You can be on Entrepreneur’s cover!

Prioritize DEI and Crush Your ROI Goals — How Inclusive and Authentic Marketing Drive Business Growth There's one business hack that's winning, though it's often overlooked: Diversity, equity and inclusion is good for business — and just plain good.

By Larry Adams

Key Takeaways

  • Companies that integrate authentic Diversity, Equity and Inclusion (DEI) strategies in advertising can enjoy tangible financial benefits and increased consumer loyalty.
  • A significant 39% of the consumer base being multicultural highlights the need for brands to transition from targeted advertising to inclusive content that resonates with a diverse audience.
entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The evolution of DEI over the past several years has been marked by corporate fickleness, with several brands and businesses pledging public commitments and setting up frameworks that have since fallen short of true impact and action. In its first wave, DEI was seen as a moral imperative and compliance issue; the second wave will reveal how the brands that made DEI a true priority will start to see the payoff, literally, in the pockets of shareholders.

It's more important than ever to make sure your brand content is authentic and racially appropriate — not just for your brand reputation, but to build and maintain a loyal and active consumer base.

When diversity and inclusion are recognized as a strategic advantage, it rewards the boardroom and beyond. True DEI not only benefits employees and society at large but also translates into tangible financial returns for shareholders.

Related: Companies Are Deprioritizing DEI. Why They Shouldn't and How to Recommit.

Opening the aperture

Thirty-nine percent of your purchasing audience is multicultural, which means inclusive communication can unlock this market. When you reach a wider audience, your ad dollars go further, new customers are acquired, and shareholders are happy.

Entrepreneurs who are looking for new ways to drive their business forward, look no further than DEI. It's easy to understand the importance of diversity and inclusion across the board, but these efforts are often misunderstood when it comes to marketing.

That's why I founded XStereotype, an AI-powered platform that helps businesses predict how effective content will be across demographics. We've quantifiably proven that inclusivity sells. The more inclusive your advertising is, the more money you'll make.

Our data shows that these traditional demographic markers hold less and less power over purchasing behavior. Socioeconomic status, region and education don't impact intent to purchase as much as lived experiences, including markers of ethnicity, gender, emotion and more. These are more significant signals as to whether or not they'll make a purchase.

Our data reveals a strong correlation between positive emotional responses and positive interpretations of diversity in content. In fact, of the ads we've analyzed, purchase intent scores improved by 10% across the board for ads that received high inclusion scores. And that just makes sense: People are more likely to buy from your brand when they see themselves reflected in the content they're consuming.

From "targeting" to "inclusion"

Now is the time for brands to update their marketing strategies from "targeting" to "inclusion." When we're "targeted" as a demographic, we're often treated as a monolith — that's where the dangers of stereotyping can come into play.

Targeted media can make us feel like a walking statistic, as opposed to consuming content that resonates with us and makes us feel heard. Targeting is the old way of approaching marketing: It leads to negative brand sentiment, and it's innately segregating.

Many brand leaders make the mistake of trying to laser-focus on just one target audience, when in reality, the ads and content that work best appeal to all audiences. To optimize your ROI, reexamine the inclusivity of your message and brand personality.

Companies that close their aperture and put their dollars solely towards more targeted groups are going to shrivel up and shrink and shutter. Opening the aperture is the way to survive: Since 39% of your purchasing audience is multicultural, why not speak to them too?

Related: The Key to Developing More Informed and Inclusive DEI Marketing Strategies

Inclusion sells. Authenticity sells.

Here's a basic example: Let's say a local hair salon has posters in their windows showcasing the beautiful styles they offer. Solid strategy, right? But what if these photos only feature white women, and half of the local community are people of color? A Black woman might walk past that salon every day without stopping in — not because she doesn't need a trim, but because the ads don't resonate. Authentic representation matters — not just because it's inclusive, but because it gets the consumer through the door.

You don't need to create a whole new product or service, just make it more relatable. It's not that these audiences don't want or need what you're selling; it's that your value proposition didn't speak to them because they couldn't connect with your content.

This is the benefit of being inclusive: You make your ad work harder, smarter and better. Multicultural understanding will help these ad dollars go farther and reach a greater audience. Your marketing budget will be optimized when focused on developing content that speaks to a broader audience in a real, non-stereotypical way.

So, next time you're wondering how to boost sales or really nail that next product launch, consider the audiences you might be missing. Prioritize diversity, speak authentically, and watch DEI turn into ROI.

Larry Adams

Entrepreneur Leadership Network® Contributor

Chief Executive Officer, Founder at XSTEREOTYPE / LVA

Proud Black Founder & CEO of XStereotype Larry Adams is a digital marketing and media veteran– the former head of design for AT&T and WarnerMedia, he helped design and develop HBO Max and launched DIRECTV NOW, and most recently served as Sr. Advisor for the Bloomberg 2020 presidential campaign.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Marketing

I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Leadership

You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.