A state of the art paper on VoIP services Telecommunications

Over 43 million Hispanics lived in the United States in 2004 according to the U.S. Hispanic Synovate Report. The Hispanics in the U.S. are the second largest Hispanic Market, following only Mexico, and continue growing at outstanding speed, with a prediction by the U.S. Census Bureau of 29% growth in the following 8 years. This market also enjoys one of the highest disposable incomes amongst minorities. According to the University of Georgia’s Selig Center for Economic Growth, the purchasing power of U.S. Hispanics will reach $863 billion in 2007.

Much of the growth of the Hispanic population size is in the form of second and third generation Hispanics, but a considerable part of it is still directly related to the continuous immigration from Latin American countries. The U.S. Census Bureau estimates that immigrants in the U.S. grew from 19.8 million to over 30 million, between the years 1990 and 2000, with Hispanics accounting for over 50% of those figures . Nevertheless, it is known that these numbers reflect only an estimate due to the reticence of undocumented Hispanics to complete census forms. The number of U.S. Hispanics is much larger in reality when considering this group.

Hispanics in the United States are in all levels of integration, depending on many factors like their length of time in the U.S., their education level, and their age amongst many others. Although a great number of Hispanics are very much acculturated and have adapted comfortably to change, most still maintain close involvement with family and friends in their country of origin, even after years of distance, especially those who were born outside of the U.S.

An activity that shows this strong connection is the increasing flow of remittances regardless of the stability of U.S. economy. From 2002 to 2005 remittances increased by over $8 billion, according to a Pew Hispanic Center report, which also recognizes that this is only an expression of the powerful attachment between immigrants and the people they have left behind.

Another evidence of the importance that staying in touch with their loved ones is the heavy use of international calling cards amounting to over 50% of this product’s consumers. According to DigiLinea’s research more than 44% of all U.S. outbound calls are to some country of Latin America.

So then why haven’t Hispanics jumped on the benefits that Internet offers as a means to communicate through distance?

Although Hispanics are starting to adopt the Internet at increasing rates, a gap still exists when compared to non-Hispanic whites. Many factors are involved in deferring the embrace of Internet by Hispanics such as the difficulty with English language and socio-economic characteristics, but a very important element involved is that Hispanics do not use the Internet the same ways that mainstream consumers do. Their motivations for accessing Internet are too different and they should not be targeted the same way. When Hispanics realize that Internet technology can help support family ties they will be more open to their use. The adoption can occur much faster if Hispanics clearly see the Internet as an efficient way of communication.

Voice over Internet Protocol, or VoIPs might certainly prove to be the motivation needed for Hispanics to embrace the Internet. These broadband phone services have a great potential to succeed by providing consumers with affordability to an otherwise very expensive service.

If the providers are able to present their services appropriately and relevantly there is no reason why they could not penetrate the market successfully given the high potential.

Relevant Trade and Academic Literature

A gap exists in the use of Internet by Hispanics and other groups in the United States. Although this gap is a reality, the racial digital divide is continuously decreasing and Hispanics are beginning to pay attention to VoIPs. On one hand, the overall Hispanic Market is becoming younger, more acculturated and more affluent and is incorporating these services even more. On the other hand, VoIP providers are starting to realize the potential in the Hispanic Marketing and are increasingly responding to their needs. Following, information about what influences the use or non-use of Internet in the U.S. Hispanic population will offer a better understanding on where the market stands. Also, a review of how VoIP providers are starting to notice the Hispanic market should provide some insight as to what is being done in an effort to attain this market.

Focus on people

According to the Pew Hispanic Center Latinos Online report, English proficiency of Hispanics is possibly the factor that most influences Internet use independently; in many cases this factor alone provides more predictability of online behavior than any other. Internet use is fairly constant within language proficiency groups regardless of nativity, education level, income and other important variables.

Another important fact about the Latino community in the U.S. that the report touched upon is that many of those who do not have Internet are likely to have a cell phone. This not only indicates that many Hispanics without Internet have purchasing power, but also that some are choosing one technology or the other. This is an important fact, for knowing cell-phones are competitors to Internet can shape the messages directed to Hispanics.

It is also important to be aware of the young U.S. Hispanics are consuming Internet at continuously increasing levels, since the U.S. born Hispanic population is growing at tremendous speed outpacing immigration growth rates. Research by eMarketer estimates that the 9.1 million of Hispanics under 35 that were on the Internet in 2005 will become 12.1 million by 2010.

Focus on Companies

Although scant information is available about these companies and their advertising initiatives for the Hispanic market, efforts to reach these consumers can be observed through behaviors and adoption of services amongst others.

