Marketers Finding a Profitable Niche in the LGBT Community

The LGBT community is garnering more respect these days as their struggle to achieve equal rights, especially in terms of getting legally married, was officially recognized by the U.S. Supreme Court earlier this year. Marketers have plenty of reasons to court this demographic. Research shows these LGBTconsumers control  $800 million in annual spending and they consistently reward marketers that are openly friendly to them and avoid those that use insensitive brand and promotional messaging.

According to some estimates, about 4% of all households in the U.S. are made up of LGBT consumers. About half of these households are also under age 35 which means marketers should be gearing their messages to a younger demographic.  Other distinct characteristics of these households are:

  • Lack of children: A significant number of LGBT consumers do not have children living in the home which means they have more money to spend on goods like household furnishings and travel.
  • Urban: While these consumers are far more likely than straight consumers to live in a city, they also rent apartments instead of owning homes. This living arrangement frees up cash for apparel and entertainment purchases. Gay men spend over $2,000 more on consumer packaged goods than the average household.
  • Education: These consumers have a higher than average rate of post-​graduate education which can also translate into a higher annual income.

SBI’s MacroMonitor survey reveals that LGB consumers engage in 711 separate buying transaction annually compared to the 634 buying transactions engaged in by their straight counterparts. While it may be tempting to treat everyone in this group identically, researchers caution marketers against using a one-​size-​fits-​all advertising approach. Big differences exist between some of these households. For example, bisexual consumers are the subgroup most likely to have children.

Researchers also note that these consumers form close communities. They use social media and mobile devices to stay connected with marketers and each other and they are very fast to communicate their positive and negative encounters with merchants.

To learn more LGBT audience, check out the AudienceSCAN report available on the Research Store at ad​-ology​.com

[Sources: Fuller, Brad. Here’s How Some Brands Have Won. Businessinsider​.com. [RivetGlobal] 23 Jun. 2013. Web. 24 Sept. 2013; Breman, Patricia. Marketing to LGB Households. Strategicbusinesinsights​.com. Sept. 2013 Web. 23 Sept. 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.