The business case for diversity is tried, tested, and proven. Not only is it the right thing to do from a human kindness perspective, but it makes good business sense. Yet, some companies and organizations, including agencies and brands, are lagging behind. Let’s explore why this is and look at the real purpose behind committing to diversity, equity, and inclusion (DEI). Then, let’s review the benefits brands reap when they dedicate their efforts to it and how your company or clients can follow suit.
This post is part of a 7-part series on diversity, equity, and inclusion in Influencer Marketing. Check out the other articles to learn DEI Definitions and The Difference Between DEI and Inclusive and Multicultural Marketing. Additionally, get tips on How to Create Inclusive and Multicultural Marketing Campaigns and How to Ensure Your Diversity Influencer Marketing Campaigns Will Meet the Mark. Finally, discover 7 Mistakes to Avoid in Diversity Influencer Marketing. Last but not least, check out Brands Getting Diversity in Influencer Marketing Right. Want to get the goods all in one place? Download our eBook on Everything You Need to Know About Diversity in Influencer Marketing.
The Business Case for Diversity
Knowing what DEI means, how it differs from Inclusive and Multicultural Marketing, and basic questions to ask in the campaign planning phase are important first steps. However, without proving why diversity in Influencer Marketing is good for business, you likely won’t secure the budget to move your plans forward.
The Real Purpose for Diversity
Before sharing the stats, let’s be clear. Diversity is always the right choice. Period. Full stop. End of sentence. Why? Because it’s good for humankind. Because being around people who look, think, behave, eat, drink, have traditions different than you benefits society and teams. Additionally, it leads to the following positive results:
Diversity enhances creativity. It encourages the search for novel information and perspectives, leading to better decision-making and problem-solving. Diversity can improve the bottom line of companies and lead to unfettered discoveries and breakthrough innovations.
DEI, Inclusive Marketing, and Multicultural Marketing are all buzzwords in business. Anytime a financial case can be made for adopting a business practice, companies see dollar signs and jump on the bandwagon. But, let’s not forget that being diverse, equitable, and inclusive is the right choice. Lily Zheng encourages us in her Medium article entitled: “The Business Case for Diversity Is a Sinking Ship”:
Good D&I strategies don’t just generate more revenue, but also result in better reputation, higher community trust, and increased sustainability and longevity.
Why Diversity Is Good for Business
The good news is that commitment to diversity is not only the right thing to do but also it positively impacts a business’s bottom line. In her post entitled Why Diversity Marketing Is Good Business, Kiely Kuligowski quotes market research and strategy consultant Matt Seltzer, saying:
In the long term, diversity marketing is important because it forces marketers to communicate in the language of their customers,” said Seltzer.
Diversity marketing is accepting the reality that consumer bases are no longer as homogenous as they once seemed. As more consumers look for brands that resonate with them, brands that are slow to adapt their marketing to this reality can seem out of touch and dated.
Statistics Showing Why Diversity in Business Is the Right Choice
Because most companies and organizations depend on sales, analyzing your brand’s data and letting the numbers do the talking is your best bet in convincing your agency, brand, or clients to make the decision to get it right when it comes to diversity in Influencer Marketing. Here are some helpful statistics to make your case:
- The U.S. Census predicts that more than half of Americans will belong to minority groups by 2044.
- In 2019, Adobe conducted a research report of more than 2,000 consumers and discovered that 61 percent of Americans find diversity in advertising important, and 38 percent of consumers are more likely to trust brands that do well with showing diversity in their ads.
- Multicultural advertising and marketing spending is on pace to rise 4.5 percent in 2019 to slightly more than $27 billion and is projected to increase 6.3 percent in 2020 to $28.7 billion.
- In a white paper by Microsoft, the results showed that 59 percent of consumers are more trusting of brands they are represented in their ads.
- The LGBTQ+ [community] had a buying power of nearly $1 trillion (Bloomberg, “LGBT Purchasing Power Near $1 Trillion, Rivals Other Minorities,” 2016).
- Asian and Hispanic households on average will out-spend white non-Hispanic households by more than $800,000 and $300,000, respectively, during the remainder of their lifetimes. [Source]
- The Heat Test Report shares that 69 percent of brands with representative ads saw an average stock gain of 44 percent in a seven-quarter period.
- A 2019 consumer survey by Google and The Female Quotient revealed that 64 percent of all respondents took some action after seeing an ad they considered to be diverse or inclusive. [Source]
If you’re looking for additional stats to help make the business case for diversity, check out this post with 36 inclusive marketing statistics. Or, check out this Catalyst article on Why Diversity and Inclusion Matters.
How Diversity Benefits Brands
Brands that are committed to diversity benefit in three primary ways: 1) people, 2) profit, and 3) perspective.
