November 2021
Diversity is no longer solely a compliance initiative. 2020 was a watershed moment in America, as consumer demand for diversity, equity, and inclusion (DEI) skyrocketed.1 Now, US consumers are asking companies what they’re doing to improve their DEI practices, and organizations that fall short are losing business.
In today’s world, consumer demand is not exclusive to B2C companies — B2B companies are being judged equally. B2B companies have lost business by partnering with unethical organizations or refusing to diversify their executive suite. B2B organizations looking to increase their DEI footprint are starting to evaluate other companies based on their practices and the diversity of their workforce. Sales organizations, in particular, need to be aware of the cultural moment, as salespeople are often a customer’s first point of contact with an organization.
In August 2021, LinkedIn commissioned Forrester Consulting to evaluate the benefits of having a diverse sales organization. Forrester conducted an online survey with 500 US respondents in B2B sales leadership. Respondents were asked about their sales teams, metrics, and DEI practices, and Forrester found that organizations with stronger DEI practices have better sales outcomes.
You need a diverse sales team to be customer obsessed in 2021 and beyond. Respondents understand the importance of diversity, as 60% stated that diversity within their sales team has contributed to their teams’ success.
Forrester’s maturity model evaluated companies on their DEI practices and found that companies embedding DEI into their day-to-day operations, HR practices, and business decisions have more mature DEI practices.
Firms with leading DEI practices have higher conversion rates, sales attainment, and customer satisfaction scores, compared to firms with lagging DEI practices.
Smart sales organizations are customer obsessed — but what does it mean to be customer obsessed in today’s climate? Microsoft CEO Satya Nadella addressed this topic, stating that organizations must have “a deep sense of customers’ unmet and unarticulated needs [to] drive innovation.”2 Understanding your customers’ unmet needs requires you to understand them on a deep level. This was simple when your customer base was perceived to be homogeneous, but the US’s current population is far from uniform, as 40% of Americans identify as racially or ethnically diverse.3 Diversity changes the lens through which people view the world. To understand customers and be customer obsessed in 2021 and beyond, you’ll need a sales team that that reflects today’s diverse population and the customers you engage with each day — you’ll need a diverse sales team.
Sales leaders understand that the world is evolving and that they must evolve with it. Forrester’s research found:
According to Forrester’s research, 55% of US consumers would rather buy from a brand that reflects the customer’s personality.4 Your organization must represent your diverse customer base to meet this demand.
Sixty percent of respondents stated that diversity within their sales team has contributed to their teams’ success.
Eighty-two percent of respondents predict that the racial or ethnic diversity of their sales team will be equally or more important in the next two years.
This is not just a sales phenomenon; 72% of respondents believe that DEI will play a role in business decisions in the next two years.
72% of respondents said DEI will play a role in business decisions in the next two years
82% of respondents believe the racial or ethnic diversity of their sales team will be equally or more important in the next two years
Base: 500 managers and above responsible for a sales team in the United States
Source: A commissioned study conducted by Forrester Consulting on behalf of LinkedIn, September 2021
LinkedIn commissioned Forrester to understand the relationship between diversity and the success of US sales organizations. Forrester surveyed 500 sales leaders, asking respondents a series of questions about their current DEI practices. The questions focused on four primary factors regarding how companies approach DEI: 1) internal programs and resources; 2) external resources; 3) employee training; and 4) company commitment to DEI. Respondents were scored based on how they answered these questions. Those who consistently showed immature DEI practices were classified as lagging; respondents with status quo DEI practices were classified as scaling; and respondents who consistently showed mature DEI practices were classified as leading. This analysis revealed the following distribution: 20% of surveyed companies have lagging DEI practices, 60% have scaling DEI practices, and 20% have leading DEI practices (see Figure 2).
This study focuses specifically on the comparison between leading and lagging organizations. Based on the above criteria, we’ve identified the following key differences between the two groups:
Forty-four percent of leading respondents believe DEI will play a larger role in business decisions in the next two years, compared to 21% of laggers. Ninety-seven percent of leaders believe it’s important to integrate their company’s values into the sales process, compared to 43% of laggers.
Eighty-eight percent of leading sales organizations report that their sales teams are racially or ethnically diverse, compared to 43% of laggers.
More than 90% of leading respondents have taken manager training to improve their DEI hiring practices, compared to 33% of laggers. Eighty-nine percent of leading respondents have taken manager training to increase inclusion or belonging on their team, compared to 12% of laggers.
Ninety-three percent of leading respondents’ sales teams have undergone diversity, inclusion, or belonging training, compared to 20% of laggers.
