|Lexicon targets hard-to-reach Hispanic immigrants for its $1,500 language course.
A direct-marketing phenomenon that runs catchy direct-response ads starring celebrities such as Placido Domingo every 15 minutes on Spanish-language TV, Ingles Sin Barreras turns hard-to-reach low-wage Hispanic immigrants with little or no credit history into loyal customers for a pricey $1,500 multimedia language course.
A club for marketers
Now Lexicon is offering that direct-marketing expertise to other marketers with the launch this month of Club Sin Barreras. Karissa Price, Lexicon's director of marketing and corporate development, said that everyone who calls Ingles Sin Barreras -- about 2,000 people a day -- will be automatically enrolled in Club Sin Barreras. Marketers can participate in mailings, have their products offered to callers, and be included in a Club Sin Barreras catalog that will drop about 1 million copies in September.
Ms. Price said Club Sin Barreras has already signed up DirecTV Para Todos and Time Warner's People en Espanol, and will close deals this month with financial services and telecommunications marketers. Katherine Friedman, People en Espanol's manager of partnership development, said the magazine is entering a partnership with Club Sin Barreras, starting with a trial subscription offer in the upcoming catalog.
Lexicon may also buy products wholesale and sell them through the Club.
"Last year we tested a cookware line," Ms. Price said. "And there's huge demand for Spanish-language DVDs and jewelry."
Sales top $100 million
Lexicon's sales will top $100 million this year, up from $65 million two years ago, she said. The company's colorful founder, an eccentric Chilean immigrant named Jose Luis Nazar, sold a large majority stake last year to a San Francisco-based venture capital firm called Golden Gate Capital. Mr. Nazar was described in a newspaper profile before the sale as a wine enthusiast who "likes to open champagne bottles by slicing off their necks with a Napoleonic saber."
Lexicon handles all its own advertising production, planning and buying.
"We create our own commercials, buy our own media and do our own customer service and collections, and 99% of our employees are Hispanic," Ms. Price said. "One key to success is we finance the purchase."
Customers usually make a $200 down payment, followed by 12 or 18 monthly installments. They may not have a Social Security number or a bank account or a credit history. About 85% of the 50-pound, 12-volume sets are dispatched cash on delivery. About 25% of customers don't pay up.
'A lot of handholding'
"We do a lot of handholding to make the process work," Ms. Price said. "It's a flexible credit model. If you don't have a down payment, but you have five cousins who are willing to claim you, and a job, you can get financing."
"They've adapted to the customer and developed what works for them," said Michael Saray, president of Michael Saray Hispanic Marketing and chairman of Directo, the DMA's Hispanic council. "It's a great success story."
Marketers who sign up for the new Club Sin Barreras are getting access to people who are aspirational and definitely speak Spanish, which can be hard to determine from some mailing lists, he said. "That's a pretty neat database."
Plent of ads for $15 million
Ingles Sin Barreras is the most-advertised brand on Spanish-language TV, slotting in commercials every quarter-hour between 7 a.m. and 4 p.m. Taking advantage of frequency discounts and off-peak rates, Lexicon spends just $15 million a year on ads, Ms. Price said.
Commercials, especially celebrity testimonials, celebrate the importance of improving your life by learning English. One spot starring Placido Domingo ends with his own money-back guarantee: "Tell them Placido said you can return it."
In one commercial, an Anglo boss says in accented Spanish, "Of all my Latin employees, those who speak English are the most successful. If I were Hispanic, I'd invest in Ingles Sin Barreras."
In a new creative strategy, a spot breaking next month stars a cat and a dog. As an intruder tries to break into their house, the cat goes to the door and scares him off by barking ferociously. The tagline: "You never know when speaking a second language will be useful."