Branding a Family Legacy

Family businesses were front and center with the second annual Louisville Business First/UofL Family Business Awards. This event showcased the diverse range of multigenerational businesses in the Louisville metro area. The awards highlight the long-standing contributions family businesses make for not just the region but the world itself.

When we hear the phrase family business or family firms, the first thing that comes to mind is a mom-and-pop storefront. Perhaps, we imagine a local footprint to the company with a handful of employees. Its structure is informal and down-to-earth. There is a folksy quality to the term. It connotes handmade or artisan products. These are enterprises that supply a niche industry, ever fighting the advance of the corporate monoliths into their marketplace. While this narrative may be the brand identity for some family businesses, the reality is much more complex.

A recent article by UofL Family Business Center Director Isabel Botero, PhD, and independent researcher Shanan Litchfield-Moore examined consumer connections related to the phrase “family-owned business” (FOB). While the artisanal, small business perception is one aspect of a family business, you’d be hard-pressed to think of a car manufacturer, a media corporation, or a global superstore as a FOB. The reality is that Walmart, Comcast, and BMW are all classified as FOBs. In these instances, each company has a family that controls 50% of the voting shares for a privately held company or 32% share in a publicly-traded company. Additionally, family firms employ 60% of our workforce and account for 57% of US GDP.

Impact of Family Legacy

The decision for a company to identify their brand as an FOB often is dictated by the industry they are in and the audience they hope to target. That branding lies at the intersection of consumer expectation and a crowded marketplace. Botero’s study examined these perceptions and the possible impact on FOBs. On the one hand, consumers feel like FOBs are more attuned to their customers’ needs, have a stake in the local community, and offer high-quality products. At the same time, FOBs are tied to tradition and strong cultures but are lacking professionalism.

In this light, it’s easy to see why a company like BMW—with its luxury branding—would choose not to identify as an FOB. Tying world-class branding conflicts with a regionalized perception. Further, there isn’t much value in a “handmade” car. In contrast, Walmart has long built itself around the image of Sam Walton and a sense of traditional values. The mythmaking of a self-made man from Bentonville, Arkansas, appeals to the nostalgia of an American dream as well as a working-class customer base—even while aggressively competing against the very local businesses that consumers connect to FOBs.

Supporting a Brand

Ultimately, how we choose to vote with our dollar has as much to do with what we as consumers ultimately value and our attitude towards family firms. This year’s FBC award winners demonstrate the connections to their customers, community, and industry that have made their businesses among the finest of the region. These family firms go a long way to ensuring their success for the next generation.