Wes Combs on gay businesses

Recently, we had the chance to sit down with Wes Combs of Witeck-Combs Communications. We talked about the economy, LGBT buying power and advice for LGBT entrepreneurs . . .

How has the economic downturn affected the LGBT buying power?

We actually did a survey on this very topic so we do have some interesting insights.  In October of 2007, working with Harris Interactive, Witeck-Combs Communications asked LGBT Americans how the current economic downturn was impacting their household.  We were able to compare their responses to how heterosexual Americans and this is what we found. While many American households cut spending and shift consumer priorities to cope with tough, new economic realities, there were marked differences in responses based on gender and sexual orientation, frequently with lesbian adults feeling more vulnerable when compared to other populations, while gay men appear less likely to cut back discretionary spending compared with their heterosexual counterparts.

A majority (55%) of all U.S. adults indicate that they will be impacted by the economic downturn. Among other groups the economic downturn is perceived to have more influence. For example, when asked to think about their own personal circumstances today, 3 out of 4 (75%) adult lesbians say they feel the impact of the severe economic downturn will affect individuals and households like theirs more than others.  In contrast, this opinion was held by 60% of heterosexual women and 55% of gay men.

Not surprisingly therefore, when asked about spending for entertainment generally, over four out of 10 lesbians (44%) said they likely will reduce their spending, in contrast to fewer than a quarter (24%) of gay men.  Similarly, when asked about plans to take a vacation from home lasting more than a week – a clear majority (56%) of heterosexual adults said they were not at all likely to do so within the next 6 months – compared to 42% of gay and lesbian adults who agreed.  Looking only at gay men, 39% said they were not at all likely to take a vacation compared to more than half (52%) of heterosexual men.

Gay households are hardly immune, and demographic research confirms that GLBT consumers are not more affluent than others.  However, we see lesbians once again showing more vulnerability than gay men, and while gay men also are scaling back in spending options, it is less so than heterosexual households.  Not surprisingly, while more same-sex households, especially women are raising children, proportionately more gay male households remain childless and therefore may feel somewhat freer to make choices in today’s tight economy.

What advice do you have for LGBT businesses?

In today’s economy, it is difficult for all businesses, regardless of if the owner is GLBT or not.  It is important to understand that all business owners will be able to maximize their success in any economic situation if they know who their core customer is and how best to connect with them.  Our research with Harris Interactive has consistently shown that GLBT consumers prefer to do business with companies that reach out to them with tailored messages, who give back to the GLBT community and whose workplace policies provide parity to their GLBT employees when compared to the benefits given to their non-GLBT employees.

As GLBT business owners, my business partner and I look for opportunities to support non-profits in the community that demonstrate our commitment to the community but also that will allow us to network with potential clients or participate in the event with existing clients.  This is the advice I would give to other GLBT business owners.  Also, leverage the GLBT Chamber of Commerce in your community by being a member and by participating in their networking events. People like to do business with people they know and like.

Finally, I urge all GLBT business owners to get certified by the National Gay and Lesbian Chamber of Commerce as a GLBT-owned business.  This will allow the company to gain access to Fortune 1000 supplier diversity programs that have stated targets to hire a certain percentage of GLBT-owned vendors each year.  These programs have been in place for years with African-American, Hispanic, Asian-American and women-owned businesses for years.  Now corporate America is recognizing the importance of including GLBT-owned businesses to their supplier diversity initiatives.  For more information, visit www.nglcc.org.

What is your favorite marketing tip?

Google yourself and see what you find.

For many of the products and services that consumers and businesses procure every day, people rely more and more on the Internet for data collection as well as “word of mouth” feedback.  Blogs are incredibly important because they can spread good reviews about your company’s reputation far and wide.  At the same time, they can also do the opposite – and sometimes even when the information is not true or accurate.

By conducting regular Internet searches, you can learn some critical things about your business:

• How far up on the list of different browser searches does your product or service show up?  If it is not on the first screen, you should have a web optimization firm review your web design and find out why your competitors are showing up ahead of you.
• Is the information that shows up in these searches accurate and positive?  If not, find out what they are saying and when possible, correct any misinformation.  Not only will you be perceived as being responsive but you may also learn some important information about how you do business that you can use to improve your business.
• What does your competitor say (as well as others who refer to your competitor) about their products and services and how does that differ from your offerings?  This can help you shape your own strategy to be as competitive as possible.

What do you think of social networking?  What works for you and what doesn’t?

The social networking phenomenon is something each business owner needs to understand and determine how it will help them with their business.  Not every type of business will benefit from the social networking model but for our business, it is an extension of the work that we do.  As marketers and strategists, we are subject matter experts in the field of helping companies market to GLBT consumers.  Part of our work includes conducting market research on the attitudes and preferences of gay consumers and we often use social networking sites as a way to highlight the work we have done.  Word of mouth marketing is one of the most powerful ways to spread ideas to others and social networking sites are designed to do just that.

