Transforming LGBT Purchasing

By Neal Broverman

Originally published on Advocate.com December 18 2012 10:43 AM ET

A new business initiative called OSL Holdings has grand ambitions to change spending habits among African-Americans, Latinos, women, and gays. OSL wants to connect the dots between minority shoppers and the companies that support them; their hope is to also communicate to major companies that marketing to these groups is profitable, and to provide tools to corporations to see if they're reaching such people. They also want to direct business owners to minority-owned suppliers, so if an ally wanted to support a lesbian-run pet store, for example, they would easily know where to find one. Though the company is for-profit, they also have a built-in philanthropic angle, with a planned rewards program that allows people to direct some of their purchases to equality organizations like GLAAD or the Human Rights Campaign. OSL's first endeavor is to take on the LGBT market, which the company's directors see as full of potential. Company founder Eric Kotch, president Robert Rothenberg, and Steve Gormley, the president of Data Now, an OSL division, sat down recently to talk about their plans.

The Advocate: Can you explain what OSL wants to do?
Rothenberg: Basically, we’re a data technology company and our main goal is to expose data from untracked markets and connect buyers and sellers for a transaction within the diversity space. So, we're really creating tools, data, and technology that bridges a gap in the market. Both data that’s not exposed today and connecting consumers and corporations or businesses and businesses together.

Our data business is taking data not accessible today in off-grid retailers and exposing that to major brands and getting that data in front of them so they can know what’s happening at the consumer level with their products and services. The diversity division — it’s creating the tools to expend the marketplace in identifying the LGBT community, identify LGBT-owned businesses with major corporations so they can contract with them and do some business.

Gormley: OSL is a publicly-traded company. We want the public to know that there are small-cap public companies that are LGBT-friendly. We have a suite of these transaction-oriented software platforms and we call it the Think platform. It’s essentially a transaction-centric social network. It interactively identifies, incentivizes, and connects this community of retailers, suppliers, and consumers all while generating data and valuable analytics. And our diversity platform was really developed from the philosophical standpoint of wanting to help minority-owned businesses increase transaction and revenues. And help the major corporations better identify LGBT-run, women-run, African-American-run, veteran-run businesses so they could come out and better support these verticals. Part of the reason we’re really pushing for the LGBT vertical to be our first is because of the inflection point with where the community is politically right now. Look at the Hispanic community, the African-American community, and women-run; these verticals have had institutionalized support between 30 and 50 years. When you look at LGBT verticals, which is still fighting for its civil rights, we really felt that we wanted to create or leverage our tool-set to enable major corporations to take a pro-active stance to support LGBT businesses, suppliers, and consumers and those businesses, suppliers, and consumers who support LGBT causes.

We really believe strongly in the supplier diversity initiative that’s been created and launched by the National Gay and Lesbian Chamber of Commerce. Theur program is looking for business tools that opens doors with major corporations and LGBT-certified business enterprises. So, we’re another tool set in that campaign, if you will, to put LGBT businesses, suppliers, and consumers on the map and make support for these businesses visible.

Kotch: What we’ve put together is technology where we believe that there’s tremendous corporate and consumer support for the LGBT community. And the supporters currently don’t really have the tools to show that support. That’s the most obvious with these corporations who want to do business with LGBT businesses but don’t have all the information, tools, and access to identify them, to solicit bids, to track them, to monitor them. And we provide that. Another thing that is exciting about this group is that the corporate support is very widespread, but also non-corporate support, straight-identifying support, we have tools with a rewards program that allows the general public to show its support for gay rights. People have no way of showing that support [through their purchases]. Realistically, these major corporations wouldn’t be supporting this community if their employees, customers, and shareholders didn’t feel the same way. So what we’re trying to do is not only give the corporations the tools to show their support but regular, everyday people, whether they’re LGBT or straight. 

Gormley: We really believe we can really augment the efforts of HRC’s Corporate Equality Complex and create opportunities for corporate crusaders to come out and take a stand like Chris Kluwe of the Minnesota Vikings. We think that once corporations have the tools to see how the general public really feels about the LGBT community, that LGBT people are in every family, in every community, they are incredible consumers, [they'll change their policies]. We want to provide the tool set to reward those corporations because we know that ultimately makes a difference at the ballot box and changing the way people think about these issues.

Rothenberg: For the actual small businesses, we give them tools like a rewards program, and it’s the impetus to try to get people to activate and incentivize them to take an action and do the right thing and support a cause and get a discount at retail or these corporations to do transactions. The biggest thing for us is we can enable the entire community, both one that supports and one that wants to show their support, through retail transactions.

How did the idea for OSL come about?
Kotch: We started out with one product line and were coming up with a marketing strategy and started with office products, which is really boring. We said, 'People don’t care about this stuff. How do you sell stuff that people don’t care about? Maybe sell it to people who care about something else.' So we started thinking about how corporations were motivated by diversity purchasing and after we spoke to dozens of corporations, they made it really clear to us that the data and technology we had access to they really wanted

Rothenberg: I liked the idea I was working for a digital marketing agency. One of the things is people get passionate about is directing their dollars towards something with a higher purpose. That was one of the things behind the thought process, we could create these amazing tools and have a positive impact beyond just our line, transcend the transaction for a higher purpose. And that solves both problems: how do you grow something organically with support and how do you make it profitable in the same stroke. I think that’s where marketing is headed with a lot of brands. We saw an opportunity to provide the infrastructure to do that. We can capture data for brands at transaction level when people are buying things, to help brands better understand who are supporting not only them but the products and the causes out there. No one’s really doing it out there in this way.

So you could find out who's buying pineapple vodka at a West Hollywood liquor store, for example?
Rothenberg: Not only the neighborhood, but also looking at the people who could purchase but who’s not purchasing. Just because the neighborhood’s made up a certain way doesn’t mean the transactions are happening with those people. It’s understanding the difference between the community and who’s purchasing; that’s a classic example of who would want to have that sort of information across thousands of locations like that across the country. If they’re running a promotion targeting the LGBT community, is it having an effect at the transaction level? So if they’re supporting a Gay Pride event in California, but are they actually having an impact? We can expose that and better understand the demographics of who’s buying. We’re also going to be controlling things at point of sale. Let’s say they were going to buy a different vodka than Absolut, Absolut can say, ‘We’re supporting a local event, so show some support for us by buying our vodka.’

Gormley: You guys recently published an article about why we still buy from antigay businesses. And, basically, it was ignorance. This platform we’re extending can mitigate that. It empowers the consumer to have a conscience at the point of sale.

Tell us about how you’re connecting consumers with charitable organizations.
Kotch: What we’d like to do is partner with an appropriate advocacy group with each vertical and we’d love to start with the LGBT community and together with them decide what causes we want to support. Our revenue is based on a small transaction fee, so we’d work jointly with the advocacy group to direct a percentage of that revenue to whichever cause was most appropriate and rang the most true to the supporters and the consumers. It allows people to say, 'When I’m going to spend my money, I’m going to tell the world what I believe in.' But it doesn’t cost people extra money to do that.