In March, our own Shaina Shiwarski wrote about the underrepresentation of women in enterprise tech, but the problem of diversity in enterprise sales company sales extends far beyond just one industry. According to the last U.S. census, sales was the fourth-least-diverse profession in the country. In fact, 78 percent of salespeople in the U.S. are white.
This fact runs counter to evidence that shows that an enterprise sales company with more diverse staff—particularly along ethnic and gender lines—outperforms competitors that are more homogenous. In any enterprise sales company, diversity isn’t just good optics, in other words; it’s a strength that can give your company a leading edge over the competition.
1. Diverse enterprise sales company teams perform better
McKinsey’s 2018 update to its Why Diversity Matters report notes that the best companies for gender diversity were 21 percent more likely to enjoy above-average profitability, while the most ethnically and culturally diverse companies had a 33 percent likelihood of outperforming competitors.
These findings have been supported by a wealth of research. And as one report by Harvard Business Review makes clear, hiring and collaborating within homogeneous teams might feel easier, but it doesn’t actually yield better results. In fact, the opposite is true. Why? “Working on diverse teams produces better outcomes precisely because it’s harder,” the publication argued.
In the simplest terms, diverse ideas and perspectives drive innovation. Sameness, on the other hand, results in staleness.
2. Minorities and women have growing buying power
The middle class is becoming more diverse: That is to say, there is more diverse group of people with disposable income to pour into the economy. Taken together, black, Asian, and Native American populations in the U.S. had combined buying power of $2.4 trillion last year, according to one University of Georgia study. That figure is 156 percent higher than it was in 2000. According to same report, Latinos in the U.S. represented $1.5 trillion in spending power in 2017.
If these numbers are surprising, consider the fact that U.S. women of all races collectively account for an estimated $5 to $15 trillion in spending power, depending on who you ask. And gains in buying power go hand-in-hand with higher customer expectations.
While this may be more relevant for B2C than B2B sales teams, businesses of all stripes should be both thoughtful and careful when attempting to market to diverse communities. There’s nothing worse than tone-deaf marketing, which leads us to our next point…
3. A diverse clientele demands diverse staff
A more diverse pool of customers creates the need not only for a greater array of products, but also for salespeople who are culturally attuned to deliver relevant, personalized information about those products. Indeed, Harvard Business Review research found that “a team with a member who shares a client’s ethnicity is 152 percent likelier than another team to understand that client.”
While there’s not a lot of empirical evidence to suggest members of an ethnic or cultural minority would trust the advice of a salesperson who shares their minority status, it’s clear that more diverse teams can help craft more relevant—and lucrative—experiences for a wider contingent of customers.
And it’s not just ethnic diversity that matters. While just two percent of tech CEOs are women, there are many, many female buyers within technology and marketing functions—like Ginnie Roeglin, formerly Costco’s SVP of e-Commerce. Having a sales team that can do more than bump fists with tech bros will help win them over, as well.
4. Other kinds of diversity matter, too
Gender and racial diversity may be the most talked about, but there are other kinds of diversity that can enhance sales teams, too. One is “inherent diversity,” which refers to the traits a person is born with, like gender, ethnicity, and sexual orientation. “Acquired diversity” is another—it’s about your range of experience: growing up, putting yourself through school, working in a different country, volunteering, and so on.
There are an untold number of perspectives a heterogeneous mixture of people can bring to your organization—if you create inclusive spaces for these workers to collaborate, innovate, and contribute their ideas.
5. Diversity is important, but inclusion is crucial
The words “diversity” and “inclusion” often get conflated, but they actually mean two different things. Diversity isn’t merely about hiring people who aren’t white men to help “mix up” the workplace. These efforts, even if well-intentioned, can reek of tokenism if those diverse hires aren’t effectively brought into the fold.
Inclusion is about ensuring employees are treated equally and are free from discrimination at all levels of the enterprise sales company so that they can do their best work. And that, as McKinsey’s 2018 Delivering Through Diversity report argues, is hard but necessary work: “While progress on representation can be brought about relatively rapidly with the right set of initiatives, embedding inclusion sustainably within the organization can take many years, often requiring action outside the organization.”
The good news is that companies that undergo this process of intensive self-reflection and policymaking usually emerge stronger than their competitors—and more profitable.
Executive Insights for an Enterprise Sales Company
If your enterprise sales company sales team is entirely white, entirely male, or entirely any one thing, you’re missing out on key opportunities to improve performance and foster innovation. When it comes to the bottom line, countless studies have shown that diverse enterprise sales company teams outperform more homogenous ones, after all. That’s because diverse perspectives and experiences add value in a variety of ways, from messaging to ideation and beyond. If your team is a study in sameness, you’re leaving money on the table—it really is that simple.