VERIZON TARGETS MINORITY CUSTOMER BASE

In a speech at the National Hispanic Publishers Conference last month, Eduardo Menascé, president of Verizon Communications' Enterprise Solutions Unit, declared that the RBOC's future is tied directly to Hispanic communities throughout the U.S. He showed that Hispanics spend more than $20 billion annually and are one of the fastest growing segments of Internet users.

“These numbers are getting bigger as Hispanic buying power and population size continue to grow faster than the national average,” Menascé told the assembled publishers. “So when we say your future is our future, it's not an exaggeration, it's a fact.”

With the demographic makeup in the U.S. quickly changing, carriers are starting to wise up about who their customers are. Minorities represent not only massive voting blocks in states such as New York, California, Florida, Illinois and Texas, they're becoming significant consumer blocks that often spend more on telecom services than the mass market.

And it's not just the Hispanic community that Verizon is courting. Verizon and its fellow carriers are seeing the same growth in spending and population size in the African-American and Asian communities as well as the smaller minority groups comprising the cultural polyglot of metropolitan areas.

“I want a customer to see Verizon and say we understand all of the cultural nuances and geographical differences in our customer base,” said Ed Miller, Verizon's executive director of multicultural marketing. “We understand that different minority groups want to communicate differently and have different needs than the mass market.”

While Verizon's territory contains some of the most ethnically diverse cities in the U.S. — including New York, Boston and Washington, D.C. — the carrier's minority makeup is consistent with the national average: 14% Hispanic, 12% African-American and 4% Asian.

But those combined communities spend, on average, 23% more on telecom services than mass-market consumers, Miller said. Hispanic and Asian consumers generally spend much more on international long-distance, Asian customers are much earlier adopters of Internet and DSL services, and African-American customers are among the most avid consumers of enhanced voice features such as caller ID and three-way calling, Miller said.

Not only do they spend more, their ranks are rapidly expanding. In some states, Hispanics have surpassed Caucasians as the single largest ethnic group. For instance, in California minority groups account for 55% of the state's total population.

Verizon has consequently launched aggressive minority and multilingual marketing campaigns in many of its more diverse markets. In New York alone, Verizon markets in eight languages. In addition, it targets marketing campaigns to English-speaking sub-groups, using different “cultural cues” to address African-American, gay and lesbian, and disabled consumers.

Miller, however, pointed out that Verizon's marketing efforts go far beyond advertising in different languages; its sales and support forces are multilingual as well. A Russian living in the New York can call a Verizon customer service rep and expect to hear a Russian voice.

Not only does Verizon market services differently to different groups, it makes specific cultural accommodations for specific minorities. For example, among Chinese, the number four is very unlucky and its pronunciation in Chinese is almost identical to the word “death.” Miller said Verizon's Chinese marketing team tries to expunge the number from all its marketing materials to the point that every call-in customer service and support line doesn't require Chinese customers to dial the number four.

Verizon is definitely on the right track, but there is only so far a major market carrier can go with segmented marketing, said Derek Gietzen, CEO of Vycera, a long-distance provider and CLEC that sells solely to Spanish-speaking consumers in major U.S. markets.

“All the big telecom companies have ethnic marketing departments, but they're always boutique departments,” Gietzen said. “While Verizon has the right idea marketing toward minorities directly, it's still offering the same basic services it's offering the mass market. Different ethnic communities have different telecom needs.”