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How much you should spend on logo and branding?

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I do web design, logo design since 2009. I’ll never forget my very first client. I bought a text advertisement in a local advertising newspaper (it wasn’t really a real newspaper, it was a little 8-10 page stuff that contained adverts), and soon, got a call.

The guy was hesitating to tell me what would be the website about, and just told me about the needed features and asked for a quote. I told him the price next time we met, but he was still acting strange. He told me things like “I’ll tell you what the site is about and THEN you’ll tell me if you are okay with that”.

I had no idea what he meant, until he finally admitted that we are talking about an adult site. I remember sitting in his car, smiling, and told him that as long as we are not selling child organs or cocaine, I do my work and it’s okay.

The site was about girls. I did the coding and did the design and branding. I guess I’m kind of really talented in this, because I really had no studies or even knowledge from internet about how to do branding or web design, but I still remember the site, and I could easily put the work into my portfolio now, 10 years later.

Ever since that, I met and worked for a lot of clients (200+, never counted), and there are a few questions, dilemmas and misunderstandings that come up, regardless of the person’s education level, experience in his / her field or even personality

One of these subject is this: branding.

A lot of these people were clever, most of them were, and they realized that the way those successful companies do this, the ones with modern and good-looking logos is the way to go. They understand that professional branding is good for a business.

But being a highly sensitive person myself, I sensed that even though they kind of feel that professional branding matters, they didn’t really understand why it matters.

A lot of them seemed to think that a good logo is important, so they should spend relatively much money on it.

But, “should” is a word I don’t like. Should always means a kind of slave feeling, like you are forcing yourself to do something, but forcing yourself also creates rebel in an adult. We are really are own person and shouldn’t (oops) do things only because we should.

If you feel like this about branding, let me tell you a little fictional story and ask you to ask a few questions about it, so those “shoulds” go away and be replaced with clear intentions.

How much good branding is worth?

First problem is, that people tend to try to put this answer in the form of dollars. This only leads to more confusion. How much is a good logo worth? $10? $50? $100? $1000?

First of all, let’s make a distinction between what you pay for a logo vs. how much is it worth to you after you paid for it.

Don’t get me? Good. Read on.

Let’s say, you want to produce energy drinks.

I think energy drink business is a very good example of how big effect branding can have on sales. Please, don’t get me wrong, I don’t want to say that all energy drinks are the same. They are not. But I think there are big price and business success differences between brands here that produce almost the same quality.

Let’s say, at one take, you want to produce 10 000 cans. It costs $0.15 to produce a can. That means you spend $1500 on them. You decide to not spend on branding, and have your friend, etc.. create a logo for you.

You want to sell $0.99 each. What happens? The brand is not exciting, not connecting to people, your income is slow, if there is any.

Have you saved money on not spending on branding in this case?

It depends on whether you think about as a Math teacher, or as a businessman. Yes, pro branding would have cost you $1000 let’s say, so your initial startup cost would have been $2500 instead of $1500. But what if that professional logo and brand leads to more sales, and even makes you be able to sell the same can for $2?

Do the math now.

$2500 initial cost ($1500 for production, and $1000 one-time cost for brand design).

10 000 cans produced.

10 000 cans sold at $2, because of good branding.

You are at $20 000 income, minus $2500 initial cost = $17 500 profit.

How the cost of branding looks from this perspective?

You see, if you decide to not spend money or not spend the right amount of money on professional logo design, you may end up never knowing what you lose. Because the most insidious form of losing money is not making as much money you could.

Brand design is not a cost, it’s an investment.

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Szurdoki Gábor

Szurdoki Gábor

Founder of AmbitionStock.com

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