Localizing Diversity & Globalizing Returns II
Customer Diversity in Sales and Marketing
This is the second installment of the LDGR series focused on examining the impacts of DEI on individual business units and how organizations can implement practices to reap the returns.
Typically, the conversation around diversity, equity, and inclusion (DEI) within an organization is not focused on the sales and marketing teams. The rare times that it does surface in these areas, it is either in regards to hiring or in response to a media crisis. But beyond hiring diverse teams, focusing on DEI in these business units directly impacts a company’s top and bottom lines. In order to reap the ultimate returns on DEI, a company must develop strategic customer diversity initiatives that center on an understanding of the audience and the ability to tell their stories.
Know Your Audience
As the study that is the jumping off point for this series illustrates, a major turning point for the economy of the U.S. was the expansion of access and opportunity for women and people of color. With increased access to education and high-paying jobs came social mobility and increased buying power that has only increased over the years, making consciousness of customer diversity more important than ever.
It has long been shown that customer diversity initiatives lead to revenue stability for organizations. It is pretty intuitive when one thinks about it: the more sources of income you have, the less you have to worry if one source becomes unstable or say, if a customer leaves. Such initiatives, as one Deloitte study finds, also reward organizations through stalwart supporters who return for repeat business and actively campaign within their communities on behalf of that company. In other words, customer diversity creates both brand ambassadors and informal sales teams that actively campaign within their networks. Even with these benefits, however, customer diversity initiatives remain a rarity. In reality, most companies do not design products with difference in mind, and often establish a singular customer profile without taking into account trends in consumer buying power. For example, Black women — the fastest growing group of entrepreneurs in the U.S. — rarely find themselves to be the focus of a product, hence the movement to simply build it themselves.
Not understanding the vast capital held by growing demographics is a costly oversight. In 2017, the combined buying power of Black Americans, Asian-Americans and Native Americans was estimated to be $2.4 trillion, while the nation’s Hispanic/Latinx population held $1.5 trillion in buying power. Let’s not forget the $1 trillion purchasing power of the LGBTQ community. If individual buying power means less to your organization because your focus is more B2B sales, then consider estimates put forward by the U.S. Small Business Administration, showing the trillions of dollars in annual receipts from women and minority-owned businesses. As the U.S. experiences continuing shifts in the demographics of the population, these numbers continue to trend upward.
Tell Their Stories
Beyond understanding the numbers, leadership must be connected to the customer base and have a strategy in place that caters to different demographics within your target market. In this globalized economy, it is unlikely that major organizations or those with growth aspirations will conduct business without engaging with people from different backgrounds and cultures, be they customers or employees. Therefore, it is imperative that organizations continue to actively hone their skills in engaging across difference in order to accurately tell the stories of customers.
Many companies espouse a “customer first” value or mentality, yet as with sales organizations, the customer profile they have in mind is often not dynamic. This leads to sizeable populations being unable to see themselves in or using the product, tone deaf messaging and a disconnect from social issues, and ultimately stifled growth. In the last few years, there has been an uptick in the number of company ads that feature people who have not traditionally been the subject of major campaigns. For example, Dove began featuring women of color and different body sizes to more accurately reflect their customers. General Mills featured LGBTQ parents in their Cheerios ad, as did Campbell’s Soup. Even major brands like Old Navy, State Farm, and Macy’s began featuring interracial couples in their ads.
While each of these companies received backlash from those who were uninterested in seeing different people, the financial benefits of inclusive advertising are clear. Fenty Beauty, Rihanna’s cosmetic line that has been hailed for its inclusivity, earned a record-breaking $72 million in Earned Media Value in its first month and garnered honors from Time as a result of its focus on the diversity of complexions in both product and advertising. If increased growth and revenue are company business objectives, then marketing teams must have a strategy that actively engages the diversity of customers. Andrew McCaskill, Nielsen’s Senior Vice President, Global Communications and Multicultural Marketing, put it plainly, “With 43% of the 75 million Millennials in the U.S. identifying as African American, Hispanic or Asian, if a brand doesn’t have a multicultural strategy, it doesn’t have a growth strategy.”
Not only does representation matter in marketing materials, the ability to accurately tell user stories and to create conscious messaging is key to maintaining positive relationships with customers. But the vast majority of marketing that is focused on featuring underrepresented people is often in response to a crisis or criticism, not because there is an intentional and strategic focus on these populations. In the last few years, a number of companies have suffered significant losses because of their disconnect from issues that matter to their customers and the responses given by leadership or in general messaging. Starbucks, Papa John’s, H&M, PepsiCo, Nivea, and numerous others have experienced first-hand the detrimental impacts of being out of touch with underrepresented populations. This could be resolved if companies did their due diligence and conducted extensive market research, with a particular focus on engaging underrepresented groups. This would help companies to better understand the power and nuance of particular phrasing and how such messages are received in different global communities. Having a diverse marketing team is incredibly important, but you must also take the time to build relationships with diverse communities and engage them.
Marketing strategies are hardly ever simple, and a multicultural marketing strategy is no exception. But if the marketing team shifts some of its focus to actively building relationships with customers, they would be able to more accurately tell user stories, help other populations see themselves in the product, and have a more conscious understanding of messaging.
So, What Do I Do?
Sales and marketing organizations can see immediate returns on DEI initiatives, largely because they are the epicenter for both demand generation and revenue. While every organization’s approach should be tailored, here are the general actions to get started:
- Do your research: Take the time to review buying power and spending trends by key demographics, and engage with these audiences to understand what resonates with them. Explore use cases for the product with customers and assess if customers see themselves in or even using your product.
- Develop a strategy: Armed with qualitative and quantitative data, craft a framework and a set of measurable goals aimed at growth within underrepresented communities. This should range from brand identity and trust indices to overall sales.
- Stay woke: Remain conscious of historic and current events that may have disproportionately negative impacts on underrepresented people, and ensure your messaging reflects this awareness. Attend events hosted by and partner with organizations that focus on underrepresented populations in sales and marketing to ensure that the perspectives of these professionals are constantly part of the decision-making process.
As always, take part in the conversation in the comment section or share the articles along with your thoughts.
Ulysses J. Smith is a strategist and consultant. He is founder and CEO of Archetype D&I Consulting. Connect with him on LinkedIn and Twitter. Follow Archetype on LinkedIn for more updates.
References
- “Missing Out: The business case for customer diversity,” Deloitte (2017).
- “The Most Successful CEOs Embrace Customer Diversity,” Forbes (2014).
- “Small Business Facts & Infographics,” U.S. Small Business Administration (2018).
- “raceAhead: A New Nielsen Report Puts Black Buying Power at $1.2 Trillion,” Fortune (2018).
- “Black Impact: Consumer Categories Where African Americans Move Markets,” Nielsen (2018).
- “UGA report breaks down ‘buying power’ by demographic,” Atlanta Business Chronicle (2018).
- “The Multicultural Economy 2018,” University of Georgia (2018).