The proactive role of the brand in DEI
Insight #13: Overlooking the brand's pivotal role in making DEI work costs companies a lot but, more than anything else, it puts at risk users' trust.
Brands are social systems designed to expand tangible and intangible value exchanges between companies and people. With the expansion of their presence, brand managers must always factor in the areas where value resides (i.e., tech innovation, socio-economic shifts, political and cultural disruptions) and determine the role the brand can play in proactively driving change. One of the most important tasks they must accomplish is to provide inclusive experiences that allow customers to relate to the brand and empower them to make meaningful choices.
Companies use narrative psychology and behavior economics to engage, communicate, and get insights into consumers' decision-making. Why? Because they want to create more relevant products and experiences and connect with customers on an emotional level. Doing so also impacts people's lives, their environment, and the future. It's no surprise that stakeholders now demand more responsibility, expecting companies to act and contribute to improving the living conditions in the world.
The task ahead for brand managers is to build brand presence responsibly. They need to up their efforts in understanding consumer identity and needs at a deeper level. In other words, they must work with diversity, equity, and inclusion differently.
Among various studies conducted recently, one insight stands out:
Brands constructed around a "memorable image" a buyer associates their purchase with are bound to lose customers and growth opportunities if they fail to show any transparency of their impact.
"73 % think brands must act now for the good of society and planet." (Meaningful Brands 2021)
"62% Of Gen Z believe that brands have an important part to play in the social conversation about issues like gender equality & race or immigrant relations." (Equitas Insight, 2023)
"59% of consumers tell us that it is important to them to buy from key that actively promote diversity and inclusion: in their businesses, in society, and in the marketplace." (Kantar Global Report, 2022)
Companies now find themselves on a challenging journey as they struggle to become sustainable, enable inclusivity, and stand for social justice while providing value and experience at an optimum cost.
Brand value is deeply interconnected with consumer identity.
The role of consumer identity can no longer be ignored or limited to user personas and "context-free" demographics. It requires leaders, brand managers, and marketers to integrate DEI practices into the brand's fabric so all stakeholders - employees, partners, and customers - are considered and valued.
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DEI initiatives improve work conditions, systemic justice, and inclusion of historically disadvantaged or discriminated groups. But they can only make a real and lasting difference when all parts of the company are realigned and committed to a shared purpose.
"For our 50th year, we're looking forward, not back, to life on Earth. Together, we can prioritize purpose over profit and protect this wondrous planet, our only home." Patagonia
So far, the role of DEI, despite its benefits, has been downplayed as a cultural issue. DEI is much more than that.
DEI is a brand matter.
By activating the brand's role in driving DEI in a company, companies are better positioned to make an impact. But, to bring DEI closer to the brand, DEI requires a systemic implementation into four key business areas to fully unlock its power:
Products and Services - when DEI values inform product design and development, companies create more relevant products and, thus, higher brand value.
Customer Service - DEI practices can improve the brand experience through the quality of engagement and more empathic interactions.
Brand Communications - when DEI policies are connected to all stakeholders and aligned regularly to actions, they turn the brand promise into a reality.
Community - DEI initiatives reaffirm companies' accountability and commitment to nurturing meaningful relationships, creating more brand trust with the community.
Diversity, Equity, and Inclusion offer a concrete possibility for organizations to bring to full development their people's capabilities and skills to create value for everyone involved (employees, customers, partners). And while the most important job of a business is value creation, how value is generated is becoming increasingly important and subject to scrutiny.
So, how can the company nurture tangible and intangible forms of value more effectively?
Business value is typically measured in financial terms. In contrast, brand value is measured in terms of brand equity - the added value that a strong brand provides to a product or service beyond its functional benefits. Business value and brand value should not be separated but always seen as interdependent components of a company's success. The experience, promise, and trust placed on the brand are not separate metrics but a mutually reinforcing cycle of generating value following stakeholder demand. Only by creating a holistic framework can companies access the value space unlocked by DEI. When DEI is not directly linked to the brand success metrics, the value exchange between the company and the customer may be unbalanced.
