One of the first questions I am often asked when approached by a potential client about designing a logo is “How much does a logo cost?” To answer their question, I first provide a consultation during which I determine the value that they intend to receive from their logo design for their company and what is required in order to provide a design that is suitable to achieve that value.

The case of Nike

How much did the Nike logo cost? In 1971, co-founder Phil Knight commissioned graphic design student Carolyn Davidson to create the iconic logo design for $35. How much is the Nike logo worth now? Billions.

The value of a logo doesn’t lie in the logo itself – it is in it’s association with the company’s brand. To illustrate this concept — consider what would happen if Nike never existed and someone designed that exact same Swoosh logo today and used it on a new line of shoes or bicycles, or tennis rackets? It’s the same great logo design, but no one has yet to hear about their company or products. In this scenario, the logo is currently worthless. What was the value of the logo design when it was first created by Carolyn Davidson in 1971? $35 – the exact amount that Knight was willing to pay Davidson for her time.

Here’s another angle — let’s say Nike decided to sell a line of their shoes without the Swoosh logo, their name, or any indication that the shoe was made by them. Same shoe design, same quality, same materials, the only difference is that there are no logos or names on them associated with Nike. Would that pair of shoes sell for the same amount as the pair with the brand identity?

So how much does a logo design cost? The answer lies in how much you intend it to be worth. And for it to hold value, it needs to be tied to a strategic and well-established brand. A brand is a close personal connection and trust that a consumer has with a company. How do you feel about Nike or Apple or Pepsi and what about them makes you want to spend your money on their products over other similar ones?

How small companies can develop a valuable brand

Nike was able to invest $35 on their logo design and through successful brand development and advertising, in particular their “Just Do It” campaigns, develop a multi-billion dollar brand. However, this strategy may not work for most companies – especially those that don’t have millions to invest in national advertising campaigns year after year. In order for a new company to quickly arrive at a brand that holds value, it is much more achievable and cost-effective when they start with a brand development process in order to create a strategy for aligning the company’s image and messaging with that of it’s target customer. Once a brand is aligned with a target customer, it is much more likely that the brand will be relatable to the customer and they are more likely to purchase their products or services.

An excellent example of brand identity development can be seen in a recent series on Youtube created by Blind, a California design studio. In the series, they document the process that they go through in order to arrive at a complete visual identity system for one of their clients, a small brewery in Rancho Cucamonga, California. It starts with truly getting to know the customer, their business goals, and their target audience. They then go through a process of defining a complete visual identity system around their new logo redesign. This process provides their client with not just a logo, but a strong identity that they can utilize to better market their business and develop greater brand loyalty with their customers. The ultimate goal being that their new, revitalized brand will help them to launch into a larger retail market and compete with other beer brands on a national level.

So, how much does a logo cost? First, ideally a logo should not exist on its own but should be utilized as a key component of a complete visual identity. So, let’s look at it instead as — how much does a visual identity cost? If a brand is intended to be a valuable asset for the company, is an essential component of their marketing strategy, and is needed to help them stand out among all the other brands in their category, then the cost of a logo and visual identity system should be directly proportional to the intended value of the brand. That is because the amount of effort and expertise on the part of the design agency is vastly greater when such high stakes are involved.

On a final note, also consider the fact that, over time a great deal of marketing collateral is created that utilizes your company’s logo and visual identity design. This may include business cards, brochures, flyers, signage, apparel, websites, email, videos, TV commercials, etc… Before making this investment into the development of the multitude of marketing collateral that is used by your company, it is essential that you develop a solid logo and visual identity system so that in a couple years from now you are not stuck having to recreate all those materials when you discover your current logo doesn’t work with your company’s brand or your visual identity system isn’t cohesive or relatable to your customers.

Logo and visual identity design is an investment that, if done correctly will pay off in the long run for your business. It will help your company to be more profitable by establishing a loyal customer base and also save money by establishing a set of cohesive guidelines that can be utilized for years as your business grows.