Almost half (46%) of consumers are more likely to buy from a company which markets itself as a family firm, than one which doesn’t according to new research by Energy PR. Indeed, big well-known companies playing on their family credentials attract 15 more customers for every one they put off – with young people as likely as older consumers to be fans of family firms.
However, such marketing comes with responsibilities. People expect family firms to behave differently – 44% expect them to do more in their community, 49% expect them to have a clear set of values that they will live by and 77% expect them to be friendly, caring employers.
“When it comes to using the ‘family business’ brand, you can’t have your cake and eat it,” argues Louise Findlay-Wilson, managing director of Energy PR. “Yes, there’s a huge amount to gain, but you have to wholeheartedly behave like a family business – and among the consumers we studied that means having a more caring ethos which impacts on everything you do.”
For its in-depth study ‘Family Business’ Brand – does it work and how?, Energy PR questioned over 1,000 consumers about their attitudes to family businesses. It found that only 4% feel family firms are an outdated notion and just 13% believe that no one cares whether a business is family run or not. Younger consumers are as likely to favour and buy from family businesses as older ones.
According to the research the phrase ‘family business’ has clear often positive connotations, with over half (51%) saying they associate such firms as being long established, over two-thirds with providing a good service (69%), being personal (75%) and trustworthy (62%).
For companies trying to look bigger and national there are potentially some draw-backs, with people more likely to assume a family firm is local (66%) and small (69%). Indeed almost one in four (23%) say the family connection makes an unfamiliar large business sound worse. However larger, well-known companies which also choose to play on their family credentials have much to gain; they will attract 15 times as many customers as they alienate. Indeed 32% of people say a larger systemised company which is also a family business offers the best of both worlds – reliability, quality and a personal touch.
The overt marketing of a company as a family firm is not without its risks. Almost half of consumers (49%) suggest there’s the real potential for negative publicity if a scandal arises involving a family member.
Using ‘family business’ as a key brand device also presents some challenges to companies trying to cultivate a certain reputation. For instance only 6% of people associate family firms with high-tech, 3% with mass production and, on the whole, the family descriptor is seen as a detractor for firms operating in the financial, tech and healthcare sectors.
“Our research has borne out what we have found when working with lots of family businesses. There’s some complex, careful thinking that needs to be worked through when deciding whether you actively describe your business as family-owned or family-run. You need to think about where you are in your business’ development, your sector, size and what you want to be known for. Companies need to think about subtleties such as the difference between saying you are ‘family-owned’ and ‘family run’. You’ve also got to think about what it will mean for the family, and how you are going to deliver on the ‘family business’ promise.”