Promoting Racial Equality with Products and Services

Surveys confirm that Americans believe that companies can and should advance racial equality by doing a better job in designing thinking around the black experience in their products and customer satisfaction and commit to offering products and services that effectively meet the distinctive needs of markets of color. 

The following is an excerpt from the chapter on Racial Equality and Non-Discrimination just released on the website of the Sustainable Entrepreneurship Project.

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In a 2017 report called The Competitive Advantage of Racial Equity, PolicyLink and FSG argued that companies could gain a competitive advantage, and promote racial equity, by offering products or services that effectively met the distinctive needs of markets of color.  In June 2020 the Harris Poll organization surveyed Americans about what companies should be doing to advance racial equality and argued that the results made the case for companies to do a better job in designing thinking around black experience in their products and customer satisfaction.[1]  In order to be successful, companies needed to begin by authentically understanding the needs of markets of color and how they differ from those in majority-White markets.  While this appears to be foundational, it is often difficult given the dearth of data on the needs and behaviors of consumers of color.  The next step is identifying and addressing the root causes for why a company’s existing product or service might not be successful in communities in color.  For example, communities of color have historically been challenged by lack of access to transportation, which means they cannot easily travel to receive services or purchase products in person.  Companies do not have the resources to reconfigure public transit systems, but they can develop innovative ways to deliver their products or services to those communities.  Finally, companies need to design products and services (or redesign existing products and services) to meet the discrete needs of communities of color.  An example given in the report was the establishment of grocery stores to reach lower-income people of color in areas of Philadelphia that had been ignored by the big national chains that not only offered customized food items but also complimentary services that were needed, yet unavailable in the community (e.g., health clinics).

The example given above highlights another way that companies can re-think their business models in ways that allow them to expand the access of communities of color to their products and services: entering into partnerships with businesses and/or nonprofits led by people of color who have a better understanding of the needs of their communities and creating ideas for delivering the company’s products and services in those communities.  The same report mentioned above described how commercial health insurer Cigna collaborated with a local health care system in Memphis, Tennessee, to promote breast cancer screening among its black customers living in neighborhoods with limited access to screening facilities, a partnership that eliminated previously identified gaps in screen for black patients, reduced unnecessary costs of Cigna and improved the overall quality of the local health care system.  The report stressed that these types of partnerships needed to be serious and substantial and provide meaningful benefits for both partners and their beneficiaries (i.e., the community members). 

Cigna also provided an example of how a company could develop new products or services that meets the needs of minority-owned small businesses that are struggling to survive the health and economic carnage of the Covid-19 pandemic.  Many small businesses, particularly in communities of color, were shuttered by the pandemic and many of those that survived have seen revenues decline sharply and have had to terminate or furlough their employees.  As those businesses reopen, many of their owners have prioritized providing their workers with access to affordable health insurance and programs that can support workers’ health and well-being, realizing that caring for the physical and mental health of their workers is essential if those businesses are to have any reasonable hope of prospering following the societal trauma caused by the pandemic.  However, the high costs of health insurance for businesses and individuals are well documented and the good intentions of small business owners mean little if they cannot afford the costs of offering the benefits.  In response, Cigna announced in June 2020 that it would be collaborating with innovative health insurance provider Oscar to offer small businesses in Atlanta, the San Francisco Bay Area and across Tennessee access to affordable local health insurance products.[2]

Another obvious step that companies need to take is conducting a thorough and thoughtful assessment of the branding and marketing of its products and services to identify and eliminate hurtful racial stereotyping.  For example, within weeks following the death of George Floyd Quaker Oaks took what many had argued was the long overdue step of getting a new name and image for its 130-year old Aunt Jemima brand of syrup and pancake mix, conceding that its origins “are based on a racial stereotype” and prior efforts to “update” the brand to be “appropriate and respectful” had been insufficient.  In making the announcement, Quaker, a subsidiary of PepsiCo, said that the move was part of the company’s broader efforts “to make progress toward racial equality” and signaled that it intended to continue to “take a hard look at our portfolio of brands and ensure they reflect our values and meet our consumers’ expectations”.  Uncle Ben’s rice will also be rebranded, a move that its parent company Mars Inc. explained as follows: “Racism has no place in society. We stand in solidarity with the black community, our associates and our partners in the fight for social justice.”  When making such assessments, companies need to engage and involve people of color in order to understand the problems with historical branding and marketing practices.  These are not new issues and companies need to dig deeply into the root causes for not making the changes earlier. 

While making the necessary reforms to achieve racial fairness and equality within the organization and in relationships with external stakeholders is the right thing to do regardless of traditional business and financial considerations, Scott suggested that companies can also consider the feasibility of creating a branding campaign around fairness and equality based on identifying and promoting a real attachment between those ideas and the company’s products and services and the way in which the company treats its employees and customers.  Scott noted that companies that develop a reputation for being legitimate and credible supporters of fairness and racial equality benefit from stronger bonds with their customers and are able to tap into a wider and more diverse pool of talent in order to fulfill their recruiting requirements.  In addition, such companies are perceived as more trustworthy in the communities in which they operate and are thus able to have greater impact in their community engagement and investment initiatives.[3] However, any investment in branding comes with responsibility and the need to be accountable for acting in the manner suggested by the campaign.

[1] Americans to Companies: “Do More For Society” (The Harris Poll), https://theharrispoll.com/americans-to-companies-do-more-for-society/

[2] Cigna + Oscar Helps Small Business Owners who Recognize that a Healthy Workforce is the Key to a Vibrant Business in COVID-19 Environment, Biospace (June 23, 2020), https://www.biospace.com/article/releases/cigna-oscar-helps-small-business-owners-who-recognize-that-a-healthy-workforce-is-the-key-to-a-vibrant-business-in-covid-19-environment/

[3] M. Scott, Practical Tips: How CEOs and Directors Can Lead on Racial Injustice, Chief Executive (June 5, 2020), https://chiefexecutive.net/how-ceos-and-directors-can-lead-on-racial-injustice/