The debate on family business branding

http://www.ifb.org.uk/
Attending the 10th IFERA World Family Business Research conference at Lancaster University provided the chance to hear some leading edge thinkers on family business discuss how the sector is creating competitive advantage. One area of potential is the opportunity for family firms to take advantage of family business branding either at the corporate and/or product brand level.

Successful branding relies upon a combination of differentiation and demonstrating added value, and in this context family business provenance can lend good support. Research teams from Jönköping University, Sweden, and Ilinois State University agreed that there are opportunities when developing a firm’s branding strategy to highlight family firm credentials.

The researchers emphasised that the prime attributes for consumer choice will normally relate to good customer service, strong product features etc. It’s worth noting that family firms may have some inherent advantages in this area as the recent IFB/YouGov survey of the UK public showed that 62% already think that family firms often provide better customer service than other types of business.

According to the experts family business branding should therefore best be viewed as accompanying the overall effort to brand the company and its products. The result is that it helps strengthen the reputational capital of a firm - robust reputation capital is an asset that can allow a firm to extract a premium price for goods and services offered.

Successful examples range from huge corporations such as SC Johnson to small family firms such as Darlington and Daughters, both of whom helped illustrate the point that family business branding can lend credence either at the corporate (SC Johnson), or product brand level (Darlington’s). However IMD, who are also researching the subject through testing consumer’s knowledge about brand provenance, caution that the 50% accuracy score of family firms is low. They say this should make us think where and how to position family business corporate brands with the general public.

Trust - a source of competitive advantage

http://www.ifb.org.uk/
This week’s IFB national conference has the theme Trust: A source of competitive advantage. Our view is that family businesses are uniquely placed to be at the forefront in the drive to revive trust in UK business.

Progressive family firms place great importance on a clear set of values, such as:

• Entrepreneurship - having a can do attitude

• Respect for People - fostering a strong workplace environment

• Social Responsibility - engaging with local communities

• and Sustainability - taking responsibility for the environment

Combine these values with a sense of stewardship, of being in business to succeed in the long-term and we have created a solid foundation for Trust. And this is of course Trust in the widest sense with all stakeholders; customers, employees, the supply chain, the public and indeed Government.

Knowing how family firms are perceived by the British public is important so the IFB commissioned a YouGov survey– over two thirds of the public recognise the important role family businesses play in economic growth and employment (68%) and almost two-thirds believe family businesses provide better customer service than other types of business (62%) – a key measure of trust in a business.

Sector firms of course, have to deliver strong business performance, but there is a growing and understandable pressure from society to broaden the measurement of success, beyond profits alone.

The benefits of a high trust organisation are immense: highly trusted companies can maintain strong levels of employee morale reducing staff turnover, absenteeism and associated costs. Their brands can achieve high trust status with the consumer. Mars and Beaverbrook the Jewellers are two family firms speaking at the IFB conference on how they are achieving strong trust.

But family firms have their challenges, such as;

• Improving decision-making, both at the owner and the business level through more robust governance

• Ensuring that the transition of ownership between generations is planned and doesn’t disrupt the business

• Making sure there is no glass ceiling for employment opportunities for non-family employees and being open to ideas and innovation

What we see is that the best family firms are embracing these challenges while building and sustaining high trust organisations.