IDC’s Monthly Best Practice: March 2012
Addressing marketplace diversity can yield the largest Return on Investment (ROI)
Last year IDC, in partnership with the Department of Economics and Quantitative Methods at Westminster Business School, carried out research to determine the Return on Investment (ROI) from diversity and inclusion (D&I) initiatives. We did this in conjunction with businesses of different sizes, global corporates through to micro businesses, and from different sectors. An outcome of the research was that marketplace diversity initiatives tended to offer higher ROIs than workplace ones. Given the significance of this finding I thought I would offer 5 best practices to enable readers to benefit from marketplace diversity strategies. These are:-
1. Ask questions like the following to provide background information to develop a marketplace diversity strategy:
- How has our organisation traditionally segmented its markets and customers and how should we change it to leverage marketplace diversity?
- What can we do to discover how changing demographics may affect our traditional market segments?
- How do we begin researching and learning about diverse segment customers?
- What are the economic consequences of not being able to compete for the products and services diverse customers want to buy?
- How do our products and services for diverse customers compare with competitors’ in terms of innovation, quality, desirability, and service delivery?
- Is our organisation gaining a share of its diverse markets and holding on to it? If so, why and at what cost?
2. Put effort into recruiting diverse employees so that you more closely reflect your customer base. Ask your diverse employees to help you identify problems that customers from their diversity segment might have. Their feedback will enable you to understand your diverse customers and enable you to better fulfil their needs.
- Continental Airlines, USA, credits its D&I management initiatives over the last five years with improving customer service levels, enhancing customer loyalty and building bottom line returns (Fitzerald, 2001). After struggling with poor profitability levels, Continental implemented new D&I recruitment and management policies, which contributed to a financial turnaround. It increased its employment of underrepresented minority ethnic groups and individuals who speak a language other than English. Through such measures it has created a workforce that more accurately reflects its customer base. According to Continental’s director of diversity and fair employment practices, Pat Bissonnet, “Having a very diverse workforce to meet an increasingly diverse global customer base has become an important advantage for us” (Fitzerald, 2001).
3. Tailor your website to appeal to diverse target markets:
- provide information resources relevant to them;
- use appropriate and relevant language and imagery;
- demonstrate how your products, or services, are relevant for each diverse target market.
4. Manage your brand to outperform competitors by influencing the associations that diverse customers form about your organisation’s products and services and their relevance to their needs and values.
5. Make your organisation known to diverse target markets:
- sponsor popular events, e.g. sports events, music festivals, which are attended by people from target diverse markets;
- sponsor segments of conferences and conventions held for your target diverse markets;
- place advertising on websites, newspapers, venues, etc, which are popular with diverse target markets;
- portray your internal diversity in advertising as this sends a powerful message;
- become a guest lecturer at local educational institutions, libraries, or community organisations, etc, whose attendees are from your target diverse markets;
- write articles for publications read by the target diverse markets you want to reach.
As ever, if you want to discuss how you might leverage marketplace diversity more powerfully please do not hesitate to contact us.
Dr Ian Dodds, 29 Feb 2012, email@example.com
· The principal and unrecognised cause of workplace exclusion - microinequities