Planet Money - When Subaru came out (Classic)

Episode Date: June 29, 2022

In the early 90s, Subaru was struggling to stand out in a crowded automobile market. In their greatest time of need, they turned to an unlikely ally: lesbians | Subscribe to our weekly newsletter here.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. Hey everyone. As you may know, it is Pride Month, so it's not very surprising to see a lot of marketing targeting LGBTQ consumers. But today's show, it's a rerun, it's about the 1990s, a time when inclusive marketing wasn't really the mainstream. Many people weren't using the term LGBTQ and instead were saying things like gay and lesbian. This is the story of how one company started actively considering those consumers. It's one of our favorite episodes. Enjoy. Amy Knopp lives in Indiana and owns a white 2004 Subaru Impreza. It is not a really nice car. It's really banged up.

It's almost always dirty. Even my three-year-old daughter sometimes seems to prefer to pretend that the other cars at her preschool are her car. But Amy really loves this car. This is the car that she drove through a snowstorm in Indianapolis to bring her newborn daughter home from the hospital. I just kept looking in the rearview mirror. My wife was sitting back there with the baby. It was a really happy scene in the backseat, but, you know, I was just full of terror.

The funny thing about this not-so-nice-but-bel but beloved car is that Amy ended up in kind of a bidding war over it. About five years ago, her friend Erica was selling the Subaru. Amy and her wife wanted it, and so did another couple, a guy and a woman. And Amy thinks that that couple was offering about $100 more. But Amy's friend took the hit. She sold the Subaru to Amy. She just had one requirement. You cannot peel the human rights campaign sticker off the back window. And if you don't understand exactly what I'm saying, let me let Amy explain it. She sold it to us because she wanted it to go to, like, another lesbian couple. Erica wanted her Subaru to go to another lesbian couple.

And part of the reason Amy's laughing here is that this has become kind of a stereotype, that lesbian women love Subarus. The car even has a nickname. Erica always called it the Lesburu. This is not an accident. Subaru spent more than a decade carefully targeting lesbian consumers. Hello and welcome to Planet Money. I'm Noelle King. And I'm Stacey Vanek-Smith. Today on the show, why Subaru started targeting a group of consumers that just about every other company was ignoring. And how that may have helped save the company. In the early 90s, Subaru was in trouble.

Sales had been slumping for about seven years. Subaru was competing against giants like Toyota and Nissan, and it was losing. Tim Bennett worked in sales distribution for Subaru back then, and to him, the problem was pretty clear. Subaru was having an identity crisis. These were not sexy cars, Tim says. They were boxy, reliable wagons with a certain kind of feel. It's granola. It's 10,000 maniacs. It's crunchy.

It's hippie. It's a professor in a tweed jacket. Oh, come on. Who does not want a 10,000 maniacs car? They are a great band. They're a great band. But companies want to sell to mass markets and not just hippies and professors. So Subaru hired a cool ad agency, the ones that had come up with the Just Do It slogan for Nike.

But even they could not make Subaru's hip. The ad campaign went nowhere. Morale at Subaru was plummeting. Raises and bonuses went out the window. And Tim says salespeople started making all these really dark jokes about how if things got any worse, they were just going to have to start sending new Subarus directly to the scrapyard. If you're not on a winning team, you're on a losing team, and nobody wants to be on a losing team. And is that what it felt like at the time? But the company realized one type of Subaru was actually selling pretty well.

These were cars with all-wheel drive, the kind of cars that are popular in places with bad weather. So Subaru said, all right, let's start there with the bright spot. Let's meet the people who are buying these cars. They ran some focus groups, and they identified four categories of people who were buying Subarus. The first category they called the rugged individualists, basically the outdoorsy types. So those were the people, kayakers, mountain bikers, skiers. There were technical professionals. Technical professionals. Engineers. Gotcha. That sort of thing. Educators. Teachers. Teachers. Professors. Healthcare professionals. Doctors, nurses. You know, have to get to the ER,

all kinds of weather, da, da, da. So it's a random assortment of professions here. But within those groups, there was a common thread. Women. A lot of Subaru owners were women. And in a lot of cases, they were women who identified themselves as head of household. Tim Mahoney was running marketing for Subaru at the time. And one day, he was watching a focus group in San Francisco behind a two-way mirror. time. And one day he was watching a focus group in San Francisco behind a two-way mirror.

