Diverse Workforce Helps Build Business

http://knowledge.insead.edu

The Future of Business is Multi-cultural
It's a fact of our changing society:  businesses, especially service businesses, that want to succeed with minority customers should consider hiring frontline employees who represent those ethnic groups, particularly when the business caters to Hispanics or Asians, a recent UT Arlington study contends.

Elten Briggs, associate professor of marketing, and Detra Montoya, clinical associate professor of marketing at Arizona State University's W.P. Carey School of Business analyzed the influence of shared ethnicity on consumer behavior using an experiment and a survey. The experiment focused on 112 Hispanic customers of a financial services firm in a major U.S. metropolitan area. The survey asked 285 Asians, Hispanics and Caucasians in a major U.S. city about marketplace experiences that could be attributed to their ethnicity.

"The study showed that culture plays an important role in the interaction between businesses and customers," said Briggs. "Customers may feel like they have some common ground with the service representative or sales person if there is a shared ethnicity."

(Past research shows that most business owners and managers tend to hire people they would like to be friends with - and not the candidate or candidates who best fit the job description or the customer perception.  Something to keep in mind the next time you hire for a front line position.  - Ed.)

The influence of culture on interactions between contact employees and customers is becoming an ever-important consideration as marketplaces worldwide continue to diversify.  Rachel Croson, dean of the UT Arlington College of Business, said Briggs' research points to the fact that the future of business is multi-cultural.

Businesses that Succeed will be Those Who Customize Customer Experience

Suggested Reading
Click on Image

"The future of business will involve an increasing diversity of the customer base of many firms, both within the U.S. and internationally. The businesses that succeed will be those that understand how to customize the experience they give these customers," Croson said. "Dr. Briggs' work identifies how to do this effectively, and will have important implications for both the practice and theory of marketing."

"The study shows that when when customers share the same ethnicity with their salesman or customer service agent," Briggs said, "they generally have a more favorable perception of the business."

Briggs noted that with Asian and Hispanic customers, the relationship between customers and agents was even tighter because they often were linked through a common language.

• The experiment demonstrated that when Hispanic customers thought their customer service or sales representative would be of the same ethnicity, it increases the chances of the customer patronizing the business.
• Hispanic and Asian survey respondents reported having better retail and service experiences with employees of the same ethnicity, often perceiving that they were receiving preferential treatment from the employee.

*  *  *  *  *

Story Source: Detra Y. Montoya, Elten Briggs. Shared ethnicity effects on service encounters: A study across three U.S. subcultures. Journal of Business Research, 2013.