Ethics & Ecology

How to Make Marketing Supplier Diversity Meaningful

Intersectionality

“One mistake that companies often make when they first start thinking about D&I is that they don’t think intersectionally. Each of your employees has layers—lots of different identities… but when you start to think beyond “meeting diversity metrics” and start to think about building balanced teams, those are potentially your strongest opportunities for impact” – Aubrey Blanche, Global Head of Diversity & Belonging at Atlassian

According to R3, the independent transformation consultancy, supplier diversity programs have become familiar components of overall business thanks to heightened awareness around the benefits and advantages of developing more sustainable and inclusive supply chains. 

In a recent ANA survey (2021), 69% of marketers said they had a supplier diversity program for marketing, which is up from 40% in 2020. However, 48% of these programs are 5 years old or younger. 

As marketing procurement teams incorporate supplier diversity into existing agency and vendor partnership processes, unique advantages and challenges have been seen. 

For instance, working with diverse suppliers encourages companies to adopt more efficient procurement ways of working. But maintaining the supplier pool and measuring short-and long-term performance demands specialization, and an ability to apply demographic data in a meaningful way. 

As such, R3’s report, which can be found here, is only part of a much wider conversation about inclusivity and marketing performance. In their view, there is more to be done to make supplier diversity programs more effective, efficient, and accountable in the industry. 

Successful programs require stakeholders to understand both business and human issues, and challenges marketing and procurement leaders to be bold in their leadership.

Better Performance and Application

Crucial to R3’s report is the idea that diversity can lead to success and they highlight a number of statistics that demonstrate this fact. For example, from the top quartile of companies engaging with diverse suppliers, there is a 74% average annual retention for diverse suppliers versus 61.7% for non-diverse suppliers. 

However, the report also provides practical guidance of how diversity suppliers can be implemented aside from the standard operating frameworks and processes used by company-wide supplier diversity programs. 

R3 makes the following recommendations when applying supplier diversity to marketing:

1. Help existing agency partners develop their own supplier diversity programs.
2. Understand the diversity policies of your agency partners.
3. Partner with minority-owned business organizations to grow your exposure to the capabilities and needs of potential partners.
4. Communicate supplier diversity goals and challenges with stakeholders across marketing and management.
5. Implement payment terms that are supportive to small and minority-owned businesses.
6. Make Diversity & Inclusion criteria a standard requirement in any RFP
7. Reward agency partners who help your brand meet its supplier diversity goals.
8. Create space in your agency ecosystem for minority-owned and multicultural businesses.
9. Demand regular reporting from your diverse suppliers. Make it a qualitative and quantitative exercise.
10. Give minority-owned agencies the opportunity to introduce themselves and their work.

Nonetheless, there can be some challenges in execution, including identification, aligning criteria and the true perception of value. 

On identification, R3 notes that there may be difficulty identifying qualified partners as most minority owned businesses do not have the resources to achieve awareness in the mind of potential clients. 

Additionally, procurement and other decision-making departments in the company have criteria that are not always aligned on how the company’s supplier diversity works; this can make true diversity difficult to achieve.

Thirdly, R3 acknowledges the mindset that working with diverse suppliers is a risk or that their services are viewed as a commodity with no true understanding of how working with minority-owned businesses will benefit the company. This is something they believe they can help clients address.

Supplier Diversity Metrics and Intersectionality

R3 outlines how marketing procurement teams need to deliver data to stakeholders to show the measured impact of their investment. To do this, they may use metrics including total diversity spend, number of suppliers mentored/developed, as well as a number of metrics listed in the report.

R3 goes on to address some of the common issues marketing procurement teams might experience with metrics being used in supplier diversity programs, including the impact on the community, separating people and sales, and financial return on investment.

Finally, R3 looks at how marketing can aim beyond diversity metrics and look to develop balanced teams. This means truly addressing intersectionality and understanding the textured nature of the subject matter.

As Aubrey Blanche, Global Head of Diversity & Belonging at Atlassian, one of R3’s clients says, “One mistake that companies often make when they first start thinking about D&I is that they don’t think intersectionally. Each of your employees has layers—lots of different identities… but when you start to think beyond “meeting diversity metrics” and start to think about building balanced teams, those are potentially your strongest opportunities for impact”

You can download the full report here 

About R3

R3 are hired by CMOs to make their marketing more measurable and accountable to business impact. R3 was established in 2002 in response to an increasing need from marketers to enhance their return on marketing, media and agency investments, and to improve efficiency and effectiveness.