When it comes to extrapolating background based on names, experts recommend proceeding with caution, as a surname can sometimes be misleading.
There are 28.4 million foreign-born people living in the United States, according to the latest figures from the U.S. Census Bureau. They wield considerable economic clout, collectively earning some $233 billion in annual income. How do you market effectively to these foreign-born consumers?
Various database service providers have been segmenting populations by ethnic group for decades, in an effort to allow marketers to tailor their messages. But it's not always an easy task. Even when marketers drill down to figure out which country a consumer hails from, glitches can lead to misfired marketing. That's what Alexander Lee, a New Jersey resident who is half-Chinese/half-Venezuelan, discovered when he received a Citibank brochure written in Korean. As one of the most common names in the world and also a particularly common Chinese or Korean surname, Lee often confounds marketers.
Matching a country to a name is a long-standing practice among marketers. But now research companies are beginning to refine the process. For one, Geoscape International, Inc., a six-year-old marketing and consulting firm based in Miami, has developed a proprietary model that allows direct marketers to identify a person's â€œmost probableâ€? country of origin. Geoscape's system, called DirecTarget, attempts to help businesses â€œmaximize responseâ€? as they reach out to an increasingly diverse nation of consumers whose ties to their homelands make them strong prospects for direct marketing of telecommunication, airline and financial services, says CÃ©sar Melgoza, Geoscape's president.
When Verizon Communications Inc. began to market long-distance telephone services to New York customers in January 2000, the New York City-based telecommunications company was forced by federal law to build a prospect database from scratch. After renting customer lists that covered more than 90 percent of the households within the target market, Verizon deployed Geoscape's DirecTarget system to identify criteria, including the most probable language of preference and country of origin, to rank the data. The company then embarked on an aggressive English language and multilingual marketing campaign that utilized direct mail, print, TV and telemarketing components.
The result? â€œWe're getting better than our fair share of long-distance minutes of use,â€? says Bernard Huelsman, senior manager of direct marketing at Verizon, citing international calls as a major contributor. â€œWe've gone from 0 to 1.7 million long-distance customers in a year,â€? he says, adding that Verizon has become the No. 2 long-distance provider in the New York state residential market, behind AT&T. â€œThe incidence of mistargeting was less than nominal â€” nonexistent,â€? he says. â€œWe got a high degree of accuracy from the product.â€?
Ethnic Technologies LLC is another company that's working to address some of the challenges associated with name analysis. The marketing services firm, based in South Hackensack, N.J., looks at first names first in order to avoid some of the pitfalls, says Ginger Nelson, president and chief executive officer. While Lee is the most common surname in the world, Latoya Lee would most likely be African American, she says. First names, she states, usually indicate the language group the person belongs to and their ethnicity. The company then subjects surnames to ethnological analysis according to prefix and suffix. For example, surnames that end in â€œogluâ€? which means â€œson ofâ€? are mostly Turkish, she explains. Nelson says her recipe for accurate name analysis is less generalizing and â€œa lot more dig-and-scratch research.â€?
When it comes to extrapolating background based on names, experts recommend proceeding with caution, as a surname can be an imprecise, sometimes misleading identifier of race or nationality. â€œYou can't just take the name in a vacuum,â€? says Peter Morrison, a Rand Corp. demographer who has written about the limitations and applications of surname analysis in gauging a group's potential voting clout. Colonialization and diaspora, as well as marriage, can obscure a person's origins. For instance, an influx of immigrants from non-Iberian Europe after World War II, particularly from Italy and Germany, means some South Americans are not ethnically Hispanic. And while a Spanish surname usually indicates Hispanic ethnicity, not all Hispanics have Spanish surnames. Some, with the last name Matos, for example, can trace their lineage back to Greeks, Nelson says. On the flip side, many Filipinos have Spanish surnames, such as Hermoso, Bacerra or Escober, but are not ethnically Hispanic. Hyphenation of some last names, such as Fong-Torres, adds another level of complexity to the already tangled world of last name analysis.
Alex LÃ³pez Negrete, president of LÃ³pez Negrete Communications, based in Houston, considers names to be a useful starting point. â€œBut it's not the be-all, end-all,â€? he says, adding that language usage and length of residence are vital factors in determining the level of acculturation. On the other hand, he points out, segmenting by country of origin makes sense for certain marketers. Access, exposure and availability of credit and credit products vary in countries across Latin America. Somebody from Argentina, for example, would probably be more familiar with chip-embedded cards than someone from Guatemala, he says. The variation within groups, marketers say, justifies a more individualized approach to targeting. â€œThat's what marketing is about these days,â€? says Geoscape's Melgoza. â€œMicromarketing, one-to-one.â€?