Despite spending $660 billion last year, one group -- the approximately 15.3 million people who make up the gay, lesbian, bisexual, and transgender (GLBT) community in the United States -- was largely ignored by marketing campaigns aimed at much larger, less lucrative demographics. A small portion of the overall population, yes. But one that companies should pay attention to because of their spending power and product preferences.
The report found that gay consumers were more likely to keep up with the latest styles, purchase luxury items, and spend money on travel than their straight counterparts. When asked about brand loyalty, they cited price and convenience as the most important factors in their purchase decisions, ranked over selection, quality, and promotions. The gay community is also more likely to trust brands that have a reputation for treating all employees equally and welcoming a diverse group of consumers. For example, the ultimate question for gay travelers when deciding where they should go on holiday is "Can we hold hands in public there?"
Surprisingly, gay consumers indicated they were more likely to respond to ads that appeared in both mainstream and gay publications, even more so than to ones only appearing in gay-themed newspapers or on television channels. Not so surprisingly, a similar study conducted by Witeck-Combs and Harris Interactive found that two thirds of the GLBT community is loyal to brands that have a gay-friendly reputation, even if they have to pay more for these brands. In the past year 24 percent of those consumers have switched products because they found a company closer to their values than the one they were buying from previously.
Both studies should remind companies that every aspect of business, from advertising to corporate responsibility to employee management, affects customer perception. The examples below show a few ways businesses are trying to capture some of the spending power of the gay community, which is expected to increase by nearly $200 billion in the next three years.
Rewards at the end of the rainbow Many mainstream companies connect with gay consumers by designing special programs or promotions that appeal to them. Bank of America and American Airlines have "rainbow" programs targeted at the gay community to recognize its unique interests. Bank of America offers a special credit card that earns charitable donations instead of airline miles or cash back. Every time someone using the card makes a purchase, approximately 10 cents goes to the Rainbow Endowment, which provides grants to charities supporting the gay community. American Airlines, the first airline to offer domestic partner benefits to its employees, has a separate Web site for gay consumers. The site, www.aa.com/rainbow, contains travel offers related to gay-themed events around the world, partnership information with companies like Wyndham hotels, and special offers to enroll in its loyalty program.
Look closely for the difference With the increase in publications aimed at gay readers and viewers, marketers have an outlet to test advertisements targeted at that relatively small group of consumers. Typically that meant overdoing the differences between the gay community and the rest of society, but increased acceptance of gays in mainstream media has led to ads with similar messages for both groups. Over the summer, for example, Levi's debuted a television campaign showing a man putting on a pair of jeans, which causes the street level of his city to rise up into his apartment. The ad featured two different endings. At the end of the first ad, which debuted across the major networks, a woman in a telephone booth smiles at the man. At the end of the "gay" ad, which ran on channels like Logo, there was a smiling man in the phone booth. Levi's has said it also plans to run the ad targeted at gay consumers on other cable channels that don't have a traditionally large gay audience.
Corporations embrace acceptance As companies are realizing the revenue potential of the gay community, the number of employers responding to the different needs of gay, lesbian, bisexual, and transgender workers has increased dramatically. For the sixth year in a row, the Human Rights Campaign Foundation's report on corporate equality found that more businesses are promoting tolerance in the workplace. Five of the 10 top-ranked
Fortune 500 businesses received a perfect score from the Human Rights Campaign, which measures GLBT awareness in benefits policies, advertising, corporate giving, and training programs. Other key statistics from the report include:
- Hotels, resorts, and casinos received the highest industry average score (97)
- Banking and financial services firms and law firms had the most representatives with perfect scores (32 and 30, respectively)
- A majority of companies now forbid discrimination on the basis of gender identity alongside sexual orientation