There is a shift away from diversity as a compliance and talent management initiative, towards using it to help design experiences for marginalised customers to win in new markets, become more innovative and accelerate customer centricity, according to a new report.
“Leading organisations are devoting significant resources to truly understanding the needs of diverse customers and translating their findings into insights that anyone in the organisation can act on to improve the customer experience,” said Tom Champion, a senior analyst with Forrester.
“Globally more and more organisations are extending beyond compliance and talent management as the focus for diversity initiatives and thinking about customer diversity and the link to innovation.
“This is happening in commercial organisations as well as in government. It’s happening worldwide, with many leading examples coming out of Australia,” said Champion, who authored the recent Forrester report, Embrace customer diversity and inclusion for business growth.
The report observed that some organisations are playing a defensive diversity game, just doing the bare minimum necessary to get regulators off their backs or demonstrate action in the face of media scrutiny.
While it’s important for firms to be compliant and sensibly address public pressure for improved diversity, the report said they can benefit far more by acting strategically instead of reactively and considering the clear business and customer benefits of embracing diversity.
“Today, some organisations are accused of almost discriminating against some of their customers in the way they exclude them, but in all cases organisations have latent opportunities for business growth, by better engaging with their underserviced customers to improve enrichment, loyalty and to drive a distinctive customer experience in a competitive marketplace,” said Champion.
“This is part of a broader theme of the age of the customer. Customers – all customers – expect consistent and high-value experiences.
“They will go somewhere else if you can’t provide it.”
“More and more organisations are extending beyond compliance and talent management as the focus for diversity initiatives and thinking about customer diversity and the link to innovation”
There are a number of implications in this shift for HR executives, and Champion said it is important to be clear on what customer diversity and inclusion is and what it can mean to your organisation.
“The leaders in this space are clear that customer inclusion is not about PR or a one-off campaign; it’s about finding ways to change course and have deeper impacts on your customers,” said Champion, who added that they also “looped more brains into the diversity conversation.
“They raised the profile of diversity with their customer-centric teams – so with their design teams, digital teams, marketing and research teams – to find out how to deepen understanding of their diverse customers.”
The report observed that, in a time of competing priorities, it can be challenging for customer experience professionals to start to shift to the more mature components of customer diversity and inclusion.
Beyond addressing social responsibility, the reported noted that commercial firms can win customer engagement, enrichment and advocacy.
“Leading organisations will embrace diversity as a way to win ‘the next billion customers’ – those who are in untapped geographies or have been traditionally underserved,” the report said.
“This is making organisations reset their thinking and revisit the customer experiences they deliver.”
Government agencies can also benefit with superior outcomes, according to the report, which said that in a government and not-for-profit context, customer experience is becoming a priority as a critical driver of sustainable engagement.
“In the interest of serving all citizens and producing quality outcomes, agencies will drive better outcomes by diving deeper into the needs of society’s most excluded – whom they are obliged to serve.”
“Leading organisations will embrace diversity as a way to win ‘the next billion customers’ – those who are in untapped geographies or have been traditionally underserved”
Leaders should also prioritise systemic changes, instead of one-off initiatives, said the report.
“While events and campaigns to improve inclusion are helpful, the most successful projects are part of broader initiatives to embed new ways of working and shift mindsets,” it said.
“They will be guided by a belief that higher-quality customer experience for underserved customers leads to a competitive edge in a disrupted world where customers – all customers – have never been more empowered.”
Various functions need to see the diverse customer, and Champion observed that gaining and sharing a deep customer understanding was a common theme among the leading practice examples in the report.
“As a reflex we default to a homogenous view of our non-mainstream customers – for example, many organisations address customers with disabilities as one uniform group on their websites,” he said.
“To have this kind of collective view must make the problem overwhelming.”
Other companies, such as Barclays Bank, for example, have conducted ethnographic research to get specific about the pain points of their customers with accessibility needs and chunking up their needs into packages which the rest of the organisation can embrace.
In their case, Champion said they circulated a comic book of ‘diversity personas’.
“The idea is to bring the voice of the diverse customer into the organisation as a form of creative fuel – so when teams are making decisions, they have more perspectives at their disposal,” he said.
“Addressing emotional needs in customer experiences is proven by our research to be one of the most powerful drivers of customer loyalty. It’s also very inclusive.
“When you look at your customers through the lens of emotional needs – as opposed to age or gender – you can design more impactful customer experiences for more customers.”
“The idea is to bring the voice of the diverse customer into the organisation as a form of creative fuel – so when teams are making decisions, they have more perspectives at their disposal”
Another example of diversity and improved customer experience can be round in L’Oreal’s True Match foundation range, said Champion.
Existing foundations met the skin tones of around 39 per cent of UK women, but L’Oreal’s range boosts it to 98 per cent of women (as well as men).
“This has increased their market size by 19 million women – plus an unknown number of men,” he said.
Another example is Tesco supermarkets, which is piloting a “relaxed lane” at the checkout.
“This is to take the pressure off customers with dementia, but it’s open to anyone who doesn’t want to feel rushed,” he said.
“In an industry with so much choice as retail, this is a differentiator.”
Government examples are also compelling, and Champion said that these can produce better citizen outcomes.
For example, The Domestic Violence Resource Centre Victoria launched an app to help those experiencing domestic abuse.
The app helps victims document evidence (like videos and journal entries) about their situation which can be used in a court of law.
“They’ve considering the sensitive context of this user in the design of the app – they make it look discrete, and in the functionality, evidence is saved off-device and cannot be deleted or modified,” he said.
“The goal is to improve court outcomes and save lives.”
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