One of the guys who actually worked for a research company who happened to actually be gay, he says, yeah, all my friends that have been on Subarus are lesbians. And it was like one of those moments where everything came into focus and it's like, oh, wow. Tim Mahoney realized he may have just discovered a fifth group who loved Subarus, lesbians. So now Subaru has to figure out two things. Number one, is this true or is it just anecdotal? Is this actually a significant consumer group for Subaru? And then if it was, how are they going to market these cars to lesbians? So Subaru got in touch with Mulryon Nash.

This was a tiny ad agency based in Manhattan that specialized in marketing to gay and lesbian consumers. John Nash was the creative director at the time. What was the first campaign you worked on? It was Dial-A-Mattress. Dial-A-Mattress? 1-800-M-A-T-T-R-E-S-S. They're out in Queens. John and his business partner, Dave Mulryon, were both openly gay.

And they would go to these big companies and they would pitch them. They would say, look, gay and lesbian consumers are a big deal. They have money and we know how to talk to them. Hire us to design new ads for them. So with Dial a Mattress. He did these billboards and beautiful photography of a guy like, like it was all very arty, a guy laying on his stomach, but you could see, you know, he had the, he was, it wasn't wearing any clothes, but he had the sheet pulled down. Who you sleep with? Yeah, here it is.

Who you sleep with is your business. How you sleep is ours. Dial a mattress aside, it was a tough sell. This was the early 90s. It was during the AIDS crisis. And a lot of companies would not talk directly to gay and lesbian consumers because they were afraid of alienating heterosexual consumers. to gay and lesbian consumers because they were afraid of alienating heterosexual consumers. In fact, John says a lot of the companies that did advertise to gays and lesbians were what he calls the sin industries, like booze and cigarettes.

And then out of the blue comes this call from Subaru saying, hey, we think lesbians might be one of our most significant markets and we need to confirm it. So John and his colleagues went out to Northampton, Massachusetts. Subaru's research said a lot of its cars were being sold there. And they gathered a little group of local Subaru owners together into a room with one of those two-way mirrors. So we get up there. We're in the observation room, which always has, like, M&Ms and crackers. It's a very dangerous place to be, especially if you are on any kind of a diet.

So there's all that candy. And then the women start coming in. But only women. You know, that's the amazing thing. 100%. There were no men. No, no men in either group. John watches the women from the other side of the mirror while a researcher asks them questions. What do you use your car for? I want to move my dog from here to here.

I like throwing my stuff in the back and going camping. John said as a human being, he hates this kind of stereotyping. But as an ad guy, this is sort of what you do. You break people up into categories. You say broadly, here's what they're like. And then you try to sell stuff to him. So this is exactly what he's doing. He's looking at these women and he says to himself, I think they are part of a specific group. I'm like, these are lesbians we're talking about. They're lesbians. Okay, not just that. But these women seem to love their Subarus.

So John and the ad agency drive down to Cherry Hill, New Jersey, which is where Subaru is headquartered, to pitch the company. This was not a small deal. I think a lot of us forget this, but the early 90s were not a particularly progressive time, right? This is the era of don't ask, don't tell. In just a couple of years, Bill Clinton was going to sign the Defense of Marriage Act, which would effectively say same-sex partners cannot be considered spouses. And even inside Subaru, being openly gay was not easy. Tim Bennett, the guy who

saw Subaru having an identity crisis, he later worked on this campaign. Tim is gay, and he never came out at Subaru because he saw what could happen if he did. There was an out gentleman who was gay in the mailroom. There were people in the office that didn't want him to deliver mail to their desk because they're afraid they're going to get AIDS. So this is the environment. I know a lot of people think, ah, they can't be. No, it's what happened. So here comes Moriah Nash into this conference room with about 20 Subaru bigwigs. John and the team start a PowerPoint presentation. Here is who we are. Here is what we were doing in Northampton. And then? And then it was time for the bombshell, basically. And I think that was like six or seven panels into this PowerPoint thing. And I think that was like six or seven panels into this PowerPoint thing. You know, you click the button and up pops this thing, you know, the target consumer in Northampton is a lesbian woman.