DigiLinea

DigiLinea is the leading provider for VoIP infrastructure in the U.S. Hispanic market. The service targets only the Hispanic market, both in the United States and Latin America. DigiLinea properly routes calls through its network in Latin America having a great variety of possible call destinations.

Digilinea is one of the few VoIP providers that use Spanish before English. Although the site can be viewed in Spanish, English and Portuguese, it opens up in Spanish instantly establishing that this service is designed for Hispanics. This seemingly trivial detail can prove a real difference with Spanish dominant Hispanic consumers who can feel understood and not alienated. As noted earlier, English is one of the main factors keeping Hispanics away from Internet connection.

DigiLinea ran a promotion on Yahoo en Español and further marketed itself through press releases in both languages. The website has a link to news and press releases that feature DigiLinea about things such as new products or offers. DigiLinea also implemented a Spanish language Network Operations Center and a Customer Support center for its clients. This is a particularly useful option for Hispanics who are not experienced in this service category and are many times unable or apprehensive to speak English. A telephone costumer service option permits costumers who have inquiries about the services to obtain information in a culturally relevant way.

Digilinea has services particularly attractive for the Hispanic market, such as DigiNúmero, a service that gives the consumer a phone number from their origin country. This product is unique and extremely marketable to U.S. Hispanics for 2 reasons. The first one is that United States residents can receive phone calls that cost Latin-American residents the same as a local call. Secondly, Internet access is not needed in order to make or receive calls.

Receiving calls from their country of origin is something that U.S. Hispanics in general are not used to. International calling is extremely expensive in most Latin American countries and in general the Hispanics residing in their countries of origin have much lower spending possibilities.

Not having an Internet connection in order to make and receive phone calls is also a great benefit since many of the U.S. Hispanics that spend money on international calls do not have it. This issue has only been addressed in part since subscription and payment must be done online.

Skype

Skype is enjoying an advantaged position over other providers at the moment due to a hype created virally amongst consumers. Although the service provider has somewhat experimented with radio ads, Skype emphasizes its marketing strategy through promotions and guerrilla marketing. Several of these efforts are directed specifically towards Hispanics, mainly Mexicans.

In July of 2006, Skype allowed free calls to Mexico for 48 hours in a promotion under the name of Skype Days of Summer, with a weekend of free calls for the three major international call destinations. The initiative successfully introduced the product and its value to the Mexican segment of the Hispanics in the U.S. and created a buzz and awareness amongst Hispanics in general.

Another attempt to enter this market is the partnership of Skype with Digilinea on March of 2007. Teaming up with Digilinea enables Skype to offer local numbers in Latin America as well as unlimited calling plans, better adapting to the Hispanic markets interests.

Skype is doing the right thing by looking after the Hispanic market but still has much room for improving the way to reach this consumer.

An element that Skype is not providing and is of extreme importance within the Hispanic market is the personalized service to consumers. Skype.com does have a Spanish version of its website but does not make available a costumer service number, for any questions not dealt within the website a message has to be sent to an anonymous. Hispanics appreciate having a real person to speak with rather than obtaining information electronically. The absence of this feature is particularly harming in the case of a new service like this, where Hispanics are likely to be thirsty for information. Skype must realize that having a highly sought-after service is not the only thing needed to succeed amongst the Hispanic market. As Korzenny & Korzenny noted in Hispanic Marketing: A Cultural Perspective, understanding the consumer and identifying their needs, not only in relation to the product but also in the way consumers are dealt with, are absolutely necessary elements to create a relationship between brand and the market.

According to Quantcast.com, Hispanics visit Skype.com more than any other ethnic group, with the exception of Asians. This indicates that Skype is being successful at attracting Hispanics into considering its offers, possibly because the services are of value to this market. Another significant statistic of this website is that 64% of the audience is composed by passers-by. Although no information on what proportion of this group is in fact Hispanic, the number could be significantly reduced if the site was designed in a more culturally relevant way.

IUSAcom

IUSAcom launched VOXmex, a VoIP service targeting primarily Mexican immigrants in California and Texas. The provider has 25 cities in Mexico amongst their options to select a phone line to call from and obtain local rates. The payment systems allows costumers to pay though the website with their credit card or by buying pre-paid cards with an access code that must be given through phone to activate the account. These cards are sold at any Office Depot and are very useful due to the fact that they are very similar to “calling cards”, a very common method for long distance phone calls amongst Hispanics. An advantage of having the consumer relate the service with a calling card is that many Hispanics consider them a frugal expense according to the 2006 Hispanic Markets Consumer Report by the Statmark Group of Miami.

