Most brands have long recognized that their customers include people with different cultural characteristics, religions, education, income levels, genders, sexual preferences and physical and mental limitations — and that's something to celebrate. As such, brands that embrace diversity, equity and inclusion (DEI) are better equipped to create positive multicultural interactions with their customers.
How do diversity and inclusion impact the customer experience? How are businesses improving their DEI practices to enhance the customer journey? What does DEI look like to these brands?
Diverse Leaders Impact Both Customers & Employees
While it’s important to hire employees that represent diverse faces, for any DEI initiative to be successful, leadership needs to be diverse as well.
Diversity in leadership equates to an enhanced ability to relate to employees, customers and leads. It isn’t just about hiring a CEO with a diverse background. Brands need to prioritize diversity in leadership positions across the board, regardless of whether the roles’ responsibilities directly relate to improving DEI.
Along with being more equipped to understand employees and customers, a diverse leadership can help brands avoid costly advertising and marketing mistakes that may cause customers to lose faith and trust in the brand.
According to Ganesh Shankar, CEO and co-founder of RFPIO, an RFP software solutions provider, brands that take solid DEI initiatives can create an environment where customers feel they have a voice beyond a broad marketing quota.
"However," he added, "the bread and butter of a company’s true diversity metrics exist within its leadership. Only when DEI exists within a company can it lead to more positive interactions with customers from all walks of life."
“According to McKinsey," said Shankar, "companies on average had the highest likelihood of outperformance on profitability, at almost 62%, likely reflecting their historically high levels of diversity on executive teams." A lack of executive-level diversity remains a problem, however.
Although there have been advances in the fight against racism and prejudice, a lot of work remains. According to a 2019 Center for Talent Innovation report, there are only four African American CEOs out of all Fortune 500 companies, and only 3.2% of senior-level managers are African American.
Business leaders must avoid the mistake of thinking about DEI as a campaign or project to be completed and considered done. DEI is an ongoing initiative.
"DEI looks like a 365-day-a-year investment into your business and its people," said Devin Schumacher, founder of SERP, a search engine optimization company. "Without them, there is no company to provide for your customers. Without your customers, there is no business. They go hand in hand and should be respected and valued equally. DEI is foundational to that."
DEI Initiatives Attract Customers Without Alienating Others
There are many different social and political hot-button issues at hand today, such as the June 24th Supreme Court ruling overturning Roe v. Wade. Brands must decide which side of the fence they stand on because their customers are eagerly listening and watching. But they must be careful not to alienate other customers.
According to a survey of 1,000 Americans released in July 2020 by Mitto, customers support companies that take a stand on values. In the case of Black Lives Matter, 73% of respondents indicated that a company's statements must not only be empathetic but also followed by measurable action. Unlike other social and political issues, a brand’s DEI efforts are unlikely to impact its customers negatively.
“The best brands use aspiration to attract customers to their tribe," said Justin Angle, Associate Professor of Marketing at the University of Montana. "This requires walking a fine line between welcomeness and exclusivity."
Angle said marketers should consider aspirational associations at the behavioral and psychological levels.
"What do the ideal customers think, feel and do?" he asked. "Thinking, feeling and doing can cut across race, gender, income, etc. 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."
DEI Support Is a Valid Indicator of a Brand’s Values
Amy Mosher, chief people officer at isolved, a human capital management solutions provider, told CMSWire that customers typically expect to have a transactional experience with the brands they support. However, they are willing to build relationships with brands that invest in social causes and care about the people they employ.
“Studies show that customers want to work with businesses that have a proven commitment to their DEI&B efforts," said Mosher. "Many customers prefer to do business with a company that aligns with their values and beliefs and with those of their customers.”
In fact, a recent study from Zappi revealed that 70% of respondents ages 18–34 said a brand’s public support of a key social issue has directly influenced them to shop with that brand for the first time within the past year. And 40% of respondents said a brand’s lack of public support of a key social issue directly influenced them to stop doing business with that brand.
Key issues for respondents included:
- Environmental impact & sustainability
- Racial equality
- Gun reform
- LGBTQ+ issues
- A woman’s right to choose
“Despite being a hot topic, 52% of employees still think their organization can improve its DEI&B efforts," said Mosher. "Having a diverse workforce allows employees to feel supported and thrive regardless of their background or title."
But there's no one-size-fits-all solution, she added. "In fact, it’s a lesson in quite the reverse. But finding common ground and fostering a culture of inclusion and respect makes a higher level of belonging and engagement possible. And engaged employees perform at a higher level enabling the business to succeed."
Related Article: Deepening Diversity, Equity and Inclusion in Marketing
Diversity Builds Human Connection Through Empathy
Empathy is about seeing another person’s situation from their perspective and sharing their emotions and distress — imagining oneself as that person in the same position.
For businesses, practicing empathy provides leaders with actionable insights they can use to enhance products, services and solutions — and, more importantly, to improve the lives of customers and employees.
Because people are more likely to be empathetic toward those similar to themselves, a brand’s employees must include representatives similar to the core customer base. And because most brands have a diverse target audience, that means having diverse employees that can fully understand and empathize with those customers.
A Diverse Team Better Understands Diverse Customers
A Harvard Business Review report indicated that when at least one team member has traits in common with the end-user, the entire team is more likely to understand that user. In fact, a team with one member who shares a client’s ethnicity is 152% more likely than another team to understand the client.
To be good at customer experience, brands must know their customers. To do so, they must pay attention to voice of the customer. For most brands, that customer base is diverse, with lots of different types of people, each of whom is on their own unique customer journey, with their own customer experience expectations.
The more diverse a brand’s workforce is, the better it will be at communicating with, having empathy for and understanding the customer.
"Our customers are a reflection of our employees and vice versa," said Schumacher. "As diverse as our team is here at SERP, our customer base is even moreso. Embracing DEI principles ripples out to our customers who can see themselves in our team."
Diversity and inclusion impact not only a brand’s employees but also its customer base. Diversity in leadership helps align a brand with the values of its customers, build a more diverse workforce and, in turn, enable customers to see themselves in the faces of the brand.