How much is a logo worth? What is its value? The answer varies from case-study to case-study so I can’t speak for every business owner. I can, however, speak about someone who is very, very, very close to me and her company (which for obvious reasons, I can’t name). Pretty well everyone on staff views their logo as hideous. Trouble is, it has been around for years (was designed by one of the founders’ kids as part of an in-house logo design contest) and no-one has the stones to change it. I’ve worked on some of the marketing and collateral material, and rather than the usual ‘make the logo bigger’ mantra, the direction usually involved making the logo smaller (while certainly refreshing, this was due to lack of confidence in the logo as opposed to anything clever). We hid it. We ghosted it. We screened it in the background. Sometimes, we didn’t use the logo at all. Sum result – the company has no consistent identity or brand. Pity. The company is in the community service field, sends out a bucket load of brochures and tri-folds, prints a ton of event T-shirts, banners and trinkets. The logo is on the side of the building and I’m sure that they lose a great deal of walk-in business because no-one is making a connection between the brochure they just received in the mail, and the big building that’s down the street. Everybody on staff knows this, but rather than change the logo (and risk offending someone ‘upstairs’) they trudge on, marketing services without a cohesive banner to market them under. Is their bottom line suffering? Placing a dollar figure on the loss would be impossible, but I’d argue yes, and I’m of the opinion that this outfit is in dire need of an effective logo. As are many companies in vary phases of start-up.
So what can you expect from developing a logo for your company. Will, for example, a good logo build a business? Capital ‘N’ No. If your business comes from word-of-mouth or referrals, I’d argue that you don’t even need a logo. A company name will suffice (or even your own name if you’re pushing the personal touch). It’s only when you’re trying to market/compete/promote your company against other folks would it really become an issue. If you ‘own’ a particular business sector, why bother with the expense, and hassle, of a logo work-up (unless you’re interested in ‘looking good’). If you don’t ‘own the sector’ you’ll need an arsenal of marketing ammo to grab the market attention, and in a few nano-seconds, communicate that you’re better, faster, cheaper (or whatever particular ‘hook’ you’re trying to promote). You need to stand out in a cluttered landscape and truth to tell, your company logo is but a part. How much of a part? Depends on what kind of marketing you’re trying to do. Sometimes, it’s critical. On many occasions, you won’t have the real estate to write a war-and-piece diatribe about your company – you’ll ONLY be able to use your logo and a few scraps of type. You’ll need something eye-catching, as well as at least a hint of what it is you do. Ask yourself honestly – does your current logo do that? If not, it should. A good logo can also lend ‘instant’ credibility to your organization PDQ – and can help any small business appear (on one level anyway) on the same playing field as the ‘big boys’. Will a great logo help salvage a bad business plan, eradicate poor customer service or poor pricing models? Of course not. But it certainly will help you give the impression that you’ve ‘arrived’. The rest is up to you. ‘Leading a horse to water’ and all that.
How much is this worth? Depends what we’re talking about. Recently. the design blogosphere has been grousing about the approx. $800k that organizers paid for the new 2012 Olympic Games logo. In all fairness, I suspect the now-squirming owners received a lot more than just a few vector versions of their logo for that hefty sum. Probably talking about a full brand work-up and integration plan (we’ve already seen animations, movies, pins, etc) as well as the primary (and I’d might be tempted to argue, misguided) focus-groups that are involved in a project of this size.
I’ve been involved with brand roll-outs of this scope (I worked on some of the brand implementation programs for the development of the new NorTel logo redesign in the mid-nineties, not as a designer of the logo itself, but some of the supplemental marketing material). The plan was to completely re-brand Northern Telecom to the hipper NorTel, complete with a spiffy new logo (arguably the first true ‘globe and swoosh’ logo of the internet era). The cost to NorTel was in the $600K range, but included all the design, and across-the-board implementation of the new brand (the style guide alone was over 400 pages) as well as all the support material, trinkets and marketing. The new design had to replace the old one at the same time, on every scrap of material while being kept under wraps till the very last minute. Early speculation on a brand makeover ran the risk of giving stockholders the ‘jitters’ so we had to sign NDAs (these agreements also forbade us from buying NorTel stock within a certain time frame, due to our inside knowledge). A re-brand can indicate either a company that’s in trouble (and fumbling around for an identity) or a company that’s ready to take it to a new level. The number crunchers with the spreadsheets had figured out that keeping the re-brand on the QT was a better strategy – the less time available for market speculation, the better. And true enough, when the swooshy new logo was unveiled, NorTel stock leapt dramatically (only to tank about a year later). Overnight, the company made millions – so the $600K they spent was a comparative pittance.
I guess my point is that when people read about $800k ‘logos’, they believe that the artwork, and only the artwork, cost that much. Far from it. But it’s why we get the ‘I could have designed a better logo for less‘ comments from people who don’t understand the ‘behind the scenes’ of something of this size. And at the risk of ticking off some of my designer friends, no, they couldn’t. Most small design studios and freelance designers couldn’t finance a massive roll-out of this nature (nor can their respective clients) – that’s why large campaigns are generally doled out to established agencies with the necessary budgets (and more importantly, huge lines of credit). So, when a small business owner pays $500, $1000 or even $2000 for a logo, they are NOT getting the same results (nor should they expect the same) as someone, in this context the London Olympic organizers, are getting. When companies like LogoWorks brazenly compare their $300 logo design packages to $80k brand implementations at Landor, they’re comparing apples with oranges while hoping clients are wowed by the magnificent price difference. They’re also marketing their services to business owners as an expense, and when viewed from that angle, their ‘cheaper is better’ is fine. I’d argue that a company logo is not an expense – but rather an investment in your company’s future – and approaching it in the same head-set as buying printer toner can be detrimental to the outcome. Relatively speaking, and over the course of your company’s lifetime, there will be few things that you’ll get as much mileage from than your logo, and the money that you plonk down for its development. It’s up to you to decide how much that logo investment is worth. If your projected sales for an at-home business are in the $10K per anum range, does it make sense to drop a few grand on a logo and brand work-up? Probably not. Are you aiming to drive those sales into the $100k range? Then the investment makes more sense. And so on. (you can also read our who needs a logo article for a more in-depth look).
It’s difficult to put an actual dollar figure on logo design value (as opposed to the expense of same) but I’d argue that it’s substantial. An effective logo is a way that you can tell potential customers your story, or more accurately, part of your story. Sometimes it’s the only method available.
Best to make it count.
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