Feature
The Gist
- DEIB is a business imperative. Companies that embed diversity, equity, inclusion, and belonging (DEIB) into their operations gain competitive advantages in customer loyalty, innovation, and talent retention.
- Performative DEIB efforts backfire. Customers and employees alike can detect insincerity. Superficial diversity statements without internal alignment risk backlash and long-term brand damage.
- Leadership and accountability drive results. Experts stress that lasting DEIB success depends on embedding it into business strategy—not treating it as a side project for HR or marketing.
Why DEIB Is More Than an Ethical Imperative
A diverse customer base expects brands to understand and reflect their unique perspectives, values and needs. Businesses that integrate diversity, equity, inclusion and belonging (DEIB) into their operations don’t just meet ethical or regulatory expectations—they gain a competitive advantage.
Studies consistently show that diverse teams drive innovation, improve decision-making and enhance problem-solving, leading to stronger financial performance. Additionally, inclusive workplaces improve employee engagement, reducing turnover and increasing productivity.
But perhaps most importantly, when DEIB is woven into company culture, customer interactions become more authentic, relevant and personalized—leading to improved brand loyalty.
This article explores how DEIB influences customer experience, employee performance and business outcomes—framing it as a strategic imperative, not just an ethical concern.
Table of Contents
- The Population Is Increasingly Becoming More Diverse
- Diverse Leadership Better Understands Diverse Customers
- Making DEIB a Core Business Strategy
- The Business Case for Diversity
- Diversity Sends a Powerful Message to Customers
- Brands That Operationalize DEIB Build Trust—Those That Don’t Face Consequences
- The Business Case for Lasting DEIB Commitment
- Core Questions About DEIB
The Population Is Increasingly Becoming More Diverse
According to 2025 statistics from Neilsberg, the United States is a racially diverse nation, with over a third of the population identifying as nonwhite or multiracial. While 63.44% of the 340,110,988 Americans are white, significant racial and ethnic diversity is reflected in the 12.36% African American, 5.82% Asian, and 10.71% multiracial populations. Additionally, 0.88% identify as American Indian or Alaska Native, 0.19% as Native Hawaiian or Pacific Islander, and 6.60% as some other race. This rich demographic mix underscores the importance of inclusive policies and representation across industries.
As the customer base grows more diverse, brands must carefully consider how they communicate and position themselves.
Justin Angle, associate professor of marketing at the University of Montana, emphasized that the most effective brands cultivate aspirational connections with customers, not through demographic-based targeting, but by appealing to shared behaviors, values, and emotions.
"The best brands use aspiration to attract customers. This requires walking a fine line between welcomeness and exclusivity. Brand managers must have a strong sense of who their customers are and aren’t, and defining this sense along any demographic characteristic is unwise, especially now," said Angle.
The Pitfalls of Demographic Targeting
Angle recommended that brands focus on what their ideal customers think, feel and do rather than attempting to target specific racial or gender demographics. "Explicit appeals to any specific demographic group should be done with care. Though it can attract new customers from that group, it runs the risk of alienating customers from other groups or being seen as virtue signaling," he said.
Beyond customer engagement, Angle stressed that true commitment to DEI must go beyond marketing—it should be embedded in how businesses treat employees and stakeholders.
"Authentic embrace of DEIB requires commitment throughout the organization, not just in marketing communications," he added. This holistic approach ensures that brand’s efforts don’t appear as performative activism, but rather the embodiment of diversity, equity and inclusion across all aspects of their business—from hiring practices to leadership representation and corporate culture.
Related Article: Double up on DEI: The Real Impact on Customer Experience
Diverse Leadership Better Understands Diverse Customers
In recent years, businesses have faced increasing scrutiny over DEI efforts, with many reevaluating their approaches to leadership and workplace culture. As a result, a recent Chatmeter report on customer feedback revealed that customer mentions of discrimination increased by an average of 16.5% in 2024 compared to 2023, indicating a potential emerging reputational threat as retailers have de-emphasized DEIB programs.
Why Belonging Is the ‘B’ That Matters
Kimberly S. Reed, M.Ed., CDE and CEO at Reed Development Group, emphasized, "DEI is not enough. Using it is not enough. Saying it is not enough—anymore. Please include the ‘B’ for Belonging. It is vital in this salient work to make a significant impact and contribution in the growth of our organizations, to the communities we serve, and to our nation’s vitality," said Reed.
