Ways Black Businesses Can Boost Revenue and Gain New Customers With Diversity Marketing
Diversity has been a sizzling topic in recent months amid protests opposing police brutality and racial inequities, grabbing the attention of individuals and entrepreneurs across America. Interestingly, a fresh report reveals how small business owners can use diversity marketing as a tool to boost revenue, pick up new customers, and grow their enterprises.
Companies benefit from prioritizing diversity and inclusion in their marketing strategies, new survey data shows. Consumers are more likely to spend money and buy from brands when seeing themselves and their values reflected in advertising campaigns.
That is more true now given the ongoing effects of COVID-19 and the Black Lives Matter movement. U.S. firms are under pressure to use their power to address social issues, including boosting more minority representation in the workplace. In turn, brand authenticity is a necessity for successful businesses.
Clutch surveyed 500 Americans to examine deeper the growing trend toward diversity and answer an important question for many of today’s brands: What are the benefits of investing in diverse, inclusive, and socially conscious marketing strategies? Some 17% of those surveyed were non-white, including Blacks.
Clutch Editorial Manager Shelby Jordan’s survey for Top Design Firms disclosed that 64% of consumers are at least somewhat likely to make an immediate purchase after seeing an ad they consider diverse. Plus, 67% of consumers are at least somewhat likely to make a repeat buy from a brand they feel is committed to diversity and inclusion. Top Design Firms is a new sister site of Clutch, a ratings and review firm.
Jordon told Black Enterprise that if small business owners diversify their advertisements and branding strategies, they are able to relate to a wider audience. “If you show your customers how people that look and act like them can benefit from your product or service, they will feel more connected to your brand and be more likely to make a purchase.”
For Black business owners specifically, Jordan claims they have a lot to gain from diverse marketing strategies. First, the survey data reveals that white consumers are more likely to agree with their representation in social media or TV ads than non-white consumers.
“There is a gap in representation that Black-owned businesses are in a great position to fill,” she says. By prioritizing diverse and inclusive advertising strategies, Black business owners can establish relationships with non-white consumers looking for more accurate and frequent representation by brands.”
Other key survey findings:
- Less than half of consumers agree with how their race is represented in social media advertisements and marketing campaigns. Only 43% believe their race is represented frequently and 34% believe the representation is accurate.
- Some 51% of white-identifying consumers believe that they are frequently represented in ad campaigns, versus 35% of non-white consumers. Just 29% of non-white consumers believe their race is accurately represented, the number rises to 40% for white consumers.
- If two brands offer the exact same product, one in three consumers (34%) would consider each brand’s commitment to diversity and inclusion when making their final purchasing decision.
- The likelihood of an immediate purchase following a diverse ad is consistent with both white and non-white consumers; however, 73% of people ages of 18–34 are at least somewhat likely to make an instant purchase, compared to 65% of people ages 35–54, and 61% of people over age 55.
Another perk diversity marketing can bring small businesses is higher revenue.
Brands with the highest level of diverse representation in their ads saw an average stock gain of 44% across seven quarters, 2019 data from Marketing Dive shows. Further, the most diverse brands were preferred by 83% of consumers. The likelihood of purchase is nearly equal for both white (70%) and non-white (71%) consumers, exemplifying the value of diversifying your campaigns.
But there is a slight difference in how likely people are to buy from one age group to the next. Some 73% of people ages 18–34 are at least somewhat likely to make an immediate purchase, while 65% of people ages 35–54 are at least somewhat likely to make an immediate purchase. Sixty-one percent of people over age 55 are at least somewhat likely to make an immediate purchase.
The survey also explains why brand authenticity is important, how diversity marketing helps builds trust and brand loyalty as well helps firms expand into new markets.