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Los Angeles Times, Published August 05 2012

Many businesses seek favor among LGBT customers

LOS ANGELES — Chick-fil-A President 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. Penney this 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, Amazon.com 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 and Coca-Cola were sponsors.

It’s not hard to see why. Estimates peg the self-identified lesbian, gay, bisexual and transgender demographic at about 3.8 percent 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 the Anderson School of Management at the University of California-Los Angeles. “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 at Chick-fil-A on 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 about J.C. Penney has jumped among its core female audience since DeGeneres came on as the retailer’s spokeswoman, the Palo Alto, Calif.-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 percent 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 percent of Fortune 500 companies included sexual orientation in their non-discrimination policy, up from 61 percent 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.

Microsoft Corp. launched a resource group for LGBT employees in 1993 that started with 12 members and has since ballooned to more than 700 members today. Walt Disney Co., a bastion of family values, has long offered health benefits to partners of its gay employees and permitted unofficial Gay Days at its theme parks each year.

In November, dozens of American companies filed a friend-of-the-court brief opposing the U.S. Defense of Marriage Act, a 1996 federal law that defines marriage as the legal union of one man and one woman. The signers, which include Levi Strauss, Nike and Xerox, said the legislation has had a negative effect on American companies.

“Our enterprises are engaged in national and international competition — for talent, customers and business,” the court filing stated. “That competition demands teamwork, and teamwork thrives when the enterprise minimizes distracting differences and focuses on a common mission.”

Other businesses have been moving slowly, sometimes reversing less-tolerant positions.

Cracker Barrel Old Country Store Inc. once required that any employees who did not display “normal heterosexual values” be fired. The Lebanon, Tenn.-based company now employs a nondiscrimination policy and diversity training.

In the 1990s, after being tied to anti-gay conservative groups and accused of mistreating homosexual employees, Coors Brewing Co. took on Mary Cheney as an LGBT liaison. Cheney, the openly lesbian daughter of former Vice President Dick Cheney, was so successful marketing the brand to gay events and bars that some religious conservatives took to accusing Coors of abandoning family values.

Discount retailer Target suffered a noisy boycott in 2010 after donating $150,000 to a group backing a politician opposed to same-sex marriage. The chain apologized, promised to boost its donations to gay rights groups and now sells rainbow-emblazoned T-shirts to raise money for a pro-gay-rights organization.

Other companies have either stayed quiet or made a point to separate executives’ personal feelings from official corporate policy.

“Ultimately, a company’s behavior reflects its values, and what you want is consistency in that behavior,” said James S. O’Rourke, a management professor at the University of Notre Dame’s Mendoza College of Business. “You can’t please everyone.”

Not long after Cathy’s comments, Chick-fil-A sent out an official statement confirming the company’s “biblically based principles” but also pledging to “leave the policy debate over same-sex marriage to the government and political arena.”

“The Chick-fil-A culture and service tradition in our restaurants,” according to the statement, “is to treat every person with honor, dignity and respect regardless of their belief, race, creed, sexual orientation or gender.”