'Family-Owned' or 'Family-Run'? New article published in Entrepreneur & Innovation Exchange

Family-owned businesses are often considered particularly trustworthy. Research suggests that the term “family-run” can convey a stronger message than “family-owned”—and that adding further references to tradition can sometimes even be counterproductive. Many companies actively communicate their family-oriented nature through statements such as “family-run” or “family-owned,” or emphasize their long tradition with messages like “Family-run since 1887” (Glenfiddich) or “Family-owned since 1622” (Heinz Glas). Behind these branding strategies for family businesses lies a simple assumption: the more reference is made to family and tradition, the more consumers trust the brand. And it seems obvious to expect this. But that is not necessarily the case.

The current study suggests that simply communicating that a company is family-run is not enough. Branding a family business does not automatically build trust. Rather, success depends on whether these signals evoke the right perceptions among consumers. The results show that communicating a company’s family-owned nature does not automatically build brand trust. Instead, consumers react with surprising sensitivity to subtle differences in word choice, and the effectiveness of family business branding depends on the perceptions these signals evoke.