Leading organizations are more likely to provide resources like employee resource groups (ERGs), anonymous channels for reporting discrimination, and career advancement programs for underrepresented groups, compared to laggers.
Diversity is not a phase, and it’s certainly not a buzzword. Companies with strong DEI practices have better-performing sales teams. We asked our respondents to report standard sales metrics such as conversion rates, sales attainment, and customer satisfaction scores. Forrester analyzed these metrics across DEI maturity level and found that sales teams with leading DEI practices have better sales outcomes. Specifically, leading DEI teams have:
Leading sales organizations expect their team’s revenue to increase 9% from fiscal year 2020 to fiscal year 2021. In comparison, lagging sales teams expect a 6% increase.
Forrester’s study found that sales teams with leading DEI practices have an average lead-to-opportunity conversion rate of 54%, whereas sales teams with lagging DEI practices are at 26%. In that same vein, leaders’ opportunity-to-customer conversion rate is 24%, while laggers’ is 19%. Conversion rates indicate the effectiveness of a sales team: Sales teams with higher conversion rates tend to have better customer relationships and higher revenue.
Leading sales teams have reached 43% sales attainment for the 2021 calendar year; in comparison, lagging sales teams have reached 31%. Leaders are also more consistently closing deals compared to laggers. Our data found that leaders’ current closed-won rate is roughly $4 million more than laggers’.
In the past year, sales organizations with leading DEI practices have reported a 24% increase in customer satisfaction scores. In comparison, sales organization with lagging DEI practices reported an increase of 17%.
Sales organizations that mirror the US population are more successful. These organizations truly embody customer obsession by creating human connections with their customers. As the US population continues to diversify, so must organizations. Companies that are not focused on increasing diversity are paying the price, as their sales teams are performing notably worse than companies with diverse talent.
Forrester’s study found that sales teams with leading DEI practices have an average lead-to-opportunity conversion rate of 54%, whereas sales teams with lagging DEI practices are at 26%.
Forrester’s study found that sales teams with leading DEI practices have an opportunity-to-customer conversion rate of 24%, while laggers’ is 19%.
Base: 500 managers and above responsible for a sales team in the United States: 100 with leading DEI practices, 300 with scaling DEI practices, 100 with lagging DEI practices
Source: A commissioned study conducted by Forrester Consulting on behalf of LinkedIn, September 2021
Companies that have invested in DEI are experiencing the benefits in the form of better sales outcomes. There are a variety of potential reasons for this. First, we know that when employees feel a sense of belonging — meaning they feel psychologically safe — and can be fully themselves in a work context, they are more likely to be engaged.5 Organizations with a high level of engagement outperform their competitors in revenue growth.6 Second, diverse teams are more innovative than their more homogeneous counterparts, leading to a higher percentage of revenue being generated through innovation.7 The fact that we see these differences across KPIs in organizations that have more mature DEI practices is a clear indicator of the benefits that diversity, equity, and inclusion bring to the business.
Forrester’s in-depth survey of 500 sales leaders yielded several important recommendations:
In this study, Forrester conducted an online survey of 500 sales decision-makers at organizations in the US to evaluate how diversity affects sales outcomes. Survey participants included decision-makers in account management and business development. Respondents were offered a small incentive as a thank-you for time spent on the survey. The study began in August 2021 and was completed in September 2021.
Respondent Level | |
---|---|
C-level executive | 5% |
Vice president | 20% |
Director | 32% |
Manager | 44% |
Position/Department | |
---|---|
Sales | 100% |
Company Size | |
---|---|
2 to 499 employees | 9% |
500 to 999 employees | 26% |
1,000 to 4,999 employees | 34% |
5,000 to 19,999 employees | 16% |
20,000 or more employees | 14% |
Region | |
---|---|
USA | 100% |
Note: Percentages may not total 100 because of rounding.
1Source: “The Demand For Racial Equity Is Forcing A Brand Strategy Rethink,” Forrester Research, Inc., August 2, 2021.
2Source: “Satya Nadella email to employees: Embracing our future: Intelligent Cloud and Intelligent Edge,” Microsoft News Center, March 29, 2018.
3Source: “Quick Facts,” United States Census Bureau, July 1, 2019.
4Source: “Research Overview: Corporate Values,” Forrester Research, Inc., September 4, 2020.
5Source: Cecelia Herbert, “Belonging: The new top driver of employee engagement in 2021,” Qualtrics blog, December 9, 2020.
6Source: Gallup, “State of the American Workplace,” 2017.
7Source: Rocío Lorenzo, Nicole Voigt, Miki Tsusaka, Matt Krentz, and Katie Abouzahr, “How Diverse Leadership Teams Boost Innovation,” January 23, 2018.
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