How much does a logo cost?
We get this question a lot. But it isn’t the right question to ask.
The real question is, how much does it cost to create and launch a brand?
A brand is more than its logo. There are brand standards that dictate how your brand is perceived by your audience from its messaging and brand voice traits to colors, fonts and imagery.
If you’re wondering what goes into making a recognizable brand, check out Episode 1 of the Growing a Fruitful Brand podcast then head to the blog and read about how these three Omaha businesses use the elements of brand identity.
There are three things to consider when launching a brand:
What is the brand you’re trying to build worth?
The size of the organization determines the size of the investment. There is no one-size-fits-all when it comes to branding.Speaking of investment: think of your brand as an asset rather than an expense.
Your brand isn’t disposable like a billboard or facebook ad., you should expect to adapt and change as the brand grows.Finally, how do you differentiate your brand from other brands?
Differentiation is profit. Having the ability to do things differently than your competitors and deliver a higher perceived value to your customer shapes the customer’s experience with your brand.
Join Raj and Ben on episode 5 of the Growing a Fruitful Brand podcast where they explore how to raise the perceived value of your brand and what to consider when determining how much it costs to launch a brand. (Not sure if you’re ready for a rebrand? Download our free e-book, 10 Signs You’re Ready For a New Brand.)
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Ep.5: How Much Does a Logo Cost?
Automated Transcript
Raj Lulla:
How much would a woodchuck chuck if a woodchuck could make brands?
Ben Lueders:
There it is. There's our opening quote. All right, here we go. Welcome to Growing a Fruitful Brand where we discuss how to create and grow a brand that makes the world a better place for you, your customers, and your employees. I'm Ben Lueders, founder and art director of Fruitful Design and Strategy. I'm joined by my business partner and brand strategist, Raj Lulla. And today, how much does a logo cost? We get this question all the time. Everybody wants to know, Raj, how much should a logo cost?
Raj Lulla:
The thing is, there's not really a good answer to that question, because you can go online to Fiver or 99 Design somewhere like that and buy a logo that's probably made of stock elements, that kind of thing.
Ben Lueders:
Yeah, please don't do that.
Raj Lulla:
A little clip-arty for about 99 bucks. Or if you are Apple or Nike or Google or whoever, and you're launching a new product that needs a logo that is going to be all over the place, it could be several million. And so when people ask us that question, we know what it costs for us to deliver, but we also know that it's the wrong question.
We've done some great logos- we just got done with Miller Public Schools Foundation, they had a logo for their afterschool program, called Spark, and for Access Period, a great non-profit that we just worked with, a beautiful logo that we created for these people. If they took that and then paired it with a million different fonts and they made it in a different color every time, they didn't have any standards to what they were doing, and they also didn't have any messaging for what was going to go with that logo if they just said, Oh, I need a logo. I put it out in the world and people are going to come to do business with me.
It's the wrong question. What they really should be talking more about is, how much does it cost to launch a brand? How much does it cost to create a brand? And so that's really the question that we're going to dive into today because it's different from just that. Yes, you can Google how much a logo costs, and you're going to get wildly varying answers, and none of them may be right for your particular situation. Because the better question is, again, how much does it cost to launch a brand? And there are a few things that we need to consider before we get into that.
The first one of those things is what is it worth? What is the brand that you're trying to build, worth? So Ben, let's talk about that a little bit. When you think about that, what things come to mind for how you determine what that brand is going to be worth?
Ben Lueders:
It all comes down to size. What if a Little League reaches out for a rebrand?
Raj Lulla:
Like a whole league or just a team?
Ben Lueders:
Just a Little League team. And then what if a multi-million dollar company requires-
Raj Lulla:
Or even multi-billion dollar.
Ben Lueders:
Would you expect that the worth of the brand of the individual Little League team would be worth the same as the billion-dollar industry?
Raj Lulla:
No. I mean, I wouldn't, partly because the Little League team has far fewer resources, but is that all that matters? Just like, Oh, this company's got a lot of money, so they get charged a lot more? Is that how it works?
Ben Lueders:
That's right. We just have the sliding scale like, Oh, you, you've got a lot of money, we'll charge you more. Well, no, really it comes down to, think about with a Little League team, for example, they might need their logo on their jerseys, maybe a little one-page website with the schedule on it or something like that. And that could be it. The implementation of that brand is very limited and as it should be, there's no reason to make that more complex than it needs to be.
