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Risk in Targeting Minority Customers?
We always love hearing from readers about articles we’ve written, whether they criticize, praise, or question us. Recently, a reader submitted a letter about the Trendspotting theme in the Nov/Dec issue of 1to1 Magazine. As an editorial staff we’ve decided that the best place to publish the letter is on the blog, where I can respond to what he said about my story and hopefully turn the topic into a constructive discussion. We’re not in the business to debate social issues, but there is certainly a customer-centric question that comes out of the issue he raised: should companies be concerned that by catering to one group of customers, it risks alienating others?
To clarify, here is the letter we received in response to my Trendspotting story, “A Niche Market With Broad Spending Power”:
"I find it quite amusing that you would advocate going after a very small niche market and risk a chance of offending the vast majority. Ask Ford Motor Co. if the American Family Association boycott is helping their business. Do your research, the majority of Americans are still offended by the homosexual lifestyle and are willing to pull their support should they find out a company is supporting it. With the information gathering tools we have today, there are no secrets when dealing in the public realm!”
Robbie W. (I’ve decided to remove his last name)
Spencer, VA
Let me first put to rest the notion that the research in the story was somehow inaccurate; I invite anyone to look at the reports I cited about the GLBT (gay, lesbian, bisexual, transgender) markets and the companies that serve them. Rather than start a debate over homosexuality’s place in society, I think a more important question is whether any minority group can be singled out by businesses without offending someone outside that demographic.
Does the fact that American Airlines wants to do business with gay customers mean the company promotes homosexuality? Or does it show that the airline thinks the gay community will become more profitable under the Rainbow program (above) than if it’s lumped in with everyone else? The same can be said for Bank of America, Levi’s (gay/straight comparison of commercial shown right, "gay" version video below), Disney, and other companies that reach out to gay customers specifically. All of the programs mentioned in the article were very successful, turning a previously overlooked group into loyal, profitable customers.
Given the reality that people like Robbie will respond negatively when the brands they buy cater to certain groups, what should a company do? There are obviously laws in place to protect consumers from discrimination, but outside of that would you ignore the profit that could come with some targeted marketing in gay publications because of potential backlash?
When I wrote the story about targeting gay consumers, I didn’t worry that some of 1to1 Magazine’s readers would unsubscribe because they were offended (to my knowledge, none have). It’s my job to give readers all the information they need to become better customer advocates and marketers, just as it’s our readers’ job to increase revenue, serve customers, and build a stronger brand as much as they responsibly can.
What do you think? Should companies worry that if they market to a group like the GLBT community they’ll lose business from other customer groups? In your experience, what choice makes the most business sense? When you choose who to do business with, do you consider who the company’s other customers are?
My thoughts and comments are best addressed in my blog:
http://crm2.blogspot.com/
Tolerance of diversity. You either have it or you don't.
Sellers who target various groups, in my view, are simply smart marketers. Good marketing is all about segmentation and targeting, isn't it?
Sure, you have to weigh the risks of any business move... and the potential reaction of your customer base to specific targeting measures may be a consideration... but my feeling is that people like Robbie W. are in the minority and represent a dying breed. If he and others want to pull support from some companies because of their beliefs, go for it. They simply will have less choice.
I believe that company's should focus on their core competencies and which markets are their best target. There will always be someone to offend and unless the offended party is your only market - be aware, but confident in your product or service value.
Boy oh boy, what a hot topic we have here!
Personally, I’ve always considered the economy to be a wonderful example of free people expressing free ideas. And in a free economy I think buyers have every right not to buy from sellers whose marketing programs they don’t approve of, for whatever reason they consider worth spending their own money on. I mean, that’s the nature of personal freedom.
Whether you agree with the American Family Association’s position on various issues or not, we still can’t begrudge buyers the right to vote with their pocketbooks.
But I also think we shouldn’t begrudge sellers the same right.
I think no matter what group you decide to market to, you should be sure your campaigns are authentic, relevant, timely, and ultimately profitable. It all comes down to making sure your marketing dollars are being spent wisely. If you can track performance back to a successful campaign to a certain group, then the common attributes of the group shouldn't matter.
Well stated Jeremy. If someone in 2008 is going to start boycotting companies who "dare" to tailor some of their marketing efforts to specific groups, they're going to find themselves with a very small number of shopping options.
I'm unfamiliar with the research proving that Ford's difficulties stem from the American Family Association's boycott, but like most unblinkered people, I *am* aware of what happened to Anita Bryant, Al Campanis, Jimmy the Greek and various others when they said -- or at least suggested -- that so-called minorities are somehow inferior.
I also think the PC police can get carried away, but the argument here seems to go beyond being PC, and is more about simply being tolerant.