by Matthew Jones

Today’s buyers are more educated and informed than ever before.  If you want to buy a CD player, a refrigerator, or even a car, there’s a wealth of information available to tell you exactly how each product performs in just about every category that’s important to you – reliability, resale value, cost of ownership and dozens of other parameters.

But what if you want to find out about your favorite brand’s involvement in the African-American community?  What if you want to know about their philanthropic efforts before you buy? Where do you go for that information?

The National Association for the Advancement of Colored People (NAACP) believes consumers should have the answers to such questions; and for the past ten years, the nation’s oldest and largest civil rights organization has been scoring the performance businesses in some of America’s most influential industries, in terms of how they relate to communities of color.

The 2006 NAACP Consumer Choice Guide offers a comprehensive look at the diversity efforts of businesses in five industries: Lodging, Telecommunications, Financial Services, General Merchandising and Automotive. (Click here to see NAACP Issues Annual Corporate Report Cards as reported in the July 2006 edition of diversityinbusiness.com).

“Our main goal was to determine some level of economic reciprocity between the world’s leading corporations and the African-American community,” said John Jackson, chief policy officer for the NAACP.

Each industry was graded across five categories.  The first four categories were applied universally. They include Employment, Advertising/Marketing, Vendor Relations (Supplier Diversity), and Charitable Giving.  The fifth category was unique to each industry.  For example, the fifth category for General Merchandising was Location, while the fifth category for Financial Services was Community Reinvestment.  The NAACP selected Service Deployment for the Telecommunications industry; and   Property Ownership for Lodging.  The fifth category examined for the Automotive industry was Dealerships.

The overall score was calculated from the average of the five category scores.

“We were very deliberate and intentioned in selecting the criteria,” explained Jackson.  “We looked at where, and how, a corporation could really help sustain the community – and that means jobs, doing business with African-American-owned businesses, and philanthropic support.”

In calculating the overall grades, the NAACP gave each category essentially equal weight, although the questionnaires from which the scores are calculated contain a different number of questions per category.

“(Based on) the number of questions, the weighting is skewed toward employment,” said Jackson.  However, this is bound to change, as the NAACP plans to look deeper into how each of the five categories affects the community in the long run.

For instance, while diversity in employment may give African-Americans greater opportunities to participate in corporate America, diversity vendor relations may help build and sustain an African-American economic infrastructure.  “Moving forward, we’ve determined that greater weight will be given to supplier diversity,” continued Jackson.

According to Jackson, there are myriad opportunities for corporations to increase and improve their diversity efforts in the general course of doing business – unfortunately, companies are putting in too little effort, or in some instances, none at all.

“If you look at today’s largest global companies, they are spending billions of dollars (to build a relationship with a new market),” said Jackson who believes corporations should look at the domestic multicultural market with greater consistency.  “Take the lodging industry – they have to purchase sheets; someone has to wash them; they need to buy shampoo and hand lotion for the bathrooms; and they have to build the hotels.”

Jackson and the NAACP are aware of these needs, and of the importance of helping corporations maximize the diversity opportunities.  “We want to influence that cycle.  We want to make sure there is some element of African-American economic involvement (built into the procurement process).”

Some industries are more conducive to diversity involvement than others.  The unfortunate fact is, African-Americans are all but shut out of some global business arenas.  In putting together the Consumer Choice Guide, the NAACP wanted to focus on the greatest areas of opportunities, and where a concentrated diversity effort makes the most sense.

“We looked at those industries where (leading corporations) are deriving a lot of their revenue from the African-American community,” said Jackson.  Clearly, the industries that were chosen for study reflect that.  There are, however, several business arenas that are not included, such as Oil and Energy.

According to Jackson, the fact that the oil industry is dominated by a relatively small number of corporations disqualified it from the study.  “There’s not an adequate amount of competition to actually make a difference – it’s hard to give consumers a choice,” he said.  “However, it has become a little more open.  We’ll continue to look at that industry, in particular.”

Empowering the Consumer

While the information in the 2006 NAACP Consumer Choice Guide provides valuable insights as to how far corporate America has come on the diversity front, its greatest value lies in its potential to shape consumers’ buying habits.

