Let's turn to the question every dealer, every business should ask themselves when presented an opportunity to improve their business —"Why?" "Why should I even give you the time of day to discuss this concept with me? Specifically, "Why should this matter to me, my business, my market, and my customers?"
I'm going to tell you why, but I'm first going to begin by discussing the lifeblood of your dealerships and your business. It begins and ends with customers. No matter where your dealership is located, in an urban area, whether it's on the outskirts of town where the city ends and the country begins, or in rural markets, these areas are becoming more and more increasingly diverse.
Here, we have examples and data that showcase the fact that rural areas are really representative of about 25%, or one-quarter of the population of people of color. In some areas, even more. What this means is that you're not going to be losing your traditional customers. It means that you have an opportunity to market to new customers who may be in the market for chainsaws, lawnmowers, zero turns, lawn tractors, compact tractors, and more.
When these customers are ready to buy, as a business, you're going to want to ask yourself a few questions: "Do I know these customers?" "Do they know me?" "How can I be their dealership of choice when they are in the market to buy a product?" That's why it's very critical to understand that diversity is increasing in your markets, and you want to be able to tap into these segments to bring them into your store.
There's an abundance of business benefits from diversity and inclusion. McKinsey & Co. has conducted studies that highlight the benefits. I'm only going to highlight a few of the outcomes, as the benefits beyond what is noted on the graphic above extend even beyond what I'm going to share with you.
Diverse and inclusive businesses outperform their peers in profitability by 36%. They are also 70% more likely to capture new markets and enjoy approximately 20% in new innovation revenues. These are the facts, the data is tangible and measurable. It should capture the attention of every business owner with the question of, "How can I bring more diversity and inclusion to my business and help grow even more business?"
Let's now discuss reason number three. Your ability to target critical growth segments. The Millennial segment’s purchase power is growing, and it cannot be ignored. In addition, right behind them, is another segment of the future and that is called Gen Z. Their numbers, when combined with Millennials, outnumber both Gen Xers and Baby Boomers.
More importantly, these segments are very diverse. They're more diverse than any other generation. Research shows that 83% of this segment seeks out brands that represent and support diversity, are socially conscious, and are purpose-driven. But don't take my word for it, Tractor Supply's CEO says that they're going to continue to depend on Millennials to drive their business growth.
“Millennials are leading a rural revitalization. Millennials departing major cities to adopt suburban and rural lifestyles have emerged as a key customer base for our company,” Hal Lawton, Tractor Supply’s CEO, says.
Striving for diversity is not only essential to growing a successful business, but it's key to connecting to the Millennials and Gen Zs to help fuel that growth. That's why, when connecting with this market, you must seek and find ways to prioritize diversity and inclusivity within your business.
Now, this extends from who and how you advertise, to who you hire and your efforts to demonstrate diversity and inclusion. It's critical to foster relationships with Gen Zs and Millennials. They not only value diversity, but they celebrate it and they practice it every day in their lives.
In Part 3, we’ll look at 3 ways your dealership can benefit from diversity and inclusion.