However, when you work with a multi-million, multi-billion dollar company, the ways in which that brand has to be implemented can be really, varied and robust. And we've dealt with that as we've worked on brands for bigger companies. It's crazy how many places the colors and the fonts and the logos need to be represented or the messaging. I mean, it just gets so, so, so big and so it makes sense that it would really vary on the size of the entity.
Raj Lulla:
Well, even the process is different, because the Little League team most likely doesn't have a board that has to approve things. They probably don't have legal counsel running it through trademark, because for them, if they got sued because they looked too close to a professional sports team, then they would just immediately throw all those jerseys in the trash. They would get a new logo and start over again because the loss there would probably be maybe a thousand dollars. And sure that stinks, but it's way better than a multimillion lawsuit for infringement. So they'll just give in instantly.
Whereas a large brand, what they're going to do is they're going to run everything through legal, they're going to trademark it, and they're going to protect that brand from day one. And in order to do that, there's just a lot more complexity. You have to have maybe multiple rounds of sketches and drawings and multiple rounds of messaging. Even that has to go through the lawyers a lot of times. And so something that very easily could take a couple of weeks with a Little League team, could take, I mean, I know of a brand that is working with a firm for two years right now. And that's not typical for us, but depending on how many layers of approvals, of regulation, all those things that come with just a larger environment, it changes what it's worth to that brand.
But on the other side too, a Little League team maybe has to sell a bunch of hot dogs or tickets, if they even sell tickets to a Little League game.
Ben Lueders:
How does that work?
Raj Lulla:
And they'll recoup their costs really quickly. It's kind of the same thing for a multi-billion dollar brand. How many cans of Pepsi does Pepsi need to sell in order to recoup a million-dollar investment on creating a new brand? I mean, probably about a million cans of Pepsi. So, how many games, how many football games, how many grocery store shelf displays do they need to create in order to sell that many cans? Probably not that many. They could probably recoup that cost pretty quickly. So what it costs to launch a brand is relative to complexity, and it's also relative to the return that you expect to make on it pretty quickly.
In general, we like to use a rule that's the 1 to 10 rule. Now that's more for marketing, but we tend to think of it that way. If you're a million-dollar business, you should probably be spending about $100,000 to launch a new brand. Now, that might be a little bit extreme. We actually prefer to go anywhere between the 10 and 20 X value on a brand, so maybe even up to a couple of million dollars, or even $3- or $4 million, if you're really efficient about the way that you market. And if your word of mouth is good, your referrals are good, and your net promoter score is good, then you can get that investment to go much farther.
But if you're a multimillion-dollar brand and you are launching a new product, then you should expect to spend $50,000 to $100,000 maybe more on launching a new product, because of what you expect to get returned on it. If you're just the Little League team where you create a logo and it only just shows up basically on jerseys and a small website, you're not expecting thousands or hundreds of thousands of people to see this website, buy tickets to support your team, and you're going up somewhere. A brand, on the other hand, a multimillion-dollar brand launching a product, they do want that, and so they're going to have to advertise that in different ways. You're going to need a logo that's responsive across a variety of formats and it's going to be used in ways that recoup that cost and exceed the break even on the cost, so that makes a really good return for you. That's a reason why, and this is the second thing here, think of a brand as an asset.
Ben Lueders:
Yeah, I mean, the way that I like to think about it is, your brand is a little bit more like an office building than a Facebook ad.
Raj Lulla:
Okay, What does that mean?
Ben Lueders:
Well, think about it this way. A Facebook ad is something that it kind of comes, it goes, you try it, if it works, then you maybe keep going with it. But an office building is something that you don't just change overnight. It's something that you need to live in and you may eventually change or upgrade or expand, but it's something you're willing to invest in a little bit more long term.
Raj Lulla:
And how long should people expect their brand to last?
Ben Lueders:
Yeah, the rule of thumb is about seven years.
Raj Lulla:
So kind of like an office building as your company grows and you maybe remodel an office space in a commercial building and you want to buy one that your team has room to grow and all that. But after 5, 6, or 7 years, maybe you've maxed out on office space. You've had to hire people remotely, because you don't even have any more office space. We know other founders who have that problem, and then they go, Okay, now it's time to get that new office built.
It's a decision that you don't make lightly. Unlike a Facebook ad or really any other marketing expense, a flyer, a billboard, or anything. It's like you can tear that down overnight and it's fairly consumable, fairly disposable. A brand, on the other hand, is an asset, like an office building, where you're not going to make a lot of changes until you hit that maybe seven-ish year mark. And there are other brands, Coca-Cola is a great example, for a hundred years, it has been kind of evergreen. And so it could actually last a really, really long time.