The NAACP has put a large effort behind getting the word out about its business report, and the Association plans to do even more in the future.  The first step, according to Jackson is to line up the most active and visible partners possible to help spread the word.

“We work with a number of non-profit organizations – Black Greek organizations, philanthropic organizations, and churches (among others),” said Jackson of the NAACP’s communications partners.  Other key organizations that are charged with alerting its members about the Consumer Choice Guide include The 100 Black Men, African-American Chamber of Commerce, The Black Flight Attendants of America, Inc. and the National Association of Black Journalists (NABJ).

Jackson is also hoping for some support from the survey participants, particularly those that earned higher scores.  “The corporations that did well will want to get the word out,” he explained.  “We’ll assist them in getting better, helping them get from a ‘B’ to an ‘A.’”

Most of the top organizations that compile this type of information – J.D. Power, Consumer Guide, and other leaders – license the information so that highly ranked participants can publicize their scores.  While it tends to be good business, the NAACP, for the time being, is passing on the notion of charging a licensing fee to its participants.

“We know they use the information, but no, they do not pay a fee,” said Jackson.  If corporations want to tout their rankings in the Consumer Choice Guide, then that’s good for the NAACP, as well.  “We want them to participate.  It’s like a partnership.  For those that do well, we want to make consumers aware of that.”

Don’t rule out licensing in the future, however.  While the NAACP wants to offer as many incentives as possible to help make consumers aware of the report, its hard to pass up such revenue potential in the long term – presumably, once the awareness and participation gains greater traction.  “We’re going to sit down and talk more about (licensing),” said Jackson.

As for the organizations that did not do well, there is still hope.  The NAACP has been reaching out to all of its participants in the hopes of nurturing a greater, more effective diversity strategy for all its partners.  The actual programs and activities vary, depending on the organization in question, as well as the areas where they may be struggling.

“(Our follow up changes) depending on the areas where they (achieved a low score), explained Jackson.  “If they’re telling us that they have a hard time identifying African-American vendors, we’ll help (put them in contact with some).  We want to serve as a bridge between minority vendors and employees that want to work in a particular industry, and the corporations that lead those industries.”

Putting the Ads on the Spot…

Consumers often draw much of what they know – and feel about – a certain brand from marketing.  When it comes to diversity, however, consumers have little to help them determine what corporations are doing to benefit their communities.

Marketers try to create an air of diversity in a variety of ways – hiring multicultural marketing firms to get their messages out to target audiences, using people of color in their national ad efforts, and sometimes running general market spots on television programs that appeal to African-Americans.  To get closer to the truth in advertising, the NAACP made marketing a major part of each corporation's overall score.

“We looked at the spending  – what percentage of the advertising budget was spent with minority agencies,” said Jackson.  “We paid attention to the campaigns that targeted the African-American community.”

According to Jackson, it’s the ad-spending that most directly puts money back into the community – much more so than just putting faces of color in the advertisements.

“If a corporation wants to market to a certain community, then it’s a great opportunity to pull in the members of that community,” explained Jackson.  While the organization thinks it’s a good thing to offer a multicultural face in national advertising, it certainly doesn’t trump actual spending with ethnic agencies.

“(Marketers who use people of color in their general market ads) make consumers feel comfortable about buying their products – like they’re part of the brand, but should they get a high score?  Probably not,” continued Jackson.  He does not believe diversity of pitchmen equates to economic reciprocity.  For John Jackson and the NAACP, the bottom line is…the bottom line.

Across the board, Jackson doesn’t see the kind of inclusion and expansion among the world’s largest corporations that he feels should exist.

In the ten years that the NAACP has conducted the survey, no one has earned an ‘A.’ Most of the industries surveyed, as well as the corporations that compete within them, have seen very little growth in diversity involvement, if any at all.  In addition, there are still a large number of very major players across the board that do not, and have not, participated in the survey at all.

While some are frustrated with the persistent need to monitor exchanges between Corporate America and the African American community, others take a more optimistic view.  They understand that social progress often occurs incrementally, especially in Corporate America, and that progress, regardless of its size is progress nonetheless.

As for John Jackson, he will continue to ask the questions and shine the spotlight on the results.  Why, you ask.  It’s because he is the ultimate optimist.  As long as the survey participants are willing to improve, Jackson and the NAACP will be there to help them.

The End