Independent global marketing consultancy R3 has released a report that identifies the benefits and challenges of marketing supplier diversity programs and how brands like Proctor & Gamble, Unilever, American Express, and General Motors are leading these initiatives to ensure inclusivity and marketing performance are incorporated into their partnership processes.
“Bringing diversity and inclusion into marketing procurement presents both opportunities and challenges,” says Greg Paull, Co-founder and Principal at R3. “In addition to adjusting contract requirements and KPIs, stakeholders will need to understand human issues and be bold in decision-making.”
More Sustainable and Inclusive Supply Chains
R3’s Improving Marketing Supplier Diversity Programs report also looks at how to track the diversity dollar, what applying diversity and inclusion to marketing procurement looks like and supplier diversity metrics.
Aside from the standard operating frameworks and processes used by company-wide supplier diversity programs, applying supplier diversity to marketing can include one or more of the following: Communicating supplier diversity goals and challenges with stakeholders across marketing and management, make diversity & Inclusion criteria a standard requirement in any RFP, implementing payment terms that are supportive to small and minority-owned businesses, among others.
“Marketing procurement teams often evaluate vendors based on pricing or value, which makes it difficult for diverse-owned companies to get into the mix. Having a shared understanding across stakeholders to the purpose and goals of having a marketing supplier diversity program will help accelerate progress, impact, and the overall success of the initiative,” says Paull.
Supplier Programs Lead to Better Performance
The top quartile of companies engaging diverse suppliers have a 10% higher rate or preapproved spending, 52% greater use of electronic purchase orders and 46% faster invoice approvals.
As marketing procurement teams incorporate supplier diversity into existing agency and vendor partnership processes, unique advantages and challenges have been noted. Working with diverse suppliers encourages companies to adopt more efficient procurement ways of working. But maintaining the supplier pool and measuring short- and long-term performance demands specialization, and an ability to apply demographic data in a meaningful way.
A copy of R3’s Improving Marketing Supplier Diversity Programs can be requested here.