Asian Americans have one of the highest levels of education of any demographic in the United States and the highest median level of household income — on average $9,000 higher than Caucasian households. Yet the segment is largely untapped by financial services direct marketers. Direct recently spoke with Saul Gitlin, executive vice president of strategic marketing services/new business for New York-based agency Kang & Lee, on the potential of this market. Gitlin received a bachelor's degree in Asian studies with a focus on Chinese at Cornell, and in 1982 was one of the first three Cornell undergraduates to spend a year as an exchange student in the People's Republic of China. “The U.S. only established diplomatic relations with mainland China in 1979,” he said. “China was a new scene for Americans then.” He joined Kang & Lee in 1997 after receiving a graduate degree in Asian studies from Yale and an MBA from Columbia and spending six years working in sales and marketing positions in China. Kang & Lee has worked with such financial marketers as Bank of America, Prudential, and HSBC. “Asian Americans are shrewd financial services consumers,” he said. “[Marketers] need to arm them to make the very best decisions for themselves.”

DIRECT: In financial services, do you think the needs of Asian Americans are different from those of the general population?

GITLIN: At the top level, they're not different. But there are a lot of characteristics of this community that cause some needs to be emphasized in different ways. There are a lot of uses of financial services that are critical to the Asian-American population. The pursuit of higher education is of paramount importance to Asian-American families. Almost any query of an immigrant Asian family with respect to their financial goals will quickly elicit a response that home ownership is crucial. There are certain financial obligations which may be more prevalent in this population, such as the need to support family or friends back in Asia, or perhaps to support extended families here.

DIRECT: What should financial services DMers consider when writing copy targeting this demographic?

GITLIN: In many cases, [prospects] need more information on specific products. For example, mutual funds may or may not exist in identical forms in [a consumer's] country of origin in Asia. So a marketer of a mutual fund might need to go a little further when speaking to this audience to explain what this product is and build interest.

Fairly recent immigrants often also need much more information about brands than people born in this country. Certain brands that would be immediately recognized by anyone raised [in the U.S.] may not be recognized at all by an immigrant who came here in the last five to 10 years.

DIRECT: Are Asian Americans traditionally brand loyal?

GITLIN: Overall, you could say Asians are brand loyal when they [think] a company is offering good products and services and is uniquely focused on their needs. But having said that, because this is a highly educated and on average affluent population, one must understand that Asians are financially savvy. While they may lack information on brands and specific products, this does not mean by any stretch they are going to be pushovers for the next offer that comes their way. They are extremely careful evaluators of financial services opportunities.

We did a campaign two years ago for a company providing customers a service that would audit your financial services needs and tell you what you need. We [told] the client that when speaking to Asians it should not come across as ‘We'll figure out what you need and tell you,’ but rather ‘We're going to understand what your needs and goals are and provide you with information to help you make the best decision’. The subtlety there was recognizing that these populations are very savvy and will research to death competitive offers to find the one that best suits their needs.

DIRECT: Are many companies doing direct mail targeted specifically at Asian Americans?

GITLIN: The financial services category has exploded in the past few years, as more companies seek to engage this population in a dialogue, having locked on to the market's very powerful income demographic. But most of the activity we're seeing is mass-media communications or at the retail/service point. The Asian mailbox may be bombarded with whatever is going out to the general population simply because they fall on lists where they've been selected on income and other demographic variables. But in terms of Asian-targeted and -focused direct mail, very little is happening now.

DIRECT: Why do you think that is?

GITLIN: Well, the real heavy activity we're seeing in financial services only came on to the scene in the last five years or so. The point of entry for most of these marketers has been to build a presence in the Asian mass media, which is very high profile in some areas of the country and very cost-efficient, because of the lost cost of insertion in print and broadcast. Many companies have not taken the next step to go into the direct mail arena.

In the Asian market, the clear leader in direct mail is the telecommunications category. The first financial services marketer who says ‘I really want to build my competency reaching this population through direct mail’ is going to enjoy considerable opportunity in an uncluttered medium.

DIRECT: What areas show the greatest opportunity for financial DMers?

GITLIN: Asians are extremely entrepreneurial. I just made a presentation to a major Wall Street financial services firm on the small business market. What's interesting to note is that if you look at the top three multicultural segments — Hispanics, African Americans and Asians — Hispanics account for the largest number of minority-owned businesses, numbering about 1.9 million nationwide. Second is Asians, with just under 900,000, and third is African Americans, with just over 800,000 firms. But if you look at the small business environments from an annual receipt perspective, Asians outpace all groups, with more than $300 billion in annual sales. From a small business perspective for the financial services market, there's a clear opportunity for major marketers to speak to this audience.