Ben Lueders:
I'd like to push that analogy even a little bit further. When you think about office space, one thing about it, is it's not something you're going to switch out overnight, but it’s not static, you do improve upon it over time. You may not have the budget necessary to fully furnish all the rooms on day one, but you work on it over time. Maybe do little remodels.
And I think of a brand as the same way. You may not get a full logo redesign every three months, but maybe you'll change a tagline, or you might switch out a cover photo on a page. It is a living, breathing organism, and it's not a static entity. And so I think, thinking of it that way, that it is something that is alive and changing and adapting, but maybe not a full “let's burn down the building and start over again overnight.”
Raj Lulla:
How has a brand like Coke done that? Because it seems like their logos have more or less been the same over the years, but I'll bet if we looked at their logo from a hundred years ago, it wouldn't look exactly like what we see today. So what's different today than when they maybe launched early on?
Ben Lueders:
Coke's a great example, because it's so well documented and it is so long, and you can do that. You can go on Google and you can look at the different images. The Coca-Cola logo as we know it today looks fairly similar, but there have been subtle changes over the years. And of course, the brand is not limited to just the logo itself. One of the things that's changed and grown and proves that it's a living, breathing organism, is all the things that have changed around it. The specific color of red, the different taglines they've used throughout the years. Now the little Coke bottle has become like the little mini logo they use that I think, on the mobile version of their website and stuff. But that shape of the Coke bottle is so recognizable that it can be a stand-in for the really flourishy, detailed Coca-Cola logo itself.
So, Coca-Cola and a lot of those older companies that have stood the test of time, you can literally just look through the layers of sediment and see, they have made little subtle changes in their messaging, in their imagery choice, in so many different things through the years, and yet it's still Coca-Cola. You can see a Coke ad from the 60s or 70s and it's different, and yet in some ways it's still the same.
Raj Lulla:
And that's a little bit funny too, because they use that Coke bottle as one of their smaller logos. We've talked, I think, before about how in today's day and age, you need a responsive logo, one that shrinks down. It used to be that it's going to be wrapped around a bottle, and it might be on a billboard or eventually television commercial, but you have all these wide applications. Now, you have these very narrow phone screens that people need. And if you shrunk that script down it wouldn't look very good.
Ben Lueders:
That's an interesting design problem. I mean, I thought about that .. If you look at the Coca-Cola logo, as recognizable as it is, it's not a very simple design. It's actually incredibly complex. And how do you reduce that down and still be recognizable? And I thought it was really interesting.
Raj Lulla:
Now, the thing that's really ironic about that, where I was going, is that the shape of the bottle is not actually the most common way to consume Coca-Cola these days, the glass bottle. Sure, they sell them, but it's almost more of a novelty item now, but it's usually plastic or aluminum or even a fountain drink, a way more common way to consume it. But because the brand has evolved over the years, and the glass bottle was such an iconic part of its history, it became part of the brand. I would argue that Santa Claus and the Polar Bears-
Ben Lueders:
I was going to say it's not a polar bear, that's not their responsive logo.
Raj Lulla:
But they have also become part of the brand, especially their holiday time branding over the years. So they have added to their asset portfolio with all of these different things. You could see that Coca-Cola bear drawn exactly the way they draw it with a red scarf on a billboard in Times Square with no logo on it, and you know that it's a Coke ad. If it just said Happy Holidays underneath, you would still know that this is “Happy Holidays from Coca-Cola.”
Ben Lueders:
Isn't branding cool? I mean, this is why we're into this stuff. So cool.
Raj Lulla:
This is why it's an asset, because, unlike a disposable social media ad that, at most, is good for a few months, and then you get what's called audience fatigue on that. That's an actual term in the industry, is that the audience gets tired of seeing that specific ad, because you target the same people roughly, enough of those people have seen it enough times, they just roll their eyes and move on while they're scrolling. But most of us don't have that reaction to the Coca-Cola Bear or the glass bottle. Instead, we have some nostalgia around it, we have an affinity for it. Or if you hate Christmas and that's your deal, that's fine. You may roll your eyes at it, but it's part of their brand portfolio. And there are companies actually like Toys R Us that it's kind of the big deal this holiday season that it's coming back in mini formats in Macy's, in department stores. But what really happened behind all of that is some private equity group or capital group just bought more or less the Toys R Us logo-
Ben Lueders:
For its nostalgia basically.
