As the LGBTQ community gains more widespread acceptance in the United States, understanding the following market insights can assist you in appealing to their wealthy members.
Many businesses seeking to target consumers with the highest purchasing power are increasingly reaching out to lesbian, gay, bisexual, transgender, and queer individuals. Despite this being a relatively quiet trend, it is growing steadily.
A significant proportion of these consumers have above-average education and earn above-average incomes, often residing in two-person households. Furthermore, as many do not have children to raise, they typically have more disposable income each month than their heterosexual counterparts who do have families.
These market insights can assist you in attracting affluent members of the increasingly mainstream LGBTQ community in the United States.
To tap into the highest spending power, you will be joining a growing number of companies that are reaching out to LGBTQ consumers. Despite this trend, many marketers who are heterosexuals may feel uneasy about designing advertising and marketing programs to attract LGBTQ customers, clients, or patients.
Many of these consumers reside in two-person households, with each member having above-average education and earning above-average incomes. Additionally, as many do not have children to support, they tend to have more disposable income than their heterosexual counterparts who have families.
It’s important to note that targeting the LGBTQ market can be a profitable business strategy. Ignoring this market could be a fiscally irresponsible decision, particularly if your business has shareholders.
While the LGBTQ community is part of mainstream America, they are still receptive to targeted marketing and messages tailored to their unique needs. Successful marketers who cater to this group create gay-friendly environments and design unique advertisements that appear in publications the LGBTQ community reads. The key to success, as with any targeted marketing, is to avoid being condescending or awkward.
Key market facts that highlight the purchasing power of the LGBTQ community in the U.S.
- Research indicates that 80% of gay people earn more than the national average income, with 40% earning over $100,000 annually.
- As of 2016, the combined buying power of LGBTQ adults in the U.S. exceeds $915 billion and is on the rise.
- LGBTQ consumers spend over $64 billion per year on travel, making this industry one of the earliest and most aggressive in targeting this demographic through product offerings, advertising, and marketing. For instance, after research revealed that gay men spend an average of 30% more than straight men on travel, Harrah’s Entertainment began targeting this market, resulting in significant revenue gains. Similar gains can be made across various business categories by appealing to the affluent LGBTQ demographic.
- Gay consumers are more likely than heterosexuals to purchase vacation homes, home theater systems, and multiple mobile devices and computers.
- LGBTQ households visit malls and retail locations more frequently than the average U.S. household, with 10% to 20% more shopping trips.
- In B2B spending, 30% of LGBTQ employees and executives control budgets or purchasing decisions and 60% of those surveyed say that the reputation of a vendor company for being LGBTQ-friendly affects their purchasing decisions.
Overall, marketers who ignore or resist targeting the LGBTQ market risk missing out on significant revenue opportunities.
Matching Media with the LGBTQ Market
When it comes to reaching out to LGBTQ consumers, the top three effective ways to communicate inclusivity are:
- Advertising in LGBTQ media (49%)
- Articles and news stories (47%)
- Sponsorship of LGBTQ charity events or organizations (41%)
Affluent members of the LGBTQ community are more active online than the general population, making it crucial to utilize online and social media for outreach. Compared to the general population, they are 1.8 times more interested in receiving mobile advertising, 2 times more connected by hours spent online, and 1.5 times more likely to post and consider online reviews.
But can target marketing be effective?
Yes, it can.
Subaru, an automaker, managed to turn their struggling company around by advertising to a previously ignored group of consumers: lesbians. Internal research showed that a significant number of their customers were lesbian, so the company crafted advertising specifically for them. Subaru’s ads featured captions such as “It’s Not A Choice. It’s The Way We’re Built,” and incorporated openly gay celebrities such as tennis star Martina Navratilova.
Matching Your Message to the Right Market
To effectively market to a specific group of consumers, it’s crucial to first gain a deep understanding of that target audience and categorize them into manageable subgroups.
For nearly three decades, Community Marketing & Insights has been conducting research on the LGBTQ community, dividing the market into three identities and three generations to create nine distinct submarkets:
- Gay and bisexual men (46% of the market)
- Lesbian and bisexual women (also 40% of the market)
- Gender-expansive individuals, including those who don’t identify as heterosexual (8% of the market)
The three generational categories are:
- Millennial (born 1981-1999)
- Gen X (born 1965-1980)
- Boomer (born 1942-1964)
Here’s a brief overview of each of the identities:
- Gay and bisexual men: Of this group, 26% are legally married and another 17% live with a partner. They have the highest incomes of all the LGBTQ groups, with over half earning more than $100,000 a year. They are mainly concentrated in urban and big city areas.
- Lesbian and bisexual women: About 39% of this group are legally married and another 18% live with a partner. Around 30% have incomes above $100,000. There’s a broader geographic distribution among this group, which includes medium-sized cities and suburban areas.
- Gender expansive: Of this group, 31% are legally married and another 15% live with a partner. They tend to have lower incomes, net worth, and homeownership rates than the other two identities.
Age brackets also matter, as they do in the overall population, and in much the same ways as the general population.