Can You Measure The ROI of a Logo?

October 13, 2015 | Branding, Business, Logo design

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Can you measure the ROI of a logo?

ROI (Return On Investment) is the idea that something may cost money up front, but in the end you save or earn enough money to make up for the original investment and then some. When you struggle to determine what to buy, what to invest in or what to do themselves or skip altogether, the measuring ROI  becomes critical.

For example, if by investing in a new piece of software for your firm, you are able to reduce employee costs enough to quickly offset the cost of the software, then you would say it has a good return on investment.

Other investments may have poor ROI if their cost takes a very long time to recoup or if the investment is never regained.

Is it possible to measure and determine the ROI of a logo design?

Does a logo have monetary value?

On their own, logos have little value. Something really only has value if someone is willing to buy it. Since logos are unique to the business they represent, they are not valuable to anyone else.

But, it is not unusual for a company’s brand to have immense value. Brands like Coca-Cola, McDonalds and Nike have built empires on products that are not terribly unique because of their brand. Now clearly their brand is more than their logo, yet it is consumers demanding that brand, which is heavily tied to the logo, that creates the value.

So while no one would be interested in buying a logo separate from a business, a brand with a logo and brand identity that is highly recognizable and has strong positive customer connection is incredibly valuable.

The cost of lost business

You are probably a long way from being a Nike or McDonalds, but for small businesses and new businesses your logo becomes a yard stick to quickly measure how professional your firm is.

Your logo says a lot about your business. It’s a critical first impression. When you have a poorly designed logo (or no logo), it suggests that you do not take your business seriously. Sometimes it’s nearly subconscious, yet the effect is powerful.

Look around, can you find a top-tier company without a professionally designed logo?

One way is to think about it, is to factor the jobs you lost or the connections you lost because someone didn’t take you seriously. Unfortunately, you’ll probably never know.

It’s easy for someone who doesn’t believe a logo has value to brush this aside, yet remember it’s very easy for someone to put off working with you. It’s often an intangible feeling that someone follows when they make decision to work with you or pass along to the next option. In a similar way that people use first impressions to judge people, we use a logo to form a quick and powerful opinion of a business.

The value of longevity

These days, everything is changing so fast. Technology is changing rapidly and many firms find they are adjusting their product and service line every few months. We find that our clients are doing substantial web site redesigns every few years because of a combination of changes in their own business, technology changes and design trends.

By contrast, a well-designed logo should last years if not decades. Invest in it once and do it right and you may never have to redesign it. That’s an amazing investment.

Like most investments, you amortize it over several years. When you look at the cost of a logo spread over 10 years, it seems very reasonable, and a good investment.

Your logo is the foundation of your branding and marketing

Your logo is fundamental in that it supports both your brand identity and your marketing initiatives. It is your logo which will maintain a sense of identity for your firm across media (web, print, advertising, etc.) as well as when design styles change and marketing tactics run their course.

As you do marketing, your logo is a key element that always connects your message back to who you are. If you have a great ad, but no one can remember who’s behind it, it’s a waste. Also, if you are doing content marketing—such as writing articles and raising your profile in social media—people need to be reminded that all those great insights are coming from you.

It takes multiple touch points to build trust and make sales. Since we are visual beings, a well-designed logo helps build your credibility and memorability all at once.

Is there ROI on a logo design?

So the question remains: is there measurable ROI for a logo design?

I think there is. Well, more honestly, I think there is ROI, but I’m not sure how you’d measure it.

With a poor logo, you can assume that you’ve lost a certain percentage of possible clients. Secondly, you can think of the increased marketing costs involved when you are not tying it back to a visual that prospects remember. Maybe a memorable logo would reduce the number of times someone would have to see your firm’s name by 25%?

I also have found with my own clients, and by following the rise of large international brands, that investing in a logo is a signal—both internally and outwardly—that you value design and design thinking. With our own clients, we have many success stories of how rebranding and web design have improved their company’s position in the marketplace. In the news, you can find well-publicized stories of the power of design for companies such as Apple, who put design at their core. And recent statistics from the Design Management Institute show that design-driven companies outperform the S&P by 228% over ten years

It may be difficult to measure the ROI of investing in professional logo design, but that doesn’t mean it’s not real.

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