Diversity and the Bottom Line.

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A Real Story of How Diversity Affects Business

Some years ago, I was listening to a client who made class rings lament their declining sales.

“We’ve listened to our customers and broadened our line. We’re offering more price points than ever before and created more personalized rings to meet student’s changing tastes. Yet, sales continue to decline,” he told me with an exasperated sigh.

“Have you looked at your sales force lately?” I asked. “I mean looked at them through the eyes of your prospective customers, the students in those high schools.”

When he asked what I meant, I told him every one of their sales reps I had met were white men. Most  were between 40 and 60. They were dressed in very nice suits, lived in upscale suburb neighborhoods and were very comfortable displaying their rings in suburban schools.

At the time, reps held ring days in the schools to promote sales and let students get a good look at their products. In their suburban schools, the reps were very comfortable opening their cases and letting the students really examine the rings. The students would eagerly try them on and smile watching the gem brilliantly reflect light. The rep would bring one or two of their support staff and often their spouse to a suburban school ring day. More personnel meant quick, attentive service and a satisfying experience for the prospective ring owners.

But, ring day in an urban or more ethnically-diverse school was a very different experience for the students. Reps were reluctant to open their display cases. Students struggled to see the rings through thick plexiglass covers. When they did take a ring out to show a student, the rep almost never let go of it.  Reps tended to take fewer staff to these schools often conducting the ring day alone. With less people to show the rings, fewer students received personalized attention and there was little time spent answering student’s questions.

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My client looked shocked and told me they had been watching a five-year trend of fewer suburban school students purchasing rings.  They were also seeing lower average unit prices from those who did buy. Their analysis had determined this was because of the relatively high percentage of college-bound students.  The students and their parents, who contributed to the purchase, knew a high school graduation ring would almost never be worn once the student left for college.

Urban school students, on the other hand, were opting to purchase much higher quality rings with a higher average unit price than their suburban counterparts. But the overall percentage of students buying in the urban schools was much lower. Originally, they thought the lower purchases in urban schools related to lower graduation rates, but the numbers didn’t bear that out. They should have been seeing much higher penetration in the urban schools.  Additionally, these student’s parents were more willing to fund a higher quality ring to recognize their high school accomplishments as many might not be college-bound immediately after graduating.

“We hadn’t thought about how the purchase experience would affect sales,” he said. “Our reps aren’t spending enough time to cultivate their best prospects.”

“No,” I said, “that’s the symptom of your real problem. You have a rep diversity problem. Your reps should reflect the population they serve.  That means you need a big push to recruit African-American and Hispanic reps.”

Over time my client did diversify their sales force and drastically improve their sales performance.  It wasn’t easy though.  They had to radically re-think their recruiting methods, restructure their territories and change some of their compensation models.  But along the way they discovered the real benefits of diversity.  By better reflecting the society and customers they serve, their reps had a much deeper understanding of the wants and needs of their customers and could more readily drive increased sales.

America is becoming more and more diverse.  By 2050, the US workforce will be a plurality meaning no single race or ethnicity will be make up a majority of the population.  Are you ready for the changing face of America?  Check out this InfoGraphic – The Changing Face of the American Workforce for a glimpse of diversity in the future.

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