REPUTATION OF FAMILY FIRMS FROM A CUSTOMER PERSPECTIVE

Abstract

ABSTRACT Family firms aim to build favorable reputation with their stakeholders. The identity of a family firm, which – to varying extents – is conditioned by the owner family, is the basis for the corporate image as perceived by external stakeholders and thus influences the firm's reputation. Favorable reputation, in turn, stimulates purchase decisions and fosters customer loyalty and retention. Based on an experimental survey, this article examines the impact of family ownership on reputation and customer loyalty. The findings indicate that family firms are rated higher in terms of customer orientation, social and environmental responsibility and other reputation factors. In addition, customers rather tend to recommend businesses known to be family-owned. Keywords reputation, image, family firm, customer-based reputation, customer loyalty