How to market effectively to LGBT audiences
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This article explains the factors and considerations for marketers when speaking to an LGBT audience in the United States, including facts and figures around the community and why brands should pay attention.
The LGBT community (Lesbian, Gay, Bisexual, and Transgender) is the name given to an audience with an estimated buying power of close to $900bn, despite accounting for just 3.5% of the US population. For brand loyalty, key statistics include the fact that 70% of LGBT adults stated they would pay a premium for a product from a company that supports the LGBT community.
The nature of the community means that it is a mosaic of individuals rather than a monolith, or one solid group; communications ought to be specific, inclusive, and transparent. Marketers are urged to create an Inclusion Based Marketing and communications plan - this involves featuring LGBT people as part of the cultural landscape, alongside other non-LGBT people.
Case studies include Kaiser Permanente, Coca-Cola, and Honey Maid, alongside further reading.
Speed Read
The LGBT community has been marketed to since the early 1990s. However, it is over the last decade that corporations have really begun to look at this community as the large demographic that it is.
The purchasing power of the American LGBT community stands at $884 billion as of 2014[1]. This number in and of itself is a sizeable figure, but when compared to other sought-after minority groups, it is much more significant than it may first appear.
The following information seeks to highlight the most important and distilled facts and figures around the LGBT community and why this is a target demographic brands should pay attention to.
Definition
LGBT is an abbreviation for Lesbian, Gay, Bisexual, and Transgender, which is an umbrella term that is used to refer to the community as a whole. There are additional acronyms to represent the LGBT community which include, LGBTQ or LGBTQIA. LGBTQ is Lesbian, Gay, Bisexual, Transgender and Queer, while LGBTQIA adds Queer/Questioning, Intersex and
Asexual/Ally. These added acronyms are often seen when working with younger demographics such as college students.
Where to start
The LGBT Community in Numbers
The LGBT community is an incredibly powerful and loyal audience. The following will cover some of the key data points that will help brands better articulate why marketing to the LGBT community is worthwhile.
LGBT Consumer Buying Power
With an estimated buying power of $884 billion in 2014 and a potential population size of nine million in the United States alone, the LGBT community is fertile ground for companies that are committed to gaining this loyal audience. This is commonly referred to as the 'pink dollar' or the 'gay dollar.'
In order to illustrate the immense buying power of the LGBT community, here are the buying power numbers for the top four niche segments. (Note: these are all buying power figures from 2012 to compare apples-to-apples).
Hispanic Americans = $1 trillion[2] African Americans = $1,038 billion[3] LGBT Americans = $790 billion Asian Americans = $718 billion[4]
On the surface these figures look similar and appear that each group has similar stature in their buying power as a group. Now let's look at the population size of each of these communities:
Hispanic Americans account for 16.7% of the population at 52 million people. African Americans account for 14.2% of the population at 44.5 million people. LGBT Americans account for 3.5% of the population at 9 million people. Asian Americans account for 4.8% of the population at 14.7 million people.
When analyzing the buying power of each group proportionate to their respective population count, the numbers become very clear. LGBT Americans have four times the buying power per person than Hispanic Americans and African Americans, and twice the buying power of Asian Americans. So while LGBT Americans are the smallest size based on actual population, they have two to four times the amount of buying power than their diverse counterparts. The LGBT community is a significant contributor to the U.S. economy and a missed opportunity for any company who is not paying attention to this potential audience.
The Williams Institute [5] at the UCLA School of Law publishes a lot of excellent data regarding the size of the LGBT community. There is also abundant census data (2010) that pertains to LGBT people in the U.S. It is compiled in a digestible format for people to see the LGBT population at a glance in their own state.
DINKs
The term DINK refers to Double Income, No Kids. This can be any couple that is childless where both partners work. A DINK is not necessarily an LGBT person; however, data points out that less than 25% of gay men and lesbians are living in households with children. In other words, 75% of LGBT households do not have children.
A 2010 Census Snapshot from the Williams Institute reveals some interesting numbers:
Approx. 7.7 households out of 1,000 are same-sex couples (U.S.) 22% of same-sex couples are raising children (U.S.)
This data suggests that many same-sex couples are indeed DINKs—households with double income and no kids. That means many of them have disposable income, which is a key factor in why many companies are paying more attention to the LGBT market.
Here are some more numbers from the Williams Institute from April 2011:
An estimated 3.5% of adults in the U.S. Identify as lesbian, gay or bisexual An estimated .03% of adults in the U.S. Identify as transgender These numbers indicate that there are approx. 9 million LGBT Americans (roughly the population of the state of New Jersey)
Brand Loyalty and the LGBT Community
"Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service, or other positive behaviors such as word of mouth advocacy."[6]
The following statistics come from two different sources, Community Marketing Inc.[7] and Harris Interactive[8].
55% of LGBT consumers will choose to do business with companies that are committed to the diversity/equal treatment of the LGBT community. 69% of LGBT people say their purchases would be influenced by a buyer's guide that shows which companies have positive workplace policies towards LGBT employees.
