Marketing by Design: Affluent Gay and Lesbian Customers (Part 1 of 2)

According to a national survey conducted by Harris Interactive, 48% of gay and lesbian adults go shopping with the intention of keeping up with the latest styles and trends in luxury goods. Only 38% of heterosexual adults shop for the same reason. Of the gay men surveyed, 53% like to be up to date as far as fashion is concerned. And 49% of the same group move up to the most recent models of luxury products. One reason for all this shopping is that only 20% of gay and lesbian households contain children. Which means gays and lesbians have more discretionary income than their heterosexual counterparts.

These statistics indicate that the market for affluent gay and lesbian customers is just waiting to be tapped. There are 16 million gay customers over the age of 18 in the USA. They represent $641 billion in buying power, according to Harris Interactive. Gay customers are more likely than heterosexuals to make purchases online with credit cards. And 79% of gays and lesbians indulge themselves with luxury goods and services.

Gays and lesbians seek out and support brands that market specifically to them, with the result that 89% of gays and lesbians are brand loyal. Compared to heterosexuals, gays and lesbians are four times more likely to shop at Banana Republic, three times more likely to shop at Bloomingdales, four times more likely to shop at The Sharper Image, three times more likely to buy from a Restoration Hardware catalogue, three times more likely to shop at Crate and Barrel, four times more likely to shop at Saks Fifth Avenue, and three times more likely to shop at Neiman Marcus.

Before they go shopping, again according to Harris Interactive, fully 81% of gays and lesbians use the internet to research luxury goods and services.

Before the above numbers came to the attention of businesses, executives and consultants, the way a company sought customers in the gay community was simple. They ran an advertisement in a gay publication.

It is a lot trickier now.

Gay and lesbian customers are sophisticated and have lots of money. They are also suspicious of being exploited. Which means they will boycott companies that offend them. For example, Procter & Gamble, the insurance giant GEICO, Xerox, and Sky Tel Communications pulled their advertising dollars from Dr. Laura’s popular show. Why? Because they didn’t want to alienate potential gay and lesbian customers.

The buying power of the gay and lesbian community carries tremendous opportunity, so much so that marketing to the gay community is now a targeted area that requires specialized advertising. Any individual or business that wants to fish in the waters of the gay community must support tolerant workplace policies and be actively involved in gay and lesbian concerns.

Many companies have chosen to do so: Subaru, IBM, Crest, Nivea, Capital One American Express, and American Airlines, to name just a few. American Airlines, for one, has relished a double-digit increase in gay customers. These companies market to the gay community by customizing campaigns specifically for them. A major beer company sponsors concerts by gay musicians. Absolut vodka has targeted gays and lesbians with innovative marketing. Dominion groceries designed and produced advertising for gay publications. Dominion’s marketing is deliberately impudent, but it works, which means they put time and thought into it.

According to USA Today, in 2005, 175 Fortune 500 companies actively marketed to the gay community. Cities such as Miami, Dallas, Philadelphia, and Phoenix instituted marketing programs designed to attract gays and lesbians to their restaurants, nightclubs and hotels. In other words, the cities lined up to attract the vacation money of gays.

From this information it becomes evident that appealing to the psychology of affluent homosexual customers is no different than appealing to affluent heterosexuals—except for one thing: gays and lesbians are proud of their sexual preference. And they want their sexual preference to be recognized and accepted.