Raj Lulla:
The brand and the giraffe and all that stuff, and then they pieced all of the rest of it out. You probably have these stores in your town that have a faded old logo where Toys R US words used to be, and maybe the stripes across the building. So all of those things got parted out, the real estate got sold off, but the brand remained a valuable asset. And so that's why we don't think of it as a marketing expense. You shouldn't, it's almost impossible, I would argue, to put it in your yearly marketing budget. What are you going to do? One-seventh of a logo so that you can roll that over from year to year? A lot of our clients actually reach into capital expenditures, into Cap X to pay for a rebrand, because it's that much more similar to buying a piece of property or creating a piece of R&D, than it is to a marketing expense.
Ben Lueders:
So Raj, we're already kind of touching on it a little bit here, but the brands we're talking about, they're practicing differentiation. What is that doing for these companies?
Raj Lulla:
Differentiation is profit. That's how companies make more money. And here's a great example of that. Tab cola is not known for its Christmas branding and being synonymous with the holidays, and I'll bet that they do a lot less revenue over the Christmas season, over the holiday season than Coca-Cola does. Sure, Coca-Cola started out with quite a bit of an advantage there. But you can only do so much to cost. So like a product costs something, or service costs something, sure you can automate a few things, you can outsource and you can drive that cost down a little bit, but you're talking about percentage points probably unless there's a major innovation in your industry of how to deliver this product faster. And by the way, if that's happening, it's probably actually disrupting you, because those types of innovations usually happen when people see the way that you're doing business and they try to undercut you. So it's unlikely for a company to find major, major gains in just lowering the cost of how they deliver things.
On the other hand, though, you can raise the value of what customers think about your product, the perceived value of your product. And so the difference between what it cost to deliver your product and the perceived value of your product, that's profit right there. The labor, the expenses, the materials, all that kind of stuff, are down here in cost. And then up here, if you can push that value, the perceived value, up through your brand, through your marketing, then people will buy it and you will have more profit in between those two things. Scott Galloway talks about this from the Pivot podcast, and then Harvard Business Review talks about this. They all have kind of the same formula, which is your cost is here, push that down if you can, and then your perceived value is up here, push that up if you can.
And if you go get it to go both directions, great. But again, there's a floor to your cost. At the end of the day, employees are going to cost something, at the end of the day. Office space and warehousing and logistics are all going to cost something, even if you replaced truck drivers with robots or with automated vehicles, sure, again, that does decrease cost. But then after a while, the robot trucks are going to start to cost more. The automated trucks are going to start to cost more. And there's only so much you can do until you can literally get Coca-Cola to materialize in somebody's office space just by thinking about it. When you get to that point, then yeah, maybe you have hit the true floor of cost. But in the meantime, raising the value of your brand, the perceived value of your brand, is how you can create more profit for your business.
Ben Lueders:
Okay. That's easy to say, and I think that that concept makes sense, but how do we do that? How do we raise the perceived value of a brand?
Raj Lulla:
Yeah. What does an oil change cost?
Ben Lueders:
It depends on where you go.
Raj Lulla:
Okay. So that's a great question. Why does an oil change, which probably theoretically has about the same processes, about the same cost of materials, even if you factor for low-grade oil versus premium grade, whatever is even different about those things, but generally about the same cost, about the same labor. Why does it cost $20 at Jiffy Lube and a hundred dollars at the dealership?
A lot of that is actually about brand. It's about experience, because the fact is that an oil change could actually cost you basically $0 if you already had oil at home and you watched the YouTube video and decided to learn how to change the oil in your own car, or you watched your dad-
Ben Lueders:
Yeah, my brother-in-law does this.
Raj Lulla:
The fact is though, that an oil change then can range from basically $0 to all the way to $100, and the perceived value of that is down to branding and customer experience. So let's break that down.
So why would I not want the thing that's free? Well, because first of all, I don't know how to do it. It's going to require probably 30 minutes of me watching a YouTube video-
Ben Lueders:
If not more.
