The US Supreme Court's July 2013 overturn of Section 3 of the Defense of Marriage Act has renewed attention to the lesbian, gay, and bisexual (LGB) community. Although LGB households represent only about 4% of all US households, they are important because many contribute disproportionately to support the economy as consumers, the arts through both their creative endeavors and their financial support, the gentrification of neighborhoods as early pioneers, and society as leaders of early product adoption and social change. Their positive influence on society is considerable. After many years of campaigning for recognition as individuals with the same rights due all US citizens, their acceptance has been accelerated by Millennials (the last have turned age 18)—the majority of whom are ethnicity, gender, and sexual-orientation blind. Almost half of LGB household heads are Millennials.

Of LGB households, fewer than 1 million are lesbian-headed households, 2.8 million are gay-headed households, 1.8 million are bisexual-headed households; 800 000 self-report as "other." LGB households have a somewhat higher proportion of high resources—emotional, psychological, and physical—than of low resources. However, the presence of high income and a higher-than-average incidence of postgraduate education, for example, explains only in part why many are so vibrant. In comparison with heterosexuals, many LGB consumers are more experience based and are more likely to "live in the moment." In general, they require a high level of variety and are more likely than average to seek personal challenge. Packaging—physical appearance—is important in fashion, in architecture, and in purchased items. Look, feel, and visual stimulation are all compelling reasons to buy. And they do buy. For example, gay households make an estimated 711 annual transactions, in comparison with 634 transactions by straight households.

Overall, four in five LGB households are child free; the exception is bisexual-headed households—of which, 45% have children. Child-free status, for both straight and LGB households, conveys the benefit of more time and money to focus on self than households with children, boomerang kids, or dependent adults have. Without the impetus to leave an inheritance or the need to consider financial obligations such as college-education funds, childhood-medical expenses, sports equipment, dance lessons, and the like, child-free households use fewer financial products, and their net worth is lower. For example, in a comparison of gay and straight households, the former (with only a 5% incidence of children) have a net worth of $256K; the latter have a net worth of $376K (over one-third of straight households have children younger than age 18 present in the home). Debt for both straight and LGB households is the same; the difference is that, overall, because LGB households have fewer financial demands than many straight households do—and fewer competing financial priorities—their ability to pay off debt may be higher. However, a higher proportion of gay households than straight households are concerned that they may not be able to secure a loan if, and when, they need one. Quite possibly, their concerns may be grounded in past or real or perceived present discriminatory practices.

LGB households are almost three times as likely as straight households to live in a major city. As a result, they are as likely to rent as to own their home. Although rents in major cities are high, renting—on a monthly basis—may be less expensive than owning a home, with the associated expenses of maintenance and improvements. Most important, however, city living puts these consumers close to the action—good restaurants, clubs, the arts, great shopping, and a community of like-minded individuals. In a quest for affordable housing, a desire for home ownership, and an absence of concern about quality K–12 schools, some LGB households pioneer gentrification of inner-city neighborhoods such as S Street in the northwest sector of Washington, DC. LGB households are more than three times as likely as straight households to say that buying a home is their most important savings and investments goal.

Marketing to LGB households as a group is not a good idea, because major differences exist between gay- and bisexual-headed households and between gay- and lesbian-headed households. For example, bisexual-headed households are the youngest, and women head more households than do men (65% versus 35%) although interestingly, older bisexual-household heads are more likely to be men than women. Because almost half of bisexual-headed households have children, as consumers, they more closely resemble heterosexual households than other LGB households. Another example of differences is between gay and lesbian households. As a result of continued pay inequity between genders, even for highly educated professionals, women-headed households are typically more fiscally conservative than are men-headed households, regardless of sexual orientation. The majority of women investors also prefer to deal with women financial advisors.

Most LGB households form connected communities with others in their group; the internet and social media make it easy to do so. Because the majority are relatively young, they are very social, on the go, and tech savvy; new technology adoption—particularly mobile technology—is high. In fact, gay-headed households are more than twice as likely as straight households to have made peer-to-peer transactions in the past two years from a mobile device. Word of LGB-friendly establishments generates buzz among these highly networked consumers. To reach the LGB community effectively, product and service offers need selection on the basis of which type of households are targets, communications need to reinforce that you are serious about soliciting their business through demonstrations that you understand their needs, and websites and mobile apps need to be very sharp and intuitive—easy—to use. The LGB households that you want to reach most are critical; they are as likely to tell everyone they know if they've had a good experience when dealing with your enterprise as they are to tell about a bad experience.

Data for this article are from SBI's proprietary MacroMonitor—a macroeconomic survey of US households. For the first time since its inception in 1978, the 2012–13 study includes information about LGB-headed households. MacroMonitor asked respondents if they consider themselves to be heterosexual (straight), gay, lesbian, bisexual, or other. For more information about LGB-headed households, contact CFD.