John is braced for resistance. I mean, you have to remember his agency had been going to companies for years with numbers, statistics, data saying, look, gay and lesbian consumers are very important. You need to start marketing to them. Look at the numbers. And companies had been looking at this and saying, very interesting, but no thanks. And now here he is pitching to a car company, which is like the definition of mainstream. And he's telling them, you got to market your cars to lesbians. In the middle of the pitch, John keeps sneaking these glances at the president of the company, trying to figure out what he's

thinking. He just kind of nods and he sits and he crosses his arms. And, you know, you always learn in business that when people cross their arms, they're closing themselves off to you or something crazy like that. That's why you always have to be careful at a cocktail party. Don't cross your arms. Other people around the table are also looking at the president of Subaru, wondering what's he going to do? What's he going to say? But he doesn't do or say anything. He just keeps watching the pitch. So they finish the presentation and then?

He goes, I don't need to invent a group to speak to. It looks like you found a group of people we can already talk to. He said, so this looks like a good thing. He didn't freak out. No. Not only did he not freak out, he hired them. Now remember, this is a car company. This is what every ad agency dreams of. And now this tiny little ad firm has been hired to create ads for gay and lesbian consumers for Subaru. Now, of course, they had to get down to designing the actual ads. And John says this proved to be a little bit tricky. I mean, remember, they were breaking new ground here. And so John had to find ads that would fit both with the image that Subaru had been cultivating for years and years, and with this new group of consumers it was trying to target. That's right. In fact,

John showed me the first print ad that he did in 1995. And so what it is, is there's a Subaru up at the top, right? And there's two women down at the bottom. And the headline is, it loves camping, dogs, and long-term commitment. Too bad it's only a car. It's good, right? It's good. It's good. And then down at the bottom, there's a picture of two women. Well, when the ad first went to the executives, the two women were together. The executives see this and they tell John, listen, listen, separate them, please. Put some copy in between them. Yeah, they're like in opposite corners of the page.

That's right. Looking at each other, though. Well, they're not looking at each other. Looking over the text. Looking over the text. Looking over the text at each other. From this, John says they kind of settled into a plan where they would use references that were obvious to gay and lesbian consumers, but not really to anybody else. And at the time, there was Xena, Warrior Princess, was a show that was airing like on the WB network or something. And the lesbians loved Lucy Lawless. And everybody loved Xena.

So one of the license plates was going to be Xena Lover, X-E-N-A-L-V-R. One of them was P-Townie, P-Townie. For Provincetown. For Provincetown. And the other one was Camp Out. It was so subtle. The message was there, but you would have to look at the license plate on the car in the picture in the print ad to get it. John was in San Francisco when the ad campaign launched.

He was at a bus stop, and a bus pulled up to the stop with his ad on it. I immediately looked at everybody standing there. A bunch of old ladies look at the cars, don't do a thing. Two gay guys, and believe me, I knew they were gay. Gaydar, finely tuned. They both look at each other and just kind of smile like they got it. Yeah, they got it. And about two years after this campaign started,

Subaru sales started growing. The niche marketing was working. Remember those groups that Subaru had identified, the outdoorsy types and the nurses and the engineers? Subaru had been marketing to all of them, and its sales were going up. And then, in 2000, Subaru made a bold move aimed right at lesbian consumers. Martina Navratilova. Subaru hired the retired tennis star, who was one of the most high-profile lesbians in the world at that point to do this

big ad campaign. What do I know about performance? What do I know about control? What do I know about grip? Everything. She knows everything about grip. Everything about grip. Pam Derderian was responsible for this campaign. She runs a marketing firm called 15 Minutes, Inc., and she introduced Martina Navratilova to the people at Subaru in the 90s. And she says this was the moment when Subaru's niche marketing campaign became not so niche. She was on mainstream television commercials promoting the cars. She was in print, promoting the cars. She was in print ads, promoting the cars. She was in outdoor billboard advertising, promoting the cars. She was in mainstream advertising.

