When businesses look to improve their diversity and inclusion efforts, they typically focus on the recruitment process. But another area worth exploring is suppliers. With August being National Black Business Month, now is a good time for businesses to reflect on their achievements in DEI as well as where to best focus their money and efforts to improve. Marketers should take this opportunity to consider their relationship with suppliers as well.
Taking DEI Efforts Beyond Messaging
National Black Business Month is sometimes mistaken to be entirely about the ethnicity of ownership. It is more than that. It’s a reminder of the economic impact black-owned businesses bring to their local community. According to Black Enterprise, historian John William Templeton and engineer Frederik E. Jordan Sr. established the celebration to highlight how local policies and agendas can better support the economics impacting 2.6 million Black-owned businesses in the United States.
Through events like National Black Business Month, marketers have an opportunity to demonstrate their brand does more than create consumer-friendly messaging in support of DEI. The actions a brand takes in terms of investments and results is what counts — for the business but also for their audience, as levels of DEI investment are now a part of the consumer decision to purchase from a brand.
The result demonstrates a brand’s commitment to its values. I noted in my post on diversity and inclusion how advertising to Black consumers has evolved in today’s digital environment. Satisfying consumer interest in how brands invest beyond messaging is part of that trajectory.
Big Businesses Committing to Invest in Advertising Supplier Diversity
An increase in corporate DEI investment in advertising suppliers is emerging. McDonald’s announced it would double its advertising allocation to Black-owned media companies, production houses and content creators. The 2% to 5% increase will happen gradually between 2021 to 2024. This is part of an overall initiative to spend more with Black, Latinx, Asian Americans and Pacific Islanders, LGBTQ and women-owned platforms. General Motors (GM) also announced a target to increase its purchases from Black-owned media by 8% by 2025.
These companies are responding to high interest in improving budget allocations to advertiser suppliers. According to a supplier diversity study from the Association of National Advertisers (ANA), 89% of marketers place a premium on supplier diversity.
Examining supplier relationships can reveal savvy branding opportunities. It allows a brand to look at how to better deliver its diversity message without solely relying on products and services to demonstrate brand commitment. GM’s investment in advertising spend comes as the number of Black-owned dealerships have declined, according to the National Black Chamber of Commerce. I remember from my days as an automotive engineer that GM, along with other automakers, long prided themselves for their relationships with Black-owned dealerships. GM’s new direction with advertising suppliers brings entrepreneurial Black-owned media ventures into GM’s valuable supplier ecosystem.
Creating a Framework to Address Inclusion Gaps
One of the challenges marketers reported in the ANA survey cited above was finding diverse suppliers. While online platforms have increased visibility into opportunities for underrepresented communities, the number and diversity of platforms in use create additional obstacles for marketers seeking new suppliers. Thankfully, the majority of respondents to the survey are “implementing strategic plans to address those gaps.” Other researchers are developing ideas that support collaboration with suppliers. Christine Moorman, professor at the Fuqua School of Business, Duke University and founder of The CMO Survey shared some terrific initiative ideas in this post. Marketers can use these ideas to establish a framework to address inclusion gaps.
Inclusion is an act. Marketers have an opportunity to act now to connect investments in suppliers to diversity measures that create value through inclusion.
Pierre DeBois is the founder of Zimana, a small business digital analytics consultancy. He reviews data from web analytics and social media dashboard solutions, then provides recommendations and web development action that improves marketing strategy and business profitability.