at least an hour gaining a Hispanic consumer’s trust. If you’re going to deal with a lot of Hispanics, then find and hire someone born with Spanish as their first language.”
Speaking in general terms, he cautions that many Latinos may not think it an issue to borrow a brother’s or cousin’s social security number to apply for vehicle financing. So salespeople and finance personnel need to do their best to spot these folks, he recommended.
As Denver has one of the fastest expanding Hispanic populations, Held said Burt Enterprises has made it a primary mission to discover ways to reach this market segment.
“Almost one-fourth of the under-18 population is Hispanic in Denver,” Held told workshop attendees.
He said the Hispanic Consulate and Hispanic Chamber of Commerce approached Burt Enterprises, asking what the company could do to assist Latinos in purchasing vehicles.
First order of business for Burt Enterprises was to learn to value the Hispanic culture.
“We built bigger closing rooms because often a buyer will bring in a 15- or 16-year-old relative during negotiations who speaks English,” he said.
In a PowerPoint presentation to attendees, Held displayed a slide giving an example of the Hispanic customer profile, which included:
— Has cash
— Brand Conscious
— Brand loyal
— Places high value on quality products
— Transaction not solely defined by price
— Strong referral business
— Ongoing service and parts business
— Values building long-term relationship
Looking at what Hispanics value over non-Hispanics in the transaction process, Held discovered that Latinos place dealer financing as the second to top reason for visiting a new auto dealership, while non-Hispanics rank dealer financing as fifth most important.
Since Burt Enterprises’ dealerships are mainly located in the more affluent part of town, a good distance from where the majority of Hispanics live, the organization created a broker company called Burt Automotor, designed to specifically cater to the Spanish-speaking population.
All personnel at this broker company are bilingual Spanish-speaking. Sales consultants are all cross-licensed to sell in a Burt dealership.
“The brokers work their own deals — front-to-back — in dealerships,” Held explained. He said all company signage, documentation and RISCs are offered in Spanish and English.
All marketing for the Hispanic aspect of Burt Enterprises features: “Burt — The Largest Hispanic Dealer in the U.S.” Additionally, the company features the tagline “Tu tienes un amigo de Burt,” which translates to “You have a friend at Burt.”
His company is supported by a variety of Latino organizations such as Univision, the Hispanic Chamber of Commerce and the Mexican Embassy. While the panelist agreed that the usual advertising is not generally successful reaching this demographic, Held mentioned that Burt Automotor has found success by advertising in bilingual publications, in addition to purchasing a media package with Univision and radio.
According to Held, another strong marketing technique Burt Automotor offers is a debit card featuring the company’s logo. This card carries the Visa insignia and has phone card capability so Hispanic consumers can call home to Mexico at discounted rates. It also features the buyers photo, which comes in handy during the F&I process as another form of identification. Held pointed out that the card is a convenient way to make car payments, and a social security number isn’t required to be approved for such a card.
“It provides a second form of identification,” Held said. “A lot of Hispanics don’t have bank accounts, as they don’t trust them, and are cash-based. This is a way for them to store money. It’s also a way to get the Automotor name out into the Hispanic community.”
To prove its trustworthiness to consumers, Burt’s enforces company standards through the development of its own software, which monitors transactions so the brokers cannot take advantage of the buyers.
“You just need to be sincere in what you’re doing,” Held said. “Offer potential buyers letters from satisfied customers.”
He said his company also makes sure all brokers and salespeople are AFIP certified through a program started by GMAC. If for some reason there is a problem with a transaction and the company is taken to court, by certifying its personnel and sending them to class, the company shows it has standards in place. He said the new salesperson or broker pays for the certification and once successfully completed, Burt reimburses him. Held mentioned that Northwood University is currently working on an online version of the certification.
To educate consumers on the financing process and make them feel more comfortable, he recommends that Hispanics visit www.yourpathwaytovehiclefinancing.com, which has a Spanish version. Another good way to reassure Latino consumers is by providing the National Automobile Dealers Association Code of Conduct in Spanish, along with providing letters from prior customers, Held said.
The company even provides a Spanish-speaking insurance agency for consumers who prefer to speak solely in their native language.
Creating an outreach program for the community, Burt’s sends personnel into the local schools to teach Hispanics what is involved in purchasing a vehicle. Held commented that his children weren’t even provided with such a program.
“We take this program out to schools to show the youth what’s involved,” he said. “We’ve had really good receptivity on the part of high schools participating.”
It’s also a good idea to make sure the dealership is very involved in the Hispanic community such as hosting or sponsoring culturally relevant events, creating a scholarship program, promoting the success of Hispanic sales associates and more, Held suggested.
The biggest problem with tapping into this buying demographic is getting lender approval, both Perry and Held agreed. While Perry said he’s found a few lenders willing to work with his business, Held said his company is still searching.
Much of the Hispanic business, when it comes to illegal immigrants, is lost to buy-here, pay-here dealers because the consumers don’t have social security numbers and thus getting financing approved can prove difficult. However, Perry said he’s found a few lenders that accept tax IDs.
“I’ve found two or three finance companies that will lend to people without social security numbers,” Perry noted.
As for the legalities involved with selling to Latino customers, Hudson said there is not a lot of law in that area. He noted that at least 10 states have foreign language requirements for RISCs; however, he said it’s a good idea to provide the contracts in Spanish regardless of whether the state requires it or not. As a rule of thumb, if the transaction occurs in Spanish, the contract should be provided in that language. Additionally, he pointed out that the Buyer’s Guide should also be provided in Spanish.
No matter how prepared a dealer is for dealing with Hispanics, there are always a few surprises, just as with any buying demographic, according to panelists. At least one audience member of Latino heritage concurred, saying he steers clear of selling to Hispanics because they are “just too tricky.”