According to the Institute for Family Businesses there are over 4.7 million family firms in the UK. They account for more than two-thirds of the business community, making them a very important part of the UK economy.
In today’s impersonal, online age where we increasingly buy from organisations we barely know, many of whom have no high street presence, you could be forgiven for thinking that the notion of a family business is no longer relevant. This however, could not be further from the truth. Only 13% of consumers say that no one cares whether a business is a family firm or not, and just 4% feel they are an outdated notion.
These are just some of the findings in our. For the study we surveyed 534 people to get a sense of what consumers feel when they hear a company is a family business. Does it drive their decision to buy, or impact on their customer expectations? The report provides valuable insights for SMEs who are considering marketing their business as family-run.
Overall, it seems that the word ‘family’, in the business world, carries clear and positive connotations. Furthermore, any perceived negatives appear to be neutralised by other benefits:
- Consumers expect family businesses to be ‘long established’ (51%), ‘providing value for money’ (51%) and in-service terms, ‘good’ (69%), ‘personal’ (75%) and ‘trustworthy’ (62%).
- Consumers associate family firms with being ‘small’ (69%) and ‘local’ (66%) – so larger companies with national or international ambitions need to ensure their marketing counters these perceptions.
- While 35% of respondents suggest that a small family business might be a bit ‘less professional’, a big plus for them is being able to ‘deal with the owner who is the decision maker’.
Does it impact sales?
So, do these preconceptions matter? Our research suggests they do. There’s little to be lost and much to be gained from firms marketing themselves as family enterprises.
- When comparing like for like businesses, only 3% of consumers are less likely to buy from a family business and 46% are more likely to buy from one.
- For 32% of consumers, a larger, systemised company which is also a family business offers the best of both worlds – ‘reliability’, ‘quality’ and a ‘personal touch’.
- Only 6% of people associate family firms with ‘high tech production’ and only 3% with ‘mass production’. If a small business wants to be known for its large operative scale, it might be wise to distance its association with the family business tagline.
- Irrespective of size, 45% believe that manufacturers of products associated with the family, such as toys and baby equipment, gain from being a family business.
- One third of respondents are put off by financial, technology and healthcare companies using the family descriptor. By the same token in other industries – retail, restaurants, pubs and hotels – companies gain from being described as a family business.
In saying this, firms should pause for thought before actively marketing their firm as a family business. This is because the sector a company operates in, and its size can affect how helpful the ‘family business’ tag is.
The employer brand
We also explored the impact of the ‘family’ tag on the employer brand. We found that a company which promotes itself as a family business is more likely to attract talent across all age ranges, but it needs to take care that perceptions around nepotism, poorer pay and job security are corrected.
- 44% of people are more likely to want to work for a business if they know it’s a family enterprise; 42% are not influenced either way.
- Family firms are seen to be more caring and attentive to the work/life balance.
- There are some questions raised about the professionalism of HR functions. The recruitment function therefore needs to not only play to its strengths, but to back these up with slick processes.
- Almost two-thirds of people believe that top jobs will be reserved for family members and 35% feel that non-family members of staff will have fewer opportunities to shine. As well as this, 32% perceive that job security is less assured in family businesses.
- It is important to stress that those who actually work for family firms are much less likely to hold these views – this suggests that using existing staff as brand ambassadors might be an effective recruitment strategy.
Responsibilities & risks
So, if using the phrase ‘family business’ in a company’s marketing generally helps boost its sales and attracts talent, should every family-run business go down this route? Our research suggests marketing a business’ family connection is not something to be entered into lightly; it can’t simply be a marketing strapline. To be meaningful it needs to be evident in the way a company behaves, its values, approach to service and so forth. In short, people expect family businesses to live up to certain standards.
- 44% expect firms to do more in the community and 49% believe examples should embrace a clear set of values which can be observed in the way the business behaves.
- There are also some risks to bear in mind – almost half of respondents believe that a family business risks its reputation being damaged by the actions of the family, something to consider in any crisis and issues planning.
There are many ways to describe a company as being a ‘family business’ and plenty to be gained by doing so. How this is done, and played out across the marketing mix, however, must depend on the business in question’s sector, age, size and strategic needs. As well as this, family businesses must articulate what it means to be one and behave accordingly.
About the Author
Louise Findlay-Wilson is the founder of. During her 30-year career she has handled campaigns for brands such as HSBC, Asda, the BBC and St Paul’s Cathedral along with SMEs and family businesses. Louise is a regular media commentator and speaks about PR at events all over the UK.