Growth- and performance-driven initiatives often include parameters of "customer loyalty" as a primary indicator of competitiveness and brand trust, but this approach comes with challenges:
Loyalty is nothing more than a preferred brand. More and more studies reveal a clear and honest reality of the shift in customer behavior. The experience and the benefits associated with a particular brand may keep customers longer in the loop, but only so long if the brand falls within the parameters set by the customer and doesn't fulfill their needs.
Loyalty may require "complacent obedience." Under ideal conditions, customers remain loyal to a brand when they admire and think highly of it. But when unprecedented instability and change, such conditions become removed from reality and are toxic as a customer retention strategy.
All in all, customer loyalty reduces their identity to a set of consumption patterns. In business, the most you can achieve through loyalty is conditioning customers to prefer your brand, not to believe in it.
Going beyond a mere preference requires brands to cultivate trust. They can do so only if they respect the identity of their stakeholders, build meaningful relationships, and commit to a shared value exchange. But that cannot be achieved unless organizations reconcile the tangible and the intangible sides of value as equally contributing factors.
So, where does it all lead, and how is DEI concretely serving all stakeholders to build more brand equity? There are three key takeaways:
1/ Use DEI to measure the pulse of your brand promise, experience, and trust.
Instead of focusing only on immediate pains and gains, the brand needs to drive outcomes that matter to its stakeholders for a lasting relationship:
"These outcomes are not just organizational inputs or even outputs, but stakeholder health, well-being, success, and discrimination rates, among many others, for stakeholders including employees, contractors, local communities, the environment, and more." (Deconstructed DEI, Lily Zheng )
To create the appropriate conditions for such outcomes, the brand can be a platform for evaluating impact to improve execution efforts. DEI is then an expression of the relevant conditions to deliver on the brand promise, create fulfilling experiences, and build trust.
2/ Focus on the identity through DEI.
A brand is an intersection of identities and a vehicle for different levels of transformation, but it has no relevance unless it appeals to the stakeholders it serves. Adopting an integrated view of DEI with all business areas and brand components can extract powerful insights into creating a shared value space for stakeholders.
Employees, customers, and partners are real blocks of identities that make a brand crystallize. When brand managers recognize them, their role becomes a bridge between the brand and the people or groups they contact to nurture an authentic identity that can stay strong even during disruption. Moreover, the role of brand managers becomes pivotal in distilling a real gauge of growth and success.
3/ Balance the value exchange.
True brand value is a give-and-receive trade, not just a matter of supply and demand.
By assessing the impact of a business at a global level, the brand becomes an expression of conscious decisions to change and do better. That, in turn, transforms the business internally by creating an outcome-led mindset.
Take the case of Patagonia. The Patagonia mission statement ("We're in business to save our home planet.") leads all aspects of the business, which often leads to compromises of purpose over profit.
The core of the business remains to make the best product, but what that means is constantly refined to match the quality of success, not the quantity. And with the 1% For the Planet program, Patagonia gives away one percent of the company's gross revenue annually.
By assessing the impact of the clothing industry, Patagonia continues to educate and influence consumption habits toward more sustainable choices. Worn Wear is a simple yet powerful choice to increase brand trust by increasing the quality of conscious consumption and the experience of its customers. Market size doesn't shrink because the customer base is diverse, and more and more customers start to appreciate "business done right."
To sum it up, DEI is more than a component of culture but a key promoter of brand equity. Brand-DEI can strengthen commitments and give marketers a powerful way to steer the brand's story and derive insights that inform the other business areas where consumer identity becomes the foundation for driving successful projects. The future is diverse, equitable, and inclusive. If that's not on the horizon, then we must work to make that a shared purpose and take concrete action that sources from an authentic will to do the better thing.
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A strong brand builds employee, partner, and customer loyalty by continuously delivering moments of truth.
At Owtcome, we seek to empower businesses through the power of outcome-led design, so they can build stronger brands and execute on brand strategies with a 360 degree view on their stakeholders (employees, partners, customers). Get in touch with us if you want to find out more at firstname.lastname@example.org or connect with Daiana and Krasi on LinkedIn!