THE VALUE OF A LOGO

THE VALUE OF A LOGO

How much should a logo cost?

Well, isn’t that another $64,000 question – what is a logo worth? Is it worth hundreds, or thousands of dollars? Can we even put a dollar value on something that will represent your company for (hopefully) its lifetime? That all depends on whether you approach the branding of your company
as an expense, or an investment in the future of your company. If you view your logo as a simple expense – in the same category as say, FAX paper, you probably won’t view it as being worth very much. Using the time-tested philosophy of ‘you get what you pay for’, and if your logo is simply a pretty picture that you want to slap on a few printed papers and the right-hand corner of your 3 page website, then you might be well enough served by shopping for your new logo design based on sticker price. Get it cheap. Get‘er done.

If, on the other hand, you view your logo as an investment in the overall picture of your company, a flag around which you, staff and customers can rally, then your logo is going to be worth a lot more. And worthy of the extra time, and expense, involved in doing it up right. That’s not to say you have to break the bank to get a great logo – you don’t – and it’s up to you to decide how much you pay for your visual identity.

The value of a good logo.

What is a logo’s 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 close to me and her company. Pretty well everyone on-staff views their logo as a bad logo. It’s been around for years (it was designed by one of the founders’ children as part of a series of ‘expense saving’ in-house logo design contests) and no-one has the courage to even suggest changing it. In the development of marketing and advertising materials, rather than the usual ‘make the logo bigger’mantra, the directions usually involve making
the logo smaller (while certainly refreshing, this was due to lack of confidence in the logo as opposed to anything clever). The logo has been hidden. Ghosted. Screened to almost invisible levels in the background. Sometimes, the logo wasn’t used at all (this became so prevalent that a recent management directive makes it an official company policy to use the logo in its un-tampered version). Sum result – the company has no

consistent identity or brand. Which is a 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 early phases of start-up. In terms of the value of a logo, perhaps we should take a look at what you can, or should, expect from your new corporate identity.

Will a logo make or break your company?

So what can you expect from developing a logo for your company? Will, for example, a good logo build a business? No. If your business comes from word-of-mouth or referrals, I’d argue that you don’t even need a logo. A new 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 and 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 custom logo work-up (unless you’re interested in ‘looking good’)? If, on the other hand, 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 eyecatching, 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 pretty quickly – and can help any small business appear (on one level anyway) on the same playing field as the ‘big boys’. Will a good 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.

The $800,000 logo. More than meets the eye.

How much is all of this branding goodness worth? Depends what we’re talking about. A few years back, the design and business communities were grousing about the approx. $800k that organizers paid for the new 2012 London 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. We’re probably talking about a full brand work-up and integration plan (we’ve 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. Over my design career 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 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 new logo (arguably the first true ‘globe and swoosh’ logo of the internet era) and an officially abbreviated name. 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 new logo and name were 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.

Money spent vs. money back.

I guess my point is that when people read about $800k logos. or $10k logosc or even $5k 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 business 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 design companies brazenly compare their $150 logo design packages to $80k brand implementations at Landor, they’re comparing apples with oranges while hoping clients are wooed by the magnificent (and quite ludicrous) price difference. They’re also marketing their services to business owners as an expense, and when viewed from that angle, thei  ‘cheaper is better’ is fine. I’d argue that a corporate logo is not an expense – but 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 spend initially for its development. It’s up to you to decide how much that investment is worth. If your projected sales for an athome business are in the $10K per annum 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 or higher range? Then the investment makes more sense. And so on.

The logo sticker price.

It’s difficult to put an actual dollar figure on the value of a logo (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. And while it’s true that you can always rustle up some cheap design work by doing-it-yourself, hiring some student, or opting for some discount logo design service you’ve found on the internet, it’s probably wise to think long and hard before doing so. There’s an old adage that goes
something like “you get what you pay for.” No reason to believe that doesn’t include logo design.

Setting a logo design budget.

So how much should you pay for a logo? That all depends on your expectations. If you simply want a pretty picture, you’re looking at a couple of hundred dollars. This type of project involves the client acting as an art director and in some aspects, the defacto designer of the logo itself. It takes the designer out of the creative side of the process and reduces them to a pair of hands, a Mac and a copy of Adobe Illustrator for rent. Pragmatically speaking, following a client’s ‘move this and add this’ instructions are the ‘path of least resistance’ – revisions and original concepts are murder on a
time clock – and can ultimately lead to less time spent on any particular design project. Hence the lower price tag. It’s not even that such a method renders developing a decent logo impossible. If we were to put odds to the equation, I’d put chances of developing a decent logo at about fifty/fifty.

But does it represent design value? Maybe not. This ‘get ‘er out the door’ methodology buys into the premise that creating a logo is simply moving pixels and vectors around a monitor, trying to create a pretty picture that a client ‘likes’, will approve and ultimately pay for. If, on the other hand, you
want to work ‘with’ a designer (a very large distinction), and you’re open to exploring their ideas and concepts – even those that are a little ‘off the reservation’ – you may be able to develop a killer logo and something out of the ordinary. This process is a little more involved and more time, and monetary investment is required. More research about the your company.

An overview of related branding efforts. An understanding of the people that the logo is supposed to resonate with. Bit of a hassle I know, but the extra time spent can present a designer with all sorts of information, ideas and direction that will aid them in creating a unique piece of visual real estate. It can be a teeth-grinding, hair-pulling back-and-forth, but at the end of the day, aren’t you hiring someone to DESIGN your logo – and with all that entails – not just produce pretty little pictures with your company name slapped on it?