People: How Diversity Helps Brands Retain and Recruit Top Talent
We are facing a talent shortage. This is not just because of the global pandemic. According to a 2017 McKinsey Global Institute study:
… employers in Europe and North America will require 16 million to 18 million more college-educated workers in 2020 than are going to be available. Companies may not be able to fill one in ten roles they need, much less fill them with top talent. Yet in advanced economies, up to 95 million workers could lack the skills required for employment. Developing economies will face a shortfall of 45 million workers with secondary-school educations and vocational training.
During the “war on talent,” brands that embrace DEI are retaining and recruiting top talent. According to ProService:
Having employees from different backgrounds creates an enriched, engaged company culture that’s good for business. Even so, there’s a large wage gap in the U.S.– with women making 20 percent less than their male counterparts. Additionally, racial wealth gaps continue to be a widespread problem.
While it’s difficult to pinpoint the exact sources of these disparities, it’s clear that diversity helps attract and retain employees at a company. In fact, according to a 2017 report by the National Institute for Public Relations, “Nearly half of American millennials say a diverse and inclusive workplace is an important factor in a job search.”
Profit: How DEI Helps Brands Reap Financial Benefits
In addition to the stats shared above, a Deloitte Insights article points out the financial benefits of brands that invest in DEI:
… high-growth brands (defined as those with annual revenue growth of 10% or more) are more frequently establishing key performance metrics for diversity, equity, and inclusion (DEI) objectives than their lower-growth competitors.
Brands that have robust systemic DEI practices and benefit financially from them have many things in common. Most importantly, they know that diversity flows top-down in their organization. Therefore, they follow through on their company diversity pledges and recruit diverse top talent, empowering them with DEI-related initiatives. Finally, they hold them accountable for their implementation. In this way, they ensure diversity is adopted company-wide.
Additionally, they show their commitment to diversity in their Inclusive Marketing or Multicultural Marketing. Specifically, they create campaigns based on messaging that represents and resonates with their target market. And, they show up in places online and offline their consumers frequent.
Perspective: How Diversity Helps Brands Drive Greater Innovation
People and profit are undeniably great for business so they get top billing. However, what brands often overlook is the positive impact diversity has on enhancing a team’s performance. When DEI works, a brand increases its scope in terms of diverse thoughts, ideas, and insight. Unique perspectives and hard conversations where all voices are welcome lead to better decision-making, product innovation, and inclusive campaigns.
What Happens If My Company or Client Decides Not to Invest in Diversity?
While most brands recognize the importance of investing in diversity, not all businesses have taken steps towards implementing it. So, what can you do to influence your clients or your company who may be lagging behind? Here are a few suggestions:
- Drive change from within by pointing out the business case for diversity. Specifically, share the possible downsides of not investing in it. Namely, they may not attract and retain top talent. They may lose out on the financial upsides. And, they may not get the myriad benefits that come from having diverse team perspectives—problem solving, decision making, innovation, and better ideas. Finally, share the potential negative effects of not doing the right thing, such as missing out on earning a better reputation, higher community trust, and increased sustainability and longevity.
- Showcase brands that are getting diversity right. Gather case studies, highlighting brands and campaigns who are reaping positive benefits for investing in diversity in marketing. Bring up the examples during brainstorming sessions and client pitches.
- Make the request for diversity. Following the steps in the section below, connect the dots for your client. Specifically, help them see how to take even just baby steps toward creating more diverse practices and campaigns.
How to Make the Business Case for Diversity
Making the business case for diversity requires taking the following steps:
- Know your target audience inside and out. This includes drilling down on the many details that make up a buyers’ persona.
- Gather statistics, data, and examples that prove how investing in diversity will drive desired results for your company or client.
- Share data-driven presentations. Specifically, call out how DEI and Inclusive and Multicultural Marketing initiatives will move potential consumers further through the marketing funnel. Most importantly, highlight how these efforts will impact the company’s bottom line.
- Make a specific request, including a solid budget, timeline, tasks, and next steps.
- Follow up and ask decision makers if they have additional questions.
Wrapping It All Up
The business case for diversity is simple. DEI, Inclusive Marketing, and Multicultural Marketing are the right choice because they reflect human kindness. However, companies will be most convinced to commit to and follow through on diversity initiatives when they see the potential ROI. For example, they’re likely to enjoy a better reputation, higher community trust, and increased sustainability and longevity. Most importantly to decision makers though? They’re likely to attract and retain top talent, yield financial returns, and see greater productivity and innovation.
Want to learn more about diversity in Influencer Marketing?
- Learn The Difference Between DEI and Inclusive and Multicultural Marketing.
- Familiarize yourself with DEI Definitions and how they relate to Influencer Marketing.
- Get tips on How to Create Inclusive and Multicultural Marketing Campaigns.
- Discover 7 Mistakes to Avoid in Diversity Influencer Marketing.
- Check out Brands Getting Diversity in Influencer Marketing Right.
- Download our eBook on Everything You Need to Know About Diversity in Influencer Marketing.