70% of LGBT adults stated they would pay a premium for a product from a company that supports the LGBT community. 74% of LGBT people are likely to consider brands that support non-profits/ causes important to LGBT consumers. 78% of LGBT adults and their friends, family and relatives would switch to brands that are known to be LGBT- friendly.
Take those numbers in for a moment and think how this could translate into business growth and bottom line. 55% will do business with companies committed to diversity. 70% of LGBT adults said they would pay a premium for a product that supports the LGBT community. And 78% of LGBT adults and their friends would switch to a known LGBT-friendly brand. By following a strategic and inclusive approach, brands can open the doors for great business potential.
Essentials
Breaking the Monolithic Stereotype
The first and possibly most important thing to know about targeting the LGBT consumers is that the community is not monolithic. In other words, LGBT consumers are not a large mass of people but rather a mosaic of individuals within an expansive, diverse community.
Every marketing and communications touchpoint, from company culture to marketing communications, should be specific and not just a blanket statement of 'We are gay-friendly.' For example, an advertisement encouraging a middle aged lesbian couple with two young children to take a cruise should not contain imagery of shirtless young gay millennial men. On the surface these two different groups are part of the same LGBT community, but the reality is the marketing messages are drastically different.
A good visual for this is to think about marketing men's versus women's deodorant brands. It's clear that a commercial for Secret for Her is targeting women and a commercial for Old Spice for Men is targeting men. In short, the deodorant brands are marketing very specifically to their individual target customers. This should be no different as it relates to LGBT marketing efforts.
Smart marketers prepare targeted outreach for a potential audience for their brand; they do their homework and research; they identify key demographics and psychographics etc.
This is by far one of the biggest and most easily corrected pitfalls marketers make when preparing their LGBT outreach efforts. So targeting a lesbian household with gay male focused advertising is not only a waste of marketing dollars, it is also sends the message that marketers don't really know what they are doing because they are throwing the community into the monolithic heap of 'LGBT people to market to'. This approach comes across disingenuous. As such marketers are better off not doing anything at all if they are going to treat the community as one large undifferentiated mass of people.
Inclusion Based Marketing
Diversity and inclusion are two terms often heard in the same sentence. They have similarities but they are quite different. Diversity means difference in a factual way: it really defines diverse populations such as race, ethnicity, gender, gender identity, sexual orientation, gender expression, disability, nationality, language, religion, and socio-economic status. These are all forms of diversity, any one of which could be the basis of a targeted marketing campaign. Inclusion however is a feeling – a way of being. It also requires action to happen. Still, for marketing to the LGBT community to be effective, diversity and inclusion must work in tandem.
Many companies and businesses have been or are currently marketing their products to diverse communities based on segmenting their audience. They break down their target markets and have well-crafted messages aimed at reaching each diverse community. For example, a company may already be marketing to the LGBT community and have two distinctly different ad campaigns – one for their general market audience and one for their LGBT audience. The ad campaign designed specifically for the LGBT audience might only be seen in LGBT specific media. It would be possible to replace LGBT with any other diverse audience and the principle would be the same. There is nothing wrong with creating separate ad campaigns to reach separate and diverse groups of people, per se. However, there is a more effective way of doing this.
Inclusion Based Marketing is the act of being intentionally inclusive in LGBT marketing efforts. Current trends are pointing to this being the smart choice. The idea is to create an Inclusion Based Marketing and communications plan, rather than creating separate plans for separate audiences. So instead of isolating a specific audience like LGBT consumers, companies are starting to include LGBT people in their mainstream advertising. Two brands that have done this particularly well in recent years are Coca-Cola and Mondelez' Honey Maid (see case studies below).
The ad campaigns were not revolutionary in any way. But both brands simply featured LGBT individuals in their advertisements alongside other individuals. The Coca-Cola ad featured a diverse representation of America and included two gay dads roller-skating with their daughter. Honey Maid included a gay male couple swaddling their newborn alongside many other types of families in their "This is wholesome" commercial. Including LGBT people as part of the cultural landscape and with other non-LGBT people is Inclusion Based Marketing and something every company can accomplish.
Authenticity and Transparency
When considering marketing to the LGBT consumer brands should be authentic and transparent in everything it does. If not, the success rate is likely to be rather low. LGBT consumers are extremely aware what a brand is - or is not - doing for the LGBT community. This includes a company's approach to employing people from the LGBT community as well as its overall corporate culture.
In short, superficial or token gestures will not suffice. And the social media era has made it very difficult for brands to offer cosmetic or empty gestures.
So before beginning any external outreach and marketing, it's important to assess what's going on internally. A brand looking to do business with the LGBT community, should also consider partnering with the LGBT community. Reflecting back on how savvy LGBT consumers are, a brand's authenticity and transparency are paramount. A brand cannot simply declare it supports the LGBT community without examining its own company culture first. Word of mouth within the LGBT community spreads rapidly, so if a company is not properly supporting internal LGBT initiatives the broader community will know about it. This can render marketing efforts all but useless in acquiring new LGBT customers.