Despite the growing body of research linking diverse leadership to business success, Reed warned that DEIB efforts are facing increasing pushback. She attributed this decline in corporate support to a lack of communication, education, leadership, emotional intelligence and accountability—factors that determine whether diversity initiatives succeed or falter.
"Diversity has been a prominent theme since the 1960s, but the focus has amplified in the past decade. It used to be a 'nice to have.' Today, it has become a qualifying minimum," she said.
Making DEIB a Core Business Strategy
Reed reiterated that the most effective diversity initiatives stem from business strategy rather than HR-driven programs. She believes that diversity efforts often fall short when treated as standalone initiatives rather than being woven into an organization's long-term goals.
"The most effective approaches to fostering inclusion and diversity stem from business strategy, rather than solely relying on HR programs," she said. "This is one of the key reasons for the shortcomings in today’s organizations."
Related Article: Diversity Fatigue: How Brands Can Keep the Momentum Going
Embedding Accountability Across the Organization
One critical way to ensure the long-term success of DEIB efforts, Reed said, is to hold businesses accountable for real, measurable progress. Institutional responsibility, she argues, is essential. This includes:
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Linking diversity efforts to innovation and financial performance
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Fully integrating Employee Resource Groups (ERGs) and Diversity Leadership Councils into company culture
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Allocating sufficient budgets to ensure sustained progress
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Creating leadership structures that drive meaningful change
The Business Case for Diversity
Beyond ethics and compliance, Reed said that diversity directly impacts business performance. She outlined three key reasons why corporate leaders should continue prioritizing DEIB:
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Innovation & Growth – Diverse perspectives encourage creativity and drive innovation, making businesses more competitive.
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Market Relevance – Companies with diverse leadership better understand and connect with their customer base.
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Talent & Retention – A commitment to DEIB makes companies more attractive to top talent and improves customer loyalty.
"Leaders recognize that diversity and business performance are interconnected and essential for achieving strategic objectives, maintaining competitiveness and creating long-term value for the CEO and corporate board," Reed explained.
Why DEIB Must Outlast Market Trends
With DEIB under increasing scrutiny, Reed urged business leaders to resist the temptation to deprioritize these efforts in the face of economic or political challenges. Instead, she advocates for embedding accountability at all levels—ensuring that DEIB remains a core part of business strategy, not just an initiative that comes and goes with market trends.
Key Benefits of DEIB for Business Success
Here’s a quick summary of how DEIB drives tangible value for businesses, from financials to innovation.
| Category | DEIB Impact | Business Outcome |
|---|---|---|
| Innovation | Diverse perspectives spark creativity and problem-solving | More competitive products and services |
| Customer Experience | Representation increases relevance and personalization | Higher satisfaction and loyalty |
| Leadership | Diverse leaders better understand diverse markets | Improved decision-making and market fit |
| Workforce | Inclusive cultures attract and retain top talent | Reduced turnover and higher productivity |
| Reputation | Authentic commitment to DEIB strengthens trust | Brand resilience in times of crisis |
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Diversity Sends a Powerful Message to Customers
A 2023 McKinsey & Company report found that companies with the most gender-diverse executive teams were 39% more likely to outperform on profitability, while those with high ethnic diversity had a 27% greater chance of achieving above-average profitability. A company’s commitment to DEIB isn’t just an internal initiative—it directly affects how customers perceive and engage with a brand. Consumers today expect businesses to authentically represent the diverse communities they serve, making DEIB a critical factor in brand trust and customer loyalty.
Albert Kim, VP of talent at HR and employee background screening company Checkr, emphasized that DEIB is one of the few business strategies that carries both an ethical and financial imperative. "What’s so important to stress about DEIB is that it’s truly one of the few strategies carrying an ethical as well as an ROI imperative. That’s not just fluffy corporate speak—these things go hand in hand," Kim said.
DEIB Enhances Market Relevance and Innovation
Kim explained that companies looking to expand their market share must consider their DEIB investments carefully. Customers are more attuned than ever to whether brands are being genuine or merely performative in their diversity efforts.
