A recent survey by researcher Greenfield Online shows gays and lesbians are a growing market segment in online financial services. The percentage of gays and lesbians investing online has grown to 20% in March 2000 from 14% a year earlier, and those banking online have grown to 43% from 33% in the same time frame.
Mainstream marketers such as Fleet Securities, Merrill Lynch & Co., Conseco, Cendant Mortgage, American Express Co. and others are increasingly tapping the gay and lesbian consumer directly, both online and through traditional media.
Financial services marketers are increasingly targeting special-interest groups to build market share without resorting to discounting and other profit drains, says Jim Dean, product manager of Information Services Group at Greenfield Online. In that respect, gays are another market segment with potential, he says.
The Internet has been very well received by the gay community because it lets consumers handle matters with privacy, says Walter Schubert, chairman-CEO of Gay Financial Network, a 2-year-old financial portal for the gay and lesbian community.
Many gay customers are still closeted in their everyday lives, so the anonymity of the online environment is a plus, explains Steven Dunlap, founder of G&L Internet Bank, an online bank targeted at gay and lesbian customers.
The Internet allows gays and lesbians to handle transactions that would require them to disclose their situation, such as filing joint mortgage application with their domestic partner, he adds.
"It's something they feel comfortable doing with us they wouldn't feel comfortable doing with Chase [Manhattan Bank]," says Mr. Dunlap.
The discussion of finances is a very personal affair that can be trying for gay consumers, adds Mr. Schubert.
"You either worry about a homophobic reaction or even if you don't get a homophobic reaction, you can get a `homo-ignorant' reaction," he says. "It's not so much about creating an ATM machine for you."
SWIPE AT `HOMO-IGNORANT'
GFN's ad campaign, from Mad Dogs & Englishmen, New York, takes a swipe at those "homo-ignorant" attitudes in print ads that show bankers misunderstanding terms such as "partner." In one ad, a cigar-chomping gent in a pinstripe suit smiles, "You're gay! Well, I'm feeling quite happy myself," while another features a banker saying, "Two ladies living together -- look out fellas!" The ads broke in February in general-interest publications such as The Wall Street Journal and Entertainment Weekly, as well as gay and lesbian publications.
G&L Bank also launched an ad campaign in February that included page print ads in gay and lesbian publications such as Out and The Advocate and 30-second spots in cable programs targeted at the gay community. The campaign, created in-house, will extend in September to general-interest publications that reach a gay audience, such as Men's Health and Vanity Fair, says Mr. Dunlap.
G&L Bank also sponsors events and promotions, including Gay Pride parades, benefits for Americans for AIDS Research and the GLAAD Awards sponsored by the Gay & Lesbian Alliance Against Defamation.
"We are a community bank . . . only we operate on the Internet," says Mr. Dunlap.
The executive says glbank.com has had nearly 225,000 hits since it went online Oct. 11, and the bank has accounts from all 50 states and some foreign clients.
Gfn.com has also grown significantly since its launch in 1998. Over the last year, it struck deals with vendors including E*Trade Bank, Cendant Mortgage and brokerage operation U.S. Clearing to provide services.
Some marketers have been reluctant to tie in with other gay-centric media because many offer adult content that more conservative financial services marketers would not want associated with their products, says Mr. Schubert. That is a selling point for GFN, which has no adult content and won't tie in with adult sites, he says.
"It's a very easy sell," says Mr. Schubert. "It's recognizing that the people who visit gfn.com are there for financial services."