Actualizing Your Marketing Supplier Diversity Program
Businesses are increasingly recognizing a greater need for supplier diversity, not only because it's an ethical approach to procurement, but also because there are several business benefits to the practice. Organizations with a diverse supplier base can access a wider range of products and services than those that don't. They tend to be more innovative and resilient and can significantly save on costs.
Supplier diversity is a proactive approach to procurement in which the organization encourages the sourcing of goods and services from minority-owned, women-owned, veteran-owned, LGBT-owned, historically underutilized businesses, and SBA-defined small business vendors.
Supplier diversity is just as important in marketing procurement as it is in the procurement of goods. However, some organizations struggle to identify and partner with diverse marketing service providers.
A lack of a working definition of what constitutes a "diverse" supplier is sometimes an issue, but so are issues that run directly against diversity programs. Issues like unconscious bias, complacency with the status quo, and a lack of resources can make marketing supplier diversity difficult to realize.
Here are a few steps organizations can take to actualize their marketing supplier diversity programs.
Develop the Culture Internally
Often, supplier diversity initiatives can't take off until the company addresses its diversity, equity, and inclusion (DEI) challenges internally.
Building a diverse company culture requires the organization to act on a multi-pronged strategy that targets things like unconscious bias in the workplace. Many organizations rely on diversity training to help in this area—but training alone doesn't constitute a viable DEI program.
The DEI program must also address internal hiring practices, promotion and reward practices, mentorship programs, and more. It must work to tackle structural bias inherent in the organization's internal processes, such as its benefits, salary, and leave policies.
DEI is a complicated and ongoing process that requires fine-tuning and support from upper management. But most organizations should at least be addressing DEI at the company before they start their marketing supplier diversity initiative.
Establish a Business Case
Once the right culture has been built internally, supplier diversity programs will require buy-in from key stakeholders. The directive can't be assigned to a single individual to carry out with few resources. Often, it requires a resource investment or the onboarding of new processes and technologies, and it requires interest from the highest levels of the organization.
According to Deloitte, "As markets and customer preferences shift, boards and executives benefit from recognizing that prioritizing the inclusion of diverse customers and stakeholders is key to staying competitive in the marketplace."
Establishing a business case starts with recognizing the benefits of marketing supplier diversity and presenting them to stakeholders in a way that is both compelling and evidence-based. Elements like minimized risk in the supply chain, better collaboration between the organization and its marketing partners, cost savings, and community impact are all compelling reasons to consider investing in a marketing supplier diversity program.
Define and Identify Diverse Marketing Suppliers
The organization also needs a working definition of what constitutes a diverse marketing supplier if it is to pursue any objectives related to supplier diversity. Most companies rely on a definition like the one presented above: Diverse suppliers are typically minority-owned, women-owned, veteran-owned, LGBT-owned, historically underutilized businesses, and SBA-defined small business vendors.
The organization can also research successful supplier diversity initiatives at other companies, or even collaborate with partners to develop a far-reaching supplier diversity effort. The objective should be to obtain actionable information about what tools and processes need to exist for the effort to succeed.
Technology also plays a significant role in marketing supplier diversity. Database tools can help the organization identify marketing vendors that meet its diversity requirements. Instead of relying on vendors that are already recognized by the organization, this type of technology could open a world of new opportunities for finding vendors.
Create Goals and Best Practices
Finally, the organization must establish a set of goals and best practices, as well to measure the results of these efforts.
Many organizations rely on a supplier diversity statement as a guiding document. For example, multinational pharmaceutical company Merck & Co.'s supplier diversity statement says, "We recognize that supplier diversity creates a competitive advantage for our company and positively impacts the global community. We believe that the success of the company and society depends on enabling diverse businesses to share and grow in the global market."
If possible, goals should be specific. For example, a statement like "We will source 25% of our marketing services from diverse suppliers" is a workable goal. Best practices like supplier collaboration, generating an internal database of diverse marketing suppliers, and incorporating DEI training into supplier sourcing programs can also help.
Marketing supplier diversity is set to be a hot topic at this year's ProcureCon Marketing conference, taking place this December 6th to 8th at the Hyatt Regency La Jolla in San Diego, CA.
Be sure to download the agenda for more top insights and challenges facing the industry today.