by Claudia Havi Goffan
A close look at how Cultural Differences impact Customer Acquisition and Retention Strategies.
When I arrived to the U.S., 18 years ago, I opened a checking Account with Bank of America. It was obvious. The name, Bank of America, carried in it a familiarity that no other bank did. I, too, was born in America, the continent of America. What people do not know is that in Latin American schools teach you that America is a single continent divided into three parts, North, Central and South America. This is the reason that you may have heard Latinos say: “we are American too.” Back to my story, Bank of America, one; other banks, zero.
A few months later, and having maintained what I thought was an excellent relationship with the bank, I decided to fill out an application for a credit card, “the Bank of America VISA.” After three long weeks, I received a letter stating that my application had been denied without a reason given. I got really upset and went to the bank to let hell loose. I had been a wonderful customer and had more than enough money in my account—and they knew it- in order to respond to whatever spending limit they could give me. The answer was: “You need to call Visa, we (Bank of America) don’t have anything to do with this.” I immediately called Visa and was told that my request had been denied because I didn’t exist. “Didn’t exist? But here I am, I exist,” was my response with utter disbelief. The lady explained that I didn’t have a credit history. Until then, I never knew a credit history existed. No such concept existed in my home country where people purchase a home with cash and they don’t pay their bills with checks, as they will get “lost” in the mail (but that’s a different story and the beginning of more cultural differences). In the end, I realized that I wasn’t going to get my credit card with Bank of America or VISA. What a disappointment. And, what an insult to tell me I didn’t exist.
I decided to fill out an application with American Express. Two weeks later, a person from American Express called me at home and wanted to know why they couldn’t find any credit history on me. Now, that’s service! I told her I had lived in the U.S. for just a few months. She replied: “Perfectly understandable. You will receive your card in the mail within 2 weeks.” Needless to say, I never forgot my experience with VISA or with American Express. I have been a loyal customer of American Express since 1991, always preferring to use my AMEX to any other credit card.
Lesson to be learned: Listen to your customers. Cultural differences may be found where you least expect them. You may get lucky the first time, the second time around, you’d better know what you are doing.
A bit of background on the Latin American financial system
The concept of a credit history was introduced only a few years ago in Latin American countries.
There are financial infrastructure obstacles common to the Latin American region, such as uneven income distribution, low penetration of the banking system, low computer usage, and very famous “informal” economies that function only in cash. Remittances from family members abroad only increase the number of cash transactions.
The banking crisis of Argentina, Brazil, Chile, Colombia, Mexico and Venezuela in the late 1990s enabled a large financial reform and the modernization of the financial infrastructure. One of the changes was the adoption of credit history.