Not that there wasn't some pushback. Subaru had always faced resistance from some of its dealers who had problems with its print ads. But when ads started to hit TV, the campaign got a lot more attention. This wasn't just Xena on a license plate. These were really high-profile ads. John Nash said there were angry letters, fears of a boycott. It's anxiety-inducing only because you don't want to lose one of your favorite clients over something that's completely out of your control. If the business marched away, it was going to be because someone wrote a letter in crayon saying, you know, how dare you sell cars to these dirty gay people.

for product placement. There was a show on Showtime called The L Word, and Pam Derderian helped create a storyline on The L Word where a lesbian tennis player got an endorsement deal with Subaru. So, guess who's having an event and wants you to come? Subaru? Yeah, so Subaru's hosting a dinner, some kind of charity event to support the arts in the public schools. It's going to be teaming with the Who's Who.

How hot is that? Pam Derderian says all of this was a really big deal. All of this was a watershed. I kept using the term niche marketing, and she kept shutting me down and saying Subaru went so far beyond niche marketing. We're a more comfortable society. beyond niche marketing. We're a more comfortable society. I mean, who would ever think that an ABC program, Modern Family, two weeks ago would have a nine or eight-year-old transgender character on? This is not niche any longer. This is just being out and proud and owning who you are and living in a diverse, inclusive society. By about 2006, Subaru had grown into a very steady success. It wasn't Toyota,

wasn't Ford, but its numbers were going up. And when the recession hit, Subaru was the only car company in the U.S. not to lose market share. But in spite of the success, Subaru seems to have kind of changed direction. I mean, if you look at their ads now, there's no Martina Navratilova, no Xena. Instead, most of the ads feature heterosexual, kind of outdoorsy couples on their way to a hike and things like that. And at a moment when our societies become so much more inclusive, it's strange. Like, why did Subaru back off? We have that after the break. I called Subaru and I asked a spokesman.

And he said, it's true. We don't directly target gay and lesbian consumers anymore. Our ad campaigns these days focus on our customers' hobbies and interests. Like mountain biking and kayaking. Right. Pam Dardarian has a theory about this. She says since the 90s when this started, so many more people are just living out and what was niche is now just much more mainstream. So niche marketing is kind of passe. Right. Like niche marketing became a victim of its own success. And of course, that raises the

question, do ad campaigns actually influence the culture or do they just reflect the culture? Yeah, I kept asking myself that question. And the answer is I honestly don't know. campaigns actually influence the culture? Or do they just reflect the culture? Yeah, I kept asking myself that question. And the answer is I honestly don't know. I put that question to Amy, the woman from the beginning of the show who owns a Subaru and loves the Subaru. And she said, honestly, she does not know either. But then she told me this story. Amy went to college in small town Kentucky in a place that was not especially friendly to gay people. She did not have an easy time. And then after school, she moved to Washington, D.C. And one day, she's in DuPont Circle, and she sees this Subaru ad.

And I remember seeing this ad on a bus stop that said, it's not a choice, it's the way we're born. And it made me smile. It made her smile because it was talking to her. It's not a choice, it's the way we're born. She made her smile because it was talking to her. It's not a choice. It's the way we're born. She knew exactly what that ad was saying. And not everyone would have known exactly what that ad was saying. It was an inside joke.

And Amy was finally on the inside. We are giving away Planet Money prizes. Enter for a chance to win free merchandise and a year of Planet Money Plus so you can enjoy bonus episodes of Planet Money with sponsored free listening that works on the indicator too. To enter, just go to npr.org slash planetmoneygiveaway. No purchase necessary. Open to legal residents of the U.S. 18 and over. Ends August 30th, 2022. Today's episode was originally produced by Sally Helm.

Special thanks to Dave Moran, Mary Treisbach, Rebecca Lindland, Paul Pooks, and Allison Kane. The idea for this story came from Alex Mayasi. He wrote a great story about this, which you can find at priceonomics.com, and we will include a link for that in the show notes. The rerun was produced by Sam Yellow Horse Kessler and engineered by Gilly Moon. Jesting edited the show, and Alex Goldmark is our executive producer. I'm Mary Childs. I'm Stacey Vanek-Smith.

And I'm Noelle King. Thanks for listening. and a special thanks to our funder the alfred p sloan foundation for helping to support this podcast