Raj Lulla:
Several times for me personally. There might be specialized tools that I don't have, so that includes a trip to the hardware store. Sure, I'd recoup the cost of those tools over maybe two or three oil changes. Now it's a trip to the automotive store and a cost out the door. I'm going to try it. I'm going to probably have forgotten something at the hardware store. I don't just happen to have bottles of oil in my garage right now, at least none other than the emergency kit one. And so I don't have that. I might also notice, oh, I should change the washer fluid while I'm in here and might get into a few other things. And so just like any home project, any DIY, you probably have several trips to the store. I've probably now committed multiple hours to this. And even if I valued my time at $15 an hour, which hopefully it will do better than that, but-
Ben Lueders:
I think you're worth more than that Raj, personally.
Raj Lulla:
Even if I valued my time at $15 an hour, now I'm at least $60 in plus the cost of tools, plus the cost of materials, and it's like, I don't think I'm really in for that. So then I can look at Jiffy Lube and go, Wow, 20 bucks, that looks like a great value, but why would I do that? Or why would I go to the dealership for a hundred dollars instead of just going to Jiffy Lube for $20?
Well, no offense at Jiffy Lube or any of the other quick oil change places, but a lot of times the waiting room isn't super clean. It smells like tires in some of those places. Not Jiffy Lube, but in some of your local tire shops that also do oil changes, it smells like tires. They've got that play set for kids that does not look like it's been wiped down in about a thousand years, maybe has the bubonic plague on it. I don't know. They have the loud old-school CRT television in there, that's blaring some kind of news channel or horrible home remodeling show or something that you can't turn down. It's like behind a plexiglass case or something that somebody's graffitied. Why don't I want to go there?
Ben Lueders:
This is very specific by the way.
Raj Lulla:
I don't want to spend any of my time in a place like that if I can avoid it, but is it worth a hundred dollars at the dealership? Well, does the dealership offer a courtesy car to take me back to work so I can actually do it? Actually during the pandemic, the dealership picked up my car from my house, took it to the dealership, and brought it back to me. That alone, even just valuing my time at $15 an hour, which again, hopefully more, but just valuing my time at $15 an hour, not spending half an hour on the car on the way there, half an hour back, that's 15 bucks I made back in the deal. But we all know that drive time doesn't actually just cost the time that you're actually in the car. So give it half hour before, a half hour after. Now I'm 30 bucks up in that deal. So between a hundred dollars and $20, I've already eliminated a decent portion of that. We're down now essentially to $70 difference in cost, or not difference, but $70 in cost, which is only $50 difference between the two.
And you gave me a courtesy car to my office, or let me work from home during that time. Well now I can make $15 during that hour too. So now we're down from 70 to 55 and the difference between 20 and 55 now, plus whatever the value of being in the comfort of my own home or being productive in my office, all those things. It's pretty quick to make up that difference if I have that cash available to me.
And so the dealership with not very much more expense on their end, a courtesy car that they've got driving all around the city anyway, for all of their other automotive appointments, some of which are much more expensive. So minimal cost there for the driver and the car that they already own, and the same labor, and same oil change materials. They're making $80 more on that. So they kept the cost probably about the same, maybe even a little bit higher, but they raised the perceived value dramatically. And by the way, I can also, if I go to the dealership, wait in their nice waiting room with free wifi and look at my next dream car while I'm there, which is not the worst way to spend an hour. That's how differentiation can create profit. And that's just one small example. That's a really, really small example.
When you're talking about a product or a service where you learn how to do things in a way that your competitors don't know how to do things, or you just even have a process that's better and faster, that delivers more value, then you can be talking in 10 X, 100 X times, 1000 X times, what your competitors can charge, because of the expertise you developed. That's how differentiation creates profit for companies.
Ben Lueders:
So Raj, we started this episode with the question, how much should a logo cost? Which obviously can vary greatly. And so the better question is, how much should a brand cost? And that really depends on what it's worth, viewing your brand as an asset, and determining how differentiation can make your brand more profitable. So Raj, what should we do with this information?
Raj Lulla:
So we created a free ebook called 10 Signs You're Ready for a New Brand. And we provided this to our audience, anybody who comes to our website, because it can be tough to know if you're ready in the scope of your project, or launching a new product, or if you're thinking about starting that dream company, whatever might be happening with people. So 10 easy ways to identify that you're ready for a new brand and that's all going to be in this ebook that we wrote for you. So, there'll be a link in the show notes, or also on our website where you can go and download that ebook for free.
Ben Lueders:
Thanks so much for listening today. As always, make sure to share this episode with someone you think might benefit from it. Make sure you subscribe, you follow us anywhere that you listen to podcasts, and let's grow something good together.