"DEIB initiatives complement sales and marketing pushes," Kim said. "Organizations looking to increase market share have to consider their DEIB investment—it’s how they can more keenly and authentically connect with a wider, diverse customer base. But people are more adept than ever at noticing when brands are being performative, so when DEIB is done right, it really sticks."
DEIB also powers operational excellence and innovation—benefits that go far beyond brand perception, Kim added. Companies that build diversity into their core values encourage a broader range of ideas, workflow approaches and competing perspectives, all of which contribute to a stronger competitive advantage.
"DEIB is integral to creating a workplace that encourages a dynamic range of ideas, workflow approaches and constructively competing perspectives, all of which we know makes a measurable difference in innovation," Kim said.
Kim emphasized that performative DEIB efforts, however, can undermine credibility. Simply posting about heritage months or highlighting diversity statistics isn’t enough.
Instead, he urges businesses to focus on long-term, substantive initiatives that have real community impact.
"Think beyond ideas that center around quick spotlights or shout-outs, and instead toward initiatives that are long-term and not so transactional," Kim said. "We’re seeing a growing push around community involvement and nonprofit partnerships that amplify a lot of great DEIB work happening on the ground. These efforts prove commitment and impact more than just performatively patting your own company on the back."
By embedding DEIB into both business strategy and community engagement, companies can build stronger relationships with customers while ensuring their efforts are seen as authentic, not opportunistic.
Brands That Operationalize DEIB Build Trust—Those That Don’t Face Consequences
Authenticity vs. Performative DEIB: What Customers Notice
Today’s customers have unprecedented access to information—from social media and news articles to customer reviews and firsthand testimonials. As a result, brands that merely pose as diverse and inclusive will be quickly exposed, leading to consumer distrust, backlash, or even outright cancellation. On the other hand, companies that genuinely embed DEIB into their operations—not just in marketing, but in hiring, product development and corporate culture—will attract and retain customers who value authenticity and shared beliefs.
However, failing to maintain a consistent DEIB strategy can be just as damaging as failing to implement one in the first place. Target’s recent rollback of its DEI initiatives in response to political pressures has drawn sharp criticism from consumers, employees and civil rights groups. What was once a company known for inclusive marketing and adaptive product design is now facing boycotts, internal unrest, and financial losses.
The backlash offers a key lesson: DEIB must be more than a passing trend or PR move—it requires lasting commitment. Customers today are highly attuned to whether brands are being genuinely inclusive or merely performative, and companies that fail to stand by their commitments risk alienating their most loyal advocates.
Beyond customer engagement, DEIB also plays a vital role in business resilience. Companies that prioritize inclusivity in leadership, product design and workforce development encourage innovation, attract top talent, and build stronger relationships with their communities. Conversely, brands that backtrack on their commitments may face employee dissatisfaction, consumer distrust, and long-term reputational damage.
Ultimately, brands that integrate DEIB at every level create an emotional connection with their customers—one that builds trust, satisfaction, and long-term loyalty. Those that fail to do so risk more than just public criticism—they may find themselves losing market share, credibility, and consumer confidence.
The Business Case for Lasting DEIB Commitment
DEIB isn’t just about ethics—it’s fundamental to business performance. Companies that authentically integrate DEIB into leadership, hiring, marketing and product development see stronger innovation, financial performance and customer loyalty.
Conversely, brands that treat DEIB as a trend or backtrack on commitments risk backlash, lost trust and diminished competitiveness. As customer expectations evolve, businesses that make DEIB a core strategy will build stronger, more resilient brands that reflect and serve the world around them.
Core Questions About DEIB
Editor's note: Some questions on why diversity, equity, inclusion and belonging is important to customer experience and business.
DEIB helps businesses better understand and serve diverse customers, leading to more personalized interactions, innovative products and stronger customer loyalty. Inclusive brands build trust by authentically reflecting different backgrounds and perspectives, ensuring their offerings and messaging resonate with a broader audience.
DEIB drives innovation, improves financial performance and strengthens brand loyalty. Diverse teams make better decisions, attract top talent and enhance customer engagement. Companies that prioritize DEIB gain a competitive edge, while those that neglect it risk backlash, employee dissatisfaction and loss of market relevance.
Editor's note: This article, originally published Feb. 9, 2023, was updated with new information and data July 14, 2025.
