BrainTrust Query: Hola Loyalty – Meet Valoramás
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
When I started my work studying Millennial marketing back in 2005, it seemed that nearly every conference I attended had a session on “Marketing to Hispanics” or “Serving the Underbanked.” Topics like this were often perceived as gratuitous additions to the agenda as few market examples were available to share and fewer in the audience were tasked to find solutions to these narrowly defined “problems.”
Living near Miami and having traveled Latin America for the previous 10 years, I knew better.
Over the past twenty years I’ve witnessed an insulated, mostly Cuban community in Miami become a diverse assembly of Latin American diaspora which has increasingly adopted American language and culture. At one point in the nineties, marketers might have agreed that simply translating traditional advertisements and offers into Spanish would be sufficient to get results. Now, it’s truly difficult to discern which people prefer to speak first in English, first in Spanish, or those who comfortably blend the two into “Spanglish.” If you can get the targeting right, the task remains to craft a message that will connect with each group.
At the same time, loyalty marketers have been trying to find the right formula to create a coalition loyalty model that works in the U.S.
Valoramás.com may an answer to both questions. Valoramás is the “first of its kind online bilingual rewards program.” It’s also effectively a coalition loyalty program that serves up a great solution for “marketing to Hispanics.”
Members pay a $25 annual fee to become part of the community. By shopping online across almost 2,000 retailers, members can earn cash back rewards that average more than five percent of purchase amounts and can range as high as 57 percent. In the process, members support the Latino community by generating donations for a selected set of charities supported by Valoramás and its members.
OneBigTent, LLC, the parent company of Valoramás, has aligned itself with a group of business partners that includes República, Marketing Strategists, FreeCause, Inc, Reward Paths, TransNational, and Miller Cooper & Co. Pledging to give back more than half its annual gross revenues to members and to organizations making a difference in the Latino community, OneBigTent states on its website that “giving back is the highest form of citizenship.” Funds will be allocated for schools, scholarships, job training, community centers, the arts, and health care.
Valoramás might be the most effective effort to date to bring Latinos together in support of their interests and communities. It’s also a worthy example of social giving and, we hope, a boon to the Latino community in the U.S.
In the process, marketers will have a venue through which they can finally capitalize on a solution for “marketing to Hispanics.”
Discussion Questions
Discussion Questions: What do you think of Valoramás as a Hispanic coalition loyalty program? Will success with Valoramás spawn other so-called “niche” loyalty marketing coalition programs?
Why shouldn’t there be a loyalty program targeted to Hispanics? There are programs targeted to many other groups. NextJump has made a business of building walled online malls for business and affinity groups.
The key will be how many people will fork over $25. If the discounts are significant and the variety and selection of retailers large enough, Valoramás could succeed.
I don’t get it — the concepts of “niche” and “coalition” don’t go together very well. One implies tight focus and the other is broadly inclusive. Personally, I strongly favor the latter over the former. I would rather see a very broad coalition program that includes many retailers that are not necessarily associated with Hispanic-oriented products/services.
Trying to zoom in on the unique needs/characteristics of an ethnic subgroup is a difficult exercise (at least to do it well), and efforts to keep the coalition program focused on that group will lead to its failure.
I’m not certain how to respond to this story, because I don’t share heritage with members of the broad, Spanish-speaking coalition that Valoramás is trying to represent. Here’s a try anyway. I hope it doesn’t reveal a great ignorance on my part.
Do Cuban-Americans, Mexican-Americans, Puerto Ricans and others feel themselves to be part of a larger cultural community bound by common linguistic heritage? If true, then this is an important development.
Then again, marketers routinely divide English-speaking Americans into finer demographic groupings, based on national origins, relative income levels, race and even religious and political beliefs.
If Spanish-speaking recent Americans mostly identify as part of a common group, then Valoramás has great potential. For me, the simple fact of Hispanics’ varied origins says they cannot possibly be uniform in their needs, beliefs, preferences and behaviors.
As you can perceive, I’m a worrier at heart. In this instance I worry that by lumping various Spanish-speaking Americans together, we create and propagate a demographic fiction.
While on surface, the concept sounds like it’s checking off the right elements, I see several issues that can affect its success:
1. Online implies a bilingual Hispanic which is likely comfortable going online for these types of offers, and any Hispanic used to going online is exposed to the myriad of online discount sites which have become very well known and which are FREE.
2. While Hispanics are community and socially oriented, charitable giving or gifting is mostly directed at the church or disaster relief efforts especially when their country has been affected. I have studied this in depth and Hispanics are even more skeptical of giving to organizations with which they are unfamiliar. I’ve researched charitable giving behavior for a couple of non-profits, 8 years apart and attitudes haven’t changed much.
