This post was updated in June 2022. It was initially written in 2015.
ROI (Return on Investment) is when the money you save or earn is greater than the cost.
For example, if you buy a new piece of software for your firm, and you can improve efficiency and reduce employee costs enough to 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. They are not made from physical materials that have inherent costs.
Something 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, McDonald’s, and Nike have built empires on products that are not unique because of their brand. Their brand is more than their logo, yet consumers demand that brand, which is heavily tied to the logo, create 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 a strong positive customer connection is precious.
The cost of lost business
You are probably a long way from being a Nike or Mcdonald’s, but your logo becomes a yardstick for small businesses to quickly measure your firm’s professionalism.
Your logo says a lot about your business. It’s an important 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?
We can start to calculate this by quantifying the projects 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 usually a non-rational feeling that someone follows when they decide 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 adjust their product and service lines every few months. We find that our clients are doing substantial website 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 excellent investment.
Like most investments, you amortize it over several years. When you look at the cost of a logo spread over ten years, it seems reasonable and a good investment.
Your logo is the foundation of your branding and marketing
Your logo is fundamental in supporting both your brand identity and your marketing initiatives. Your logo 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.
Your logo is a critical element that always connects your message to who you are as you do marketing. 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 on 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. I believe there is ROI, more honestly, but I’m not sure how you’d measure it.
You can assume that you’ve lost a certain percentage of possible clients with a poor logo. Secondly, you can think of the increased marketing costs 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 clients that by following the rise of large international brands, investing in a logo is a signal—both internally and outwardly—that you value design and design thinking. We have many success stories of how rebranding and web design have improved their company’s position in the marketplace with our clients. 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.