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Many businesses seek favor among LGBT customers

While Chick-fil-A President Dan Cathy's public opposition to gay marriage has inflamed gay organizations and their supporters nationwide, many companies are going out of their way to court those groups.

August 04, 2012|By Tiffany Hsu and Ricardo Lopez, Los Angeles Times
  • Chick-fil-A employees at a restaurant in Torrance were greeted Friday morning with the words “Tastes like hate” scrawled in large black lettering mimicking the chain’s advertising. Above, painters cover up the writing.
Chick-fil-A employees at a restaurant in Torrance were greeted Friday… (Rick Loomis, Los Angeles…)

Chick-fil-APresident Dan Cathy's public opposition to gay marriage has landed him in a lonely corner of corporate America.

While the fast-food chicken chain has inflamed gay organizations and their supporters nationwide, many companies are going out of their way to court those groups.

J.C. Penneythis year hired lesbian talk show host Ellen DeGeneres as its spokeswoman and featured same-sex couples in its catalogs. Kraft Foods recently posted a photo of a rainbow-hued Oreo cookie to its Facebook page.

Bank of America and nearly 40 other companies now offer tax relief to gay employees — triple the number of firms with the same option last year. In Washington state, founder Jeff Bezos and his wife last month donated $2.5 million to back a gay marriage ballot initiative already endorsed by Microsoft, Starbucks and Nike.

Business donations to Los Angeles gay pride events, including a festival and a short parade, have doubled in five years to $300,000 last year, when Bud Light, Johnson & Johnson andCoca-Colawere sponsors.

It's not hard to see why. Estimates peg the self-identified lesbian, gay, bisexual and transgender demographic at about 3.8% of the American population — or roughly 9 million people. Their buying power is expected to reach $790 billion this year, according to Witeck Communications, a marketing firm specializing in LGBT issues.

They're not shy about spending, dropping more than $60 a week each on restaurants, according to a 2010 report from Community Marketing Inc. More than a quarter of gays and lesbians bought a high-definition TV that year.

Nationwide, more Americans now support same-sex marriage than oppose it, according to recent surveys from the Pew Research Center. Backing is particularly strong among young people, a demographic that advertisers are keen to reach. LGBT characters are gaining prominence in popular entertainment, with more major roles in music, television, movies and even comic books.

As customers shift with the cultural tide, many formerly conservative companies are doing the same.

"Corporate America is definitely following the trends, reading the tea leaves," said Jason Snyder, an assistant professor at UCLA Anderson School of Management. "It's more symbolic of what's happening in society — that supporting gay marriage is becoming a less risky or taboo position."

Gay consumers also tend to react faster and more forcefully to slights. They pay attention to which companies promote diversity and lend support to same-sex causes — factors that heavily influence where their dollars go, according to the Community Marketing report.

And the LGBT population is often highly organized in using Twitter and Facebook to pull together mass petitions and boycotts within hours. More than 14,000 people signed up on Facebook for National Same Sex Kiss Day atChick-fil-Aon Friday, an event arranged mostly online.

"Social media is the difference now," said Hayes Roth, chief marketing officer of Landor Associates, a brand consulting firm. "For no money, you can light a match and, like wildfire, these movements can take place."

Supporters of Chick-fil-A and Cathy, who told a Baptist publication last month that the company is "guilty as charged" of opposing same-sex unions, have also used social media effectively. Customers packed the chains' more than 1,600 locations nationwide on Wednesday after Mike Huckabee, a former GOP presidential candidate, dubbed it Chick-fil-A Appreciation Day on Facebook.

But consumer perception of Chick-fil-A, one of the nation's best-ranked fast-food outlets earlier this year, has sunk to its lowest level in at least two years since Cathy's comments, according to research group YouGov. Meanwhile, positive buzz aboutJ.C. Penneyhas jumped among its core female audience since DeGeneres came on as the retailer's spokeswoman, the Palo Alto-based research firm said.

Companies also are trying to boost LGBT numbers in the workforce.

More than 7 in 10 LGBTs have college degrees, according to the Community Marketing report. What's more, 7% of the graduates have earned doctorate degrees, the report found.

Companies are wooing LGBT candidates with special perks. Bank of America reimburses gay employees the cost of a federal tax they pay on health coverage for their partners.

This year, 86% of Fortune 500 companies included sexual orientation in their non-discrimination policy, up from 61% a decade ago, according to advocacy group Human Rights Campaign. More than half of such businesses said that such gay-friendly policies improve their bottom lines by helping them attract the best talent and boost employee morale and innovation, according to a survey by UCLA's Williams Institute.

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