These services not only have a handle on cultural nuances and say they can educate clients on spending habits but also wield a value-added asset: a database of consumers that is often complicated for a marketer to develop on its own.
Services such as New York-based Nia Direct, need to understand the clients as well as the consumers if they want to realize a worthwhile response rate in the Hispanic community, says Cristina Benitez, president of Lazos Latinos, a Hispanic marketing consultancy. "Direct response is a comfortable way of relating to Hispanics because you're not put into a situation where you're feeling intimidated by a salesperson face-to-face. It's very non-threatening."
RESPONSIVE TO DIRECT APPROACH
According to recent Hispanic consumer data Ms. Benitez has collected, 72% of Hispanics always read their direct mail and 66% respond. "One reason is because they receive fewer pieces than the general market-only about 10 pieces a year," she says.
As advertisers recognize these consumers' desire to receive more mailings, agencies such as Nia and Greenwich, Conn.-based Madison Direct Marketing are expanding their offerings.
Nia, which brings marketers into 3 million African-American homes annually via cooperative coupon packs and other direct mail promotions, plans to launch a Hispanic division this spring using a database-crunching formula similar to the one it applies to African-American consumers.
Nia Direct culls names and information from lists provided by African-American fraternities and sororities, churches and other non-profit organizations and runs them against data from the Bureau of Labor Statistics and U.S. Census Bureau.
Collecting names from non-profit organizations is a proven tactic for the Hispanic market, as it has worked for direct mail campaigns produced in-house at Essence Communications' Latina, says Publisher Christy Haubegger.
"We rent all kinds of lists," she says. "Other advantages to the Hispanic market is that we're so geographically concentrated, we can do it by ZIP codes and last names."
Nia goes beyond ZIP codes.
"I also do a lot of regression analysis," says Andrew Morrison, founder-president. "I look at current responders to African-American direct marketing programs and build a profile of those individuals. [Then] I go out and find similar consumers and match the data."
Mr. Morrison says to get at oft-guarded non-profit mailing lists, he offers free advertising and consulting to the organizations.
Mr. Morrison found marketers such as Kraft Foods and J.C. Penney Co.-which frequently advertise in general-market coupon packs-were willing to try targeted cooperative mailings once he explained the buying habits of the African-American consumers available through his database.
He began strategizing and consulting for companies, designing envelopes that featured images of African-American families, which told recipients the contents were meant for them.
"Rule No. 1 is to get people to open the envelopes," he explains.
"Nia Direct offered a good opportunity for us to go after the African-American segment through home delivery," says John Donaldson, VP-marketing for Penney's Lifetouch Photography unit.
Mr. Morrison encourages his clients to include coupons and information on products they know African-American consumers buy rather than use direct mail to cultivate a whole new audience. He also tailors proven marketing tricks to his audience. For example, he may offer as first prize in a drawing a more meaningful trip to Africa instead of a vacation in Europe.
He is increasing the frequency of his African-American mailings to 12 times a year from four times a year. Clients asked for increased mailings because quarterly ones missed key promotional periods like Easter.
Hallmark Cards received higher than average response rates when it sent a promotion in a Nia Direct mailer. One reason it hasn't used Nia more is the quarterly mailings misses key holidays.
Kimberly Newton, marketing manager for ethnic business at Hallmark Cards, says with Nia's previous schedule the greeting card giant would have to send out Father's Day promotions for its African-American-geared Mahogany card line in the same pack with Mother's Day promotions.
A recent Hispanic mailer is an example, Mr. Morrison says, of a movement to accommodate clients with growing Hispanic divisions.
Essence, which tried a mailer with Nia Direct for its Essence magazine's circulation, has a test mailer scheduled in the upcoming Hispanic pack for its Latina.
"You have to be able to counsel your clients on which products will work within each market, and which won't," says Mayra Rocafort-Mercado, director of direct marketing, Bravo Group, New York.
For example, she says, quick-cooking rice products don't market well to Hispanics and would not be a wise choice for the mailers.
As the Hispanic population continues to boom, marketers will be paying close attention to micro-niches within that consumer group.
That bodes well for Madison Direct Marketing-a Nia competitor-with an expertise in reaching Hispanic families. Ten years ago, the agency launched a coupon pack targeting 275,000 Hispanic families with children younger than three. Last month it expanded its mailings to 1 million to include families with children under 18.
The shift was prompted by a change in client needs, says Bruce Gold, exec VP at Madison.
"Instead of the first budget to be cut, companies are now saying they want a