Reminder Checklist
5 Quick Tips for Effective LGBT Advertising
1) Tailor your message
Know your audience. For example, putting an ad in an LGBT-specific publication that features a straight couple will alienate an LGBT audience. Failure to tailor the message signals a lack of commitment to or understanding of the target audience. Don't use the same blanket ad and message for all of markets. A good way to understand the LGBT customer is to hire from the LGBT community. You can approach LGBT employees and ask their opinions on marketing initiatives. It is important to note that one LGBT person's opinion is not representative of an entire community of people, but it can provide base level insight.
2) Be subtle
When creating ads that are specific to the LGBT community, be subtle. There's nothing more obnoxious than seeing a mainstream company slap a rainbow on the top of their standard ad and claim "We're gay-friendly." The community doesn't need to see a rainbow to understand a brand supports the LGBT community. Simply including an LGBT couple alongside a straight couple in an ad would go a lot further. Subtly show that your business is inclusive rather than forcing it.
3) Be inclusive
Kaiser Permanente, the US healthcare consortium, demonstrates inclusion at its finest. (See Case Study below). The ad, which showed support for the LGBT community among many other groups, featured in Time magazine. While it is good to advertise in LGBT-specific publications, it is great to advertise in mainstream media such as Time, USA Today, or Entrepreneur Magazine with ads that feature LGBT people. LGBT people are in the mainstream, seeing and hearing ads just like everyone else. When a brand is willing to put itself out there by letting its whole audience know it supports the LGBT community, it shows true commitment.
4) Don't worry about stereotypes
Stereotypes are a losing battle. Rather than rehash the semantics of why you'll never win the stereotype battle, focus on one thing: be authentic. When producing a major ad campaign, skip the stock photography and use real LGBT people. There are a lot of stock photos of "LGBT" people, and chances are they are models that hundreds of other companies are using to represent the LGBT community. Invest the money, do it right, and get some authentic LGBT photos. Get creative with it—start a contest with current customers asking them to submit photos. And get ready to be surprised by the quantity and quality of photos received.
5) If you've got it, flaunt it
Brands that have been recognized for work in the diversity or LGBT space should flaunt it! It's hard work to be recognized, so reap the benefits of taking a progressive stance.
Case Studies
LGBT Marketing, Kaiser Permanente
ARF – Knowledge at Hand, 2013
In 2011, Kaiser Permanente, produced a print advertisement that appeared in mainstream media publications. The ad was not revolutionary; it simply included LGBT people alongside others. It featured a large multiracial and multicultural family, which included an LGBT couple, as well as a person with a disability. The importance this ad conveyed was that LGBT people are part of the fabric of family life and shouldn't be treated any differently.
Coca-Cola: It's beautiful
Warc Prize for Social Strategy, 2015
In 2014, Coca-Cola released the "Its Beautiful" ad during the Super Bowl. This commercial featured a collection of Americans – from every race, culture, religion, gender and sexual orientation. The song America The Beautiful was the backdrop of the commercial. Like Kaiser Permanente, 3 years earlier, this commercial is not revolutionary. All it did was simply include LGBT Americans into an ad that was designed to celebrate Americans in the many ways in which make America diverse. The key message is including LGBT people in all of our advertising, not just relegating them to an LGBT specific corner.
Honey Maid: Turning hate into love
Warc Prize for Social Strategy, 2015
In 2014, Honey Maid, a baked snacks brand, released its "This is wholesome" campaign in an effort to bring relevancy back to the brand. The campaign included a wide variety of families, from punk rockers to mixed race couples to gay dads. Like Kaiser Permanente and Coca-Cola, Honey Maid was simply illustrating the fabric of what it means to be a family in today's world. However, what sets Honey Maid apart is the way they handled the criticism for including a gay couple. An outspoken minority of consumers were outraged by Honey Maid's support of the LGBT community. The brand hired two artists who printed out every single message of hate from social media and rolled them up into cylinders and spelt out the world 'Love.' This took all of the positive comments and surrounded the hate and turned it into a sea of love. The video of the artwork went viral. Honey Maid stood by its message of inclusion and was positively rewarded as a result.
Further Reading & References
Warc Topic Page: LGBT Warc Topic Page: Ethnic & minority groups Podcast: How Barilla Pasta alienated LGBT people on a global level. Podcast: How Cracker Barrels indecision cost them LGBT customers. Book: But You Don't Look Gay...: 6 Steps in Creating a Successful LGBT Marketing Strategy Book: No, Wait... You Do Look Gay!: The 7 Mistakes Preventing you from Selling to the $830 Billion LGBT Market
References
[1] http://www.witeck.com/pressreleases/americas-lgbt-2014-buying-power-estimated-at-884-billion/
[3] http://www.reachingblackconsumers.com/2012/04/black-buying-power-continues-torise/ [4] http://www.nationaljournal.com/thenextamerica/economy/asian-americanpurchasing-power
[5] http://williamsinstitute.law.ucla.edu/
[6] https://en.wikipedia.org/wiki/Brand_loyalty
[7] http://www.communitymarketinginc.com/gay-lesbian-market-intelligence/
