How Diverse Businesses Can Grow Their Customer Bases
Becoming a more diverse company helps organizations improve in a myriad of ways. Not only can diverse businesses have more equitable workplaces with broader talent pools, but they also can leverage diverse perspectives to spark innovation. For example, companies that report above-average diversity of their management teams also report more revenue coming from products and services launched within the last three years than those with below-average diversity, according to a Boston Consulting Group (BCG) study.
In addition to diversifying management teams, companies can also diversify in other areas such as with the suppliers they purchase from. As organizations become more diverse both internally and among external stakeholders like vendors, they can grow their customer bases in the following ways:
Offer new products and services
Diversity can help reduce groupthink, which can help organizations continually evolve and offer new products and services, as evidenced by the above-referenced BCG study. And in addition to coming up with new ideas, companies can also leverage a diverse supply chain to offer new products and services to their customers.
For example, retailers can work with minority-owned businesses to start offering locally distributed products with unique cultural backgrounds. These products may not necessarily appeal to all customers right away, but they can help bring in customers from different cultures.
Companies like Walmart highlight this diversity to draw in more customers, such as by offering a way to shop online for products from diverse suppliers.
Improve brand reputation
Building a more diverse business, including by improving hiring practices to be more inclusive, as well as by working with diverse suppliers, can help improve a company’s reputation among customers. If businesses want to appeal to a broader customer base, that likely means they will have diverse customers, and it can help to be known as a company that accurately reflects the diversity of those they serve.
For example, an Adobe study found that over half of women think gender is portrayed stereotypically in advertising. If companies are not genuinely diverse and do not include perspectives from women, it can be difficult to effectively advertise, which can hurt a brand’s reputation. In contrast, a diverse company can often more effectively advertise to different groups to build a positive reputation and ultimately acquire new customers.
Companies can make their diversity efforts known, such as through social media and advertising, to improve their brand reputation among customers, as well as among employees to boost employee experience. Businesses with top-performing supplier diversity programs promote their initiatives both internally and externally, according to research from The Hackett Group.
Attract better talent
When companies make diversity a priority and start to build a more inclusive company, it can become easier to build on that success and find better talent that ultimately helps companies grow. That’s because employees today increasingly want to work for socially responsible, equitable companies.
For example, 78% of employees say a workplace with equality is important to them, but most workers say their companies could do more to promote gender equality and diversity, according to a Randstad US study. Missing the mark in this regard can cause companies to lose quality employees, as 80% of women would move to a new company that has better gender equality.
As such, companies that lack diversity can miss out on quality talent that can help grow sales, such as if great saleswomen choose to go to a competitor with more gender equality. The more that companies can bring in top-quality talent, the better chance they generally have to grow sales.
Look for ways to increase diversity
As these examples show, becoming a more diverse company can help attract new customers and grow sales with existing ones, so businesses shouldn’t hesitate to look for ways they can become diverse.
Increasing diversity among employees can take time, as that depends on factors such as your available positions and your recruitment efforts to attract a more diverse talent pool. But one quick win is to increase supplier diversity by working with partners like GoProcure (a diverse business itself). When purchasing through an e-procurement platform like GoProcure, businesses can choose products and services from a diverse range of vendors, including women-owned, minority-owned and veteran-owned businesses.
To learn more about how your business can build more diverse procurement practices, schedule a demo with GoProcure today.