This is also an important offering since the numerous undocumented immigrants who do not have credit cards are still able to obtain the service.

The website is only available in Spanish and features a visible “Atencion a Clientes” sign at all times with 1.800 numbers. The “frequently asked questions” page addresses issues not commonly addressed in mainstream FAQs but that might be of use to Hispanics with low levels of knowledge in technology. Examples are questions such as “what is broadband?” and “is this the same as speaking though Messenger?” a popular instant messaging network amongst Hispanics.

ISN Telcom

IpFONE, ISN’s VoIP service is one of the main VoIP services for U.S. Hispanics who wish to communicate to South America. Based in Miami, it is not surprising that what ISN began offering in compensation for its higher cost was unlimited calls to some Latin American cities. The plan was launched in 2004 under the name of “Americas Unlimited Plan” and it included unlimited calls to cities in Argentina, Brazil, Peru, Chile and Venezuela for a monthly flat rate. It eventually included cities in Mexico as well. According to Jon Arnold, the VoIP program leader for Frost and Sullivan, the U.S. Hispanic Market is what enables ISN to maintain its price.

Arnold said that the plan is establishing ISN as the first VoIP provider to target the consumer by offering a service tailored to the “explosive Latin American market” and predicted the company would become a market leader.

This company has a Spanish version of their website which differs slightly from the regular one. The Spanish website highlights certain offers that are more likely to be interesting to the U.S. Hispanic consumer but is also more difficult to navigate and sometimes links back unexpectedly to the original English version. The site also provides a costumer service toll free number with the possibility of Spanish speaking agents for questions or problems.

ISN Telcom is currently putting emphasis in the Argentine consumer with a video that opens up instantly in the Spanish version of the website. The video features images such as the Argentine flag and has a male from that country speaking in Spanish telling the consumer about the benefits of the Americas Unlimited Plan. The video and sound of the Spanish language help establish a great connection with consumers and invoke emotional thoughts about home, a particularly useful reaction when attempting to sell a service that is directly related to connecting back home. Even though the video is only featured in ISN’s own website, this can be considered a great advertisement for someone who is only visiting the site. If the person is on the right target he or she is likely to become highly influenced by the images and language and could even be convinced into subscribing for the plan.

ISN Telcom enjoys a growing and loyal consumer base and is becoming the market leader in metropolitan Miami.

Trends and Findings

VoIP services are still developing and in their beginning stages but looking at what they are currently doing as well as the Hispanic market’s relationship with telecommunications, some trends can be pinpointed and some other ones can be expected.

Language

Language is one of the first steps adopted by VoIPs who want to obtain Hispanic consumers. It is imperative for a company that is selling connection with Hispanic countries to offer its services in Spanish. As mentioned earlier, English is one of the main deterrents for Hispanics to access the Internet.

Websites are always available in Spanish and costumer service (if available) usually has the option to a Spanish-speaking representative.

Some of the websites were not only translated but also changed in content to be more relevant for U.S. Hispanics, however most did not.

DigiLinea is a great example, it has pictures of Hispanics and focuses on more relevant information, also, the website opened in Spanish rather than having the typical “En Español” link. This website is also very straight-forward, avoiding confusing options or too many links, an attribute necessary for possible consumers who are not used to navigating the Internet.

Some other websites on the other hand were redundant and did not direct the consumer easily to their most likely points of interest. ISN Telcom’s website in Spanish featured some offers likely to be of interest to Hispanics and had elements specifically added for the Hispanic consumer, but trying to access other information not immediately shown is complicated and the website becomes hard to follow.

On a good note, most companies have a link for “International calls” or “Latin America” to guide Hispanic consumers quickly to their points of interest. Another common link is one to frequent questions that give consumers information about what VoIPs are in general, how they work and how to use them.

Making the website appealing for Hispanics is important as a first step to attract the consumer. With the incredible amount of service options and the availability of information, it is important for the VoIP companies to have easily accessible and understandable information to prevent the consumer to become overwhelmed or distracted. Having a website in Spanish is very important for this reason but it is not the only thing that can be changed, as mentioned earlier, websites that are not only in Spanish but modified in content are the most effective ones.

This particular service category also benefits in a different level when it comes to language. As explained by Korzenny & Korzenny in Hispanic Marketing: A cultural perspective, the Spanish language is tied in with the emotion of the experience being sold to the consumer, therefore the use of the language can not only make the information easier to comprehend but give the message a deeper meaning.

By
Celeste Eberhardt
Multicultural Marketing Communication
Student
Center for Hispanic Marketing Communication
Florida State University

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