Care must be taken however to know that negative information can be spread far and wide on the web as well.  If a business person has been involved in legal issues or has had a dispute about the quality of their work, this information often is public information and can be shared with others via web links or as hearsay.  That is why it is important to Google yourself to see what others can read about you and your business.  Your reputation is the most important asset you have as a business person and you must protect it at all times.

Do you believe in boycotting firms that are unfriendly to LGBT issues, such as boycotting the businesses of Prop 8 supporters?

I do not believe that boycotts work.  The main reason is that there is no way to isolate the actions of consumers who choose not to do business with a company from the other factors that impact a business, especially in the economy that we are in.

Having said that, while we as GLBT people do not yet have equal rights in this country, we do control where we spend our money.  If you are not happy with a company’s actions and you decide to shop elsewhere, let the local manager know that you made this decision so they are aware of how the company’s actions impact their bottom line.  The same goes for supporting a company because you feel they are GLBT-friendly.  Since it is often very difficult to track GLBT sales as a percentage of the overall sales of a company, this is one way to help management at the company know who you are as a GLBT consumer.

Another reason why I do not believe in boycotts is that often all of the information about a company is not apparent to some in the blogosphere who call for a boycott based on what they hear a company has done when in fact the information may only be partially right or altogether incorrect.  The best way to address this is to focus your spending on companies that are committed to GLBT equality internally and externally. Each year, The Human Rights Campaign publishes its Buyer’s Guide, which encourages consumers to focus their spending on companies that score higher on the HRC Corporate Equality Index than those that do not.  I agree – let’s reward companies that are committed to GLBT diversity and not those that do not. http://www.hrc.org/buyersguide/

Who is your role model?

I actually have two.  One is Elizabeth Birch.  When she was the Executive Director of the Human Rights Campaign, she understood the important role that corporate America played when it came to GLBT equality overall.  She was responsible for setting up HRC’s Business Council, which is comprised of 25 business and non-profits professionals who are dedicated to GLBT equality in their roles in the workplace.  I have been fortunate to serve on the Business Council for the past 8 years and as a co-chair for two of those years.  Without a doubt, the work that HRC has done with its Workplace Project and the Corporate Equality Index has helped to make the workplace better for GLBT workers in the U.S.

My other role model is my business partner Bob Witeck. He is truly the smartest person I know when it comes to communications expertise and I am fortunate to call him my business partner.  I learn something new every day from him.

As gays become more main stream and accepted, what happens to their power as a niche?

The GLBT niche will continue to exist for decades to come in one form or another.  True equality in our nation is a slow process and while GLBT visibility is greater than it has ever been before, there will still be barriers to overcome for the foreseeable future.  The GLBT niche will remain a powerful niche because of its high degree of brand loyalty to companies that target the niche as well as its buying power, which per capita is higher than African Americans, Hispanics or Asian Americans.

Tell us about the book.

Business Inside Out: Capturing Millions of Brand Loyal Consumers (Kaplan) is the first business book written on how to effectively market to the GLBT consumer.  In it, we distill breaking research trends with our partner Harris Interactive and apply more than a decade’s client experience into the core insights of Business Inside Out.  While other books have focused on specific dimensions of the gay market—political concerns, social issues, and identity—this is the first-ever resource to provide a complete, real-world approach to targeting this valuable segment.

The book includes a strong business case on why to market to the segment as well as includes examples of winning strategies from our current and former clients IBM, Volvo and American Airlines.  It also discusses the right media mix and how to measure results, giving business professionals the knowledge they need to capture the loyalty and wallets of customers in this powerful and still emerging niche market.

What are you guys working on in 2009?

We are very proud to say that we are entering our 15^th year working with American Airlines.  As their partner and agency of record in the GLBT market, we work with their committed team of professionals who truly understand the value of GLBT diversity.  The company is the airline of choice among GLBT travelers because American Airlines has earned their business through more than a decade of commitment to this market and to ensuring that GLBT employees are treated the same as non-GLBT employees in the workplace.  We are also entering our 9^th year of partnering with Harris Interactive to conduct leading edge market research on GLBT issues, helping companies to make smart and informed decisions when it comes to the GLBT market.  We pioneered GLBT market research because we know that clients that use market research as the foundation for their strategies in the market are those that are the most successful in the GLBT market.

With the change in Administration, we feel that outreach to diverse audiences will need to be at the center of any company’s strategy and we look forward to helping clients understand and navigate the GLBT landscape.

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