Family businesses perceived of greater value by customers
Washington, August 15: Promoting a company as one running a family business enhances its performance by positively influencing customers’ purchasing decisions, suggests new research.
This finding emerges from a survey of people leading 399 family businesses, which provided information regarding relationships among the extent to their efforts to promote their company’s family-based brand identity, the extent to which they aligned their business with the needs of the customer, and company growth and profitability.
The authors of the study—Dr. Justin B. Craig, Dr. Clay Dibrell, and Dr. Peter S. Davis—say that the survey showed that family businesses influence their target market purchase decisions by reminding them that there is a family behind the business, and not a faceless corporate entity.
They suggest that this finding is linked to a family business’ long-term strategic horizon, the high priority family businesses place on community involvement, and the reputational capital attributed to the family name, all of which translates to a perception of greater value to the customer.
“Our study offers practitioners several relevant insights into how a family business can elevate financial performance,” the authors note.
“Ultimately, as the backbone of most economies throughout the world, family businesses contribute to the economic and social fabric of their communities. Family businesses are proud of what they do, and what they contribute. It is our belief, which is supported by our findings, that they should communicate this pride to their customers, as we have shown it does produce competitive advantages,” they add.
The study has been published in the Journal of Small Business Management. (ANI)