Why the family business brand is becoming so important

Walmart likes to talk about its founder. Image: Walmart. 
Walmart likes to talk about its founder. Image: Walmart. 

Family businesses are increasingly using the fact that they are family-owned  in their marketing and communications efforts to differentiate themselves from non-family businesses and help bolster their overall brand among employees, consumers and even suppliers.

An analysis by Family Capital of the top 100 family businesses as measured by revenues, which are 50 years or more old, found that nearly a third (32) are using some reference to being a family business in their branding. Although, out of those 32, there were considerable differences in the intensity of that branding.

For example, Wal-Mart Stores, the biggest family business in the world in terms of revenues, made considerable references to its founder Sam Walton and his legacy in its branding, but didn’t mention that it was a family business. In contrast, Louis Dreyfus Holdings, a classic business-to-business company with revenues of $74.3 billion in 2013, uses the fact that it’s a family business in its branding.

Other top 100 firms using a similar upfront family branding included Germany’s Rethmann SE & Co, and Dr August Oetker, France’s luxury holding company Kering, and the US supermarket chain Meijer.

Interestingly, the analysis found that out of the top 100, German family businesses are more likely to brand themselves as a family business, with, apart from the two mentioned above, Heraeus Holdings, Merck, Adolf Wurth and Helm all prominently saying they are family businesses.

Some of the companies where there was no family business branding did focus on their commitment to long-term growth and an even greater number mentioned sustainability in their marketing materials. Whether they felt that they could use these terms more readily because they were family owned is unclear. 

A recent survey of UK family businesses found that the sector extensively promotes the family nature of their companies to their stakeholders, most notably to current and potential employees, customers and suppliers. The research carried out by the Institute for Family Business by academics Claudia Binz Astrachan and Joseph Astrachan found that out of the 125 companies surveyed, 54% declared that branding the family business was an important part of their marketing strategy.   

Sixty-four percent of those surveyed believe family business brand promotion to be beneficial. The survey said: “A distinct family business brand is assumed to contribute to a company’s image of trustworthiness (81%), social responsibility (70%), quality-orientation (68%) and customer-orientation (67%).” A further 66% said that they find their corporate reputation to be superior, as compared with their non-family competitors. And there was no differences in these perceptions from companies operating in business-to-business and business-to-consumer contexts.

Despite the growing trend for family businesses to brand the family part of their business, it’s by no means universal. Out of the top 100 family businesses, nearly two thirds made no more reference to their history or heritage than a non-family business and there was certainly no reference to the fact that they were owned by a family in their histories.

The IFB study talked about the reasons why family businesses might not advertise that they are family owned. Many families are concerned about their enhanced family visibility that such branding brings and the attendant personal risk such as increased scrutiny or even public harassment in cases of family, or company-related scandal, said the IFB.

“Several interviewees felt that the family nature of the business may also evoke negative associations with some of their stakeholders (such as lack of professionalism or nepotism…”