Love it or loathe it, social media is an inescapable reality loaded with potential for most family businesses, as Claire Adler reports
In 2008 Julie Deane was desperate to find a way to pay for her childrens’ private school fees. She came up with a retro-style, vivid-coloured leather school bag. Setting up the Cambridge Satchel Company with her mother Freda Thomas, she aimed her bags at local schoolchildren.
From the start, a network of prominent fashion bloggers championed the satchels and soon the buzz sent sales skyrocketing. In 2011, after being asked to collaborate with edgy fashion brand Comme des Garcons on a sell-out bag design, Cambridge Satchel’s weekly production increased from three homemade satchels to 1,500. Turnover soared from £15,000 to £8 million. Cambridge Satchel is currently featured on the Google Chrome “the web is what you make of it” series of adverts, which have previously included Justin Bieber and Lady Gaga.
“The Cambridge Satchel success story began outside the power corridors of fashion – they’re not based in London, Paris or New York. But social media is a low-cost way for companies to build direct channels of communication with their audience wherever they are,” says Imran Amed, the Harvard MBA who founded Business of Fashion, an online forum for fashion insiders in 2007 from his Notting Hill couch. Mr Amed has since been listed in GQ’s 100 Most Influential Men in Britain and appeared in Net-a-Porter’s Top 10 Global Blog Power List.
Today, family businesses are using social media not only to launch brands, but also to boost sales, strengthen client relationships, improve service and even stay in touch with each other.
This may simply be down to the next generation joining the firm. According to Jouni Salo, whose great-grandfather set up family shipping conglomerate Hollming: “We are more into new technological stuff – smartphones, LinkedIn, Facebook – and we can take this mindset and apply it to our family companies.”
Clients of JAM, a telephone-answering business, can tweet updates to JAM to change how they’d like their calls to be handled, allowing telephone operators to offer a more personal, up-to-the-minute service when answering clients’ calls.
A recent Harvard Business Review blogpost claimed social media and the power of online peer influence have changed marketing and public relations forever. Bill Lee of the Lee Consulting Group advises companies to “find and cultivate customer influencers, and give them something great to talk about”.
When family-owned insurance and mortgage brokers Park Hill Financial wanted to find prospective clients via Facebook, they called on social media experts EngageRight to create an incentivised mortgage app inviting visitors to become fans before seeing a video and gaining acccess to a free house-buying guide.
“Regular incentives lead to a stream of fans who become brand advocates. Once customers are engaged with video content, they’re 85 per cent more likely to make a purchasing decision,” says Daniel Levy, EngageRight’s managing director.
But not everyone is convinced. “Whether to use social media depends greatly on a brand’s positioning and target audience,” says founder and chief executive of Digital Luxury Group, David Sadigh, who points to Geneva-based family-owned watchmakers Patek Philippe as an example of a business that has shied away from social media.
Family businesses are using social media to launch brands, boost sales, strengthen client relationships, improve service and stay in touch
But Mr Sadigh acknowledges social media can help smaller family-owned businesses enter important new markets like China. He cites Weibo, China’s hybrid of Twitter and Facebook.
Over the Diamond Jubilee weekend, Harrods, owned by Qatar’s ruling royal family, flew in five Chinese celebrities, with a combined Weibo following of 39 million people, to launch the store’s Weibo page and android app in Chinese and English.
Meanwhile, sixth-generation family-owned Bond Street jewellers Boodles, nominated for the 2012 Walpole British Luxury Brand Award, recently hired a full-time staff member devoted to social media. “We’re quite a traditional company. Sometimes I think we’re doing well to be emailing,” quips James Amos, director of Boodles. “But we’re now fully committed to developing our social media strategy.”
Building family relationships
A Belgian company is using social media to build and maintain strong relationships within business families. Trusted Family’s chief executive Joachim Vandaele claims his company’s highly customised online offering brings the benefits of an “electronic Christmas lunch”.
Sceptics may furrow their brows at the metaphor, but Trusted Family’s clients comprise 60 business families around the world, with between five and several hundred members in each family.
“Twenty-five year olds born into high-net-worth business families have been building and maintaining relationships online since the age of 12. To be a future business leader you have to be exposed to social media – there is no escape and no alternative right now,” says Mr Vandaele.
Trusted Family was founded in 2007 by fifth-generation member of the Aliaxis Group, Edouard Thijssen and former investment banker Edouard Janssen, whose family owns chemicals company Solvay, after they met at a family business conference.
Helped by the internet security expert who founded Belgium’s first online bank, Trusted Family’s founders created an online platform with features, including surveys and digital voting to democratically gather opinions from all family members, even those who might feel isolated geographically or emotionally.
Family members can also share confidential business information, minutes of board meetings, make announcements, access updates about philanthropic initiatives and family art collections, share their thoughts on media articles and even run family competitions for the most original holiday snaps.
“Only 7 per cent of families see family dynamics as a risk to the long-term creation of family wealth. But in 60 per cent of cases, the family business breaks down because of lack of trust and communication,” says Edouard Thijssen, Trusted Family commercial director. “We help families communicate and preserve their intangible wealth – their human, spiritual and intellectual capital.”