3. Hispanics are still hesitant about providing their credit or debit card information to buy online. However, if the program gave them a credit line to purchase, that is a huge incentive.
4. Touching, feeling, trying on, and smelling is still a need Hispanic women have before making a buying decision. Additionally, my consulting work for catalog companies indicates a huge concern over return logistics and associated costs.
5. The Hispanic online or offline, first-generation mom simply isn’t as responsive to cash back, points, or promotions as an incentive for patronizing a program or retailer. I have many stories from companies which have reached out to Hispanics with their store rewards programs with less than optimal success.
I wish them luck, but I think Valoramas is stepping over some very important value, attitudinal, and behavioral factors in the design of their program that will impact their success.
Attempting to address a few of the questions raised by contributors:
1. Charging a fee for any rewards program requires courage these days. Best Buy started with a fee and relented upon first year renewal. Barnes & Noble charge(d) a $25 fee. Self selection is encouraged in these situations.
2. I know we may be debating syntax, but in the lingua franca of loyalty marketing, “niche” and “coalition” can indeed go together. Experience has shown a broad coalition is tough to execute in the US.
3. Though Hispanics are linked by language, they often debate among each other whose accent and grammar is “better.” The cultural link is the strongest one and it is distinct and valuable to preserve.
So good to hear Terry Soto’s voice again. I endorse her comments and those of Jamie Tenser, and would like to amplify a bit in a possibly politically incorrect way.
In my school exercise program work with Hispanics in California’s Central Valley, I learned many things about the group that were new to me — too many to list here. But this one may apply: Our program was sponsored by a supermarket chain, and Hispanics shopped there from time to time. However, they traditionally frequented local bodegas, meat markets, and produce markets more often. A loyalty program specifically aimed at them would not have done well.
Hispanic markets for many other product categories also proliferated in the area, and I wonder if that is also true in Florida, where Valoramas seems to be focusing initially. For instance, while Starbucks does well in FL, Latinos generally gravitate to small shops where Cuban coffees are served.
I hope that Valoramas is successful, more so than the success rate of most loyalty programs. But I also caution that the lofty goals of diversity efforts often encourage division. Too often, I fear, diversity = division.
This program is a fascinating experiment in balancing Hispanic consumers’ needs for value with their affiliation for their local community. Remember, as time goes on, an increasing percentage of the Hispanic community begins to resemble the larger community in attitudes and behavior. At the same time, there is a desire to maintain heritage and continuity, which creates a tension.
If this program is able to provide a competitive set of offers and values, and also speak to the issues of heritage and continuity, then I believe they can succeed.
I am not sure if the Hispanic community is easily replicable to other niche markets. The size of the Hispanic community combined with strong affiliation and a desire to maintain heritage makes the Hispanic community a large, valuable target for marketing efforts. Other niche markets may have similar characteristics but be too small, or be large and lack those unique affiliations.
We are excited to read all your comments about Valoramás and would like to provide clarification regarding a couple of points raised in the comments.
Valoramás rewards members while engaging, inspiring and making a difference in the lives of its members, their families, and in the Latino community.
Through the Valoramás web portal, our members are able to purchase more than 9 million products from almost 2,000 major national retailers, as well as exclusive deals, and earn significant cash back on every purchase. In addition, our members enjoy exclusive content such as online chats with notable Hispanic leaders, in addition to blogs, videos, and tutorials.
We are honored to be a part of the hopes, needs, dreams, and challenges facing the Latino community. Valoramás gives back a significant portion of our revenue to organizations making a difference in the Latino community. Currently we are launching a $150,000 Valoramás Founders’ Grants Initiative in Chicago and Houston.
Numerous sources, including eMarketer, Scarborough Research and ComScore Networks have detailed how Latino Internet users and shoppers are growing – by 2014 Latino Internet users are projected to be approximately 39.2 million and Latino E-Commerce Shoppers 25.5 million.
Our goal at Valoramás is to create a member experience that is based on the richness, unique voices, cultural nuances and levels of acculturation of our varied Latino/Hispanic experiences.
We look forward to our continued dialogue with you and others. Thank you for your well wishes.
I think this is a great example of how ‘niche’ or nontraditional thinking when it comes to marketing can really extend beyond just blasting the standard marketing message. Through creating a community, Valoramas still manages to send rewards for purchases, but as almost a byproduct of bringing people together.
I wonder how their social media plays into it all?