Pride and Purchasing Power: Values-Based Marketing

Pride may be one month a year, but LGBT consumers make purchasing decisions every day of the year. The Human Rights Campaign, the nation’s largest LGBT civil rights organization, published its yearly “Pride in the Marketplace” report on June 16. The report summarizes how and where LGBT consumers spend their money and the decisions they make in the marketplace. While many brands choose to make a statement during Pride, LGBT consumers are evaluating whether corporate actions align with stated values year-round. Once a brand makes the decision to speak publicly about inclusion, support, community engagement or corporate values, those statements may operate like any other advertising claim, subject to consumer perception and potential scrutiny if the message is misleading, incomplete or inconsistent with the company’s actual practices.

LGBT consumers are not a niche audience; they represent more than $1.4 trillion in annual U.S. spending power. The report explains that 71.5 percent of LGBT consumers bought fewer products from companies perceived as reducing their inclusion commitments, while 65 percent of LGBT consumers directed purchases toward brands committed to inclusion. LGBT consumers, when compared to non-LGBT consumers, are more likely to change their purchasing decision based on a company’s perceived commitment to inclusion.

Pride this year has seen a nationwide drop in support and financial contributions from companies. Corporations are evaluating which causes to support and which to abandon during this period of political polarization, and many are deciding to abandon or cut back on their previous commitments to the LGBT community. According to the report, 69.4 percent of LGBT consumers refused to buy from brands that were reducing their inclusion commitments. Brands often communicate inclusion through their advertisements, charitable giving, retail displays and social media content. While blanket claims of “support” or “commitment to inclusion” are difficult to substantiate, the more precise and exact a claim of support can be the more likely to lead to liability if that support is not met. If a brand makes a commitment to give a certain amount of money or donate a portion of sales, it must follow through with that promise. But a simple claim of “support for the LGBT community” during Pride Month is likely nonactionable rainbow washing. The more balanced approach is not necessarily silence; it is precision. Brands should say what they do, explain what they mean and avoid implying more than they can support.

While the report shows that inclusion-based marketing can have real marketplace consequences, from a legal perspective the takeaway is much broader: Values-based marketing should face the same rigor as other claims. Brands should be clear about what they are saying and prepared to substantiate commitments they are putting into the marketplace. In Pride campaigns and beyond, trust is built not just by being visible but also by being accurate, consistent and accountable.