Why Branding As A Family-Owned Business Puts You Ahead Of The Pack

What do IKEA, Dr. August Oetker, Ford Motor Company and Wal-Mart have in common? Obviously, they are huge worldwide brands, but less obviously they are all successful family-owned businesses. (Yes, Ford is family-owned.) While virtually no one on earth doesn’t know these names, the multi-generational lineage of these companies has been integral to their success — in the popular zeitgeist, family-owned companies embody stability, longevity, and if nothing else, an ability to get along. Even though branding a family-owned business often starts with the history, at the same time, a family-run business must be versatile and adaptable to survive, so add “tough” to the list of attributes.

The warm and fuzzy factor

Branding for any business is more than a snappy logo, a marketing budget, excellent product or great customer service — for good or ill there’s always the backstory. Are the principals brilliant teenagers who may or may not flame out tomorrow, or stable grownups who have worked hard to create something real for future generations? While not all family-owned businesses are de facto moral or reliable, a family-owned business nevertheless engenders a strong sense of trust in consumers. Which brings us to the warm and fuzzy factor: family-owned businesses seem more stable, more customer-friendly, more approachable and more trustworthy. Interestingly, even the appearance of a family connection increases market visibility and consumer trust: witness the completely false “family name” of the Haagen Das ice cream brand. Trust equals sales, sales equal profitability. Tell the family story, take it to the bank.

Recognizing and using the value of a family back-story

While many of the truly successful family-owned businesses consider family branding extremely important, not all of them are using this potent marketing tool. One analysis showed that only one-third of the top 100 family businesses in the world actively highlight their brands as family-owned. Actively promoting a multi-generational story grounds your brand in the public mind in a positive way.

Take the Møller family, owners of Aars, one of Norway’s leading automotive importers and retailers. The Møllers have been strongly involved as a family in their business operations for over 80 years, but only recently started to actively communicate the family aspect as part of their branding strategy. CEO Sigurd Haavik has several reasons for moving in the family-owned direction with their branding:

In general the family aspect gives most people positive associations. Internally it unites the owners, especially the next generation when their assets grow to include more than what’s historically been the core business. It also unites employees and managers across business areas by creating a common sense of belonging to the family.

The Cain and Abel concern

All businesses, including family businesses, need to attract investment partners, but unless a company is already prominent, a family-owned firm may have to work harder to be offered the best investment opportunities. This is because investors first approach companies that are top-of-mind — and family-owned firms often miss that optimal positioning. Another reason is that, rightly or wrongly, investors may worry about potential disagreements between family members. However, there’s no more reason to worry about family members disagreeing than about non-family members disagreeing, and a strong, inspiring back-story positively influences investors’ perceptions as well as consumers.’

For Sigurd Haavik from Aars, branding the business as family-owned has had a positive impact on both the business and the bottom-line. “Four years after introducing a clear branding strategy for Aars we have attracted better candidates and more relevant investment cases,” says Haavik.

What’s in a name?

It’s no accident that many family businesses are named after their founders — Wal-Mart after Sam Walton, Denmark’s Bang & Olufsen after Peter Bang and Svend Olufsen and Forbes after B. C. Forbes, to name a few. The choice of name clearly demonstrates the family element of the business. A recent study has shown that this kind of eponymy – using the owner or owners’ last name in the company brand – not only has a positive impact on sales but also on company performance. Employees of most family-owned brands are generally happier and more productive. They feel better about their jobs, and it shows.

Conversely, scandal or public mistrust of a family-owned business reflects directly back on an individual or the family members, instead of on anonymous shareholders. Happily, this creates even more incentive for family businesses to work together to avoid negative attention and increase brand credibility.

So finally, what’s in a name? A higher profile, increased consumer confidence and more profitability,  for starters.

Happily ever after

Most businesses strive for uniqueness, but in a crowded, cacophonous market it’s challenging to convey how your business is not only different from but better than, all the others.

And . . . your grandchildren will thank you.