With a memorable and powerful logo design being such an important part of a company's image, it should come as no surprise that occasionally big money is spent on new logos. The real questions are: "Is there any reason to use a professional logo designer at all?", and "How much is too much?"
To get an idea of the incredible prices some companies are paying for logo work, here are couple of examples:
- British Petroleum (BP to most people) uses a stylized sunflower logo for which they spent $4.6M.
- The London Olympic committee commissioned a new logo for the 2012 games. After a year of work and a price tag of $400,000, they received a logo that is nearly universally hated by Londoners, including the mayor.
The value of a powerful logo with effective company branding can be seen in the recent purchase of the checkmark logo purchased by Symantic from VeriSign for a staggering $1.28 B - yes, billion. Of course, when one considers that the checkmark in question has become the internet standard for a site being safe to conduct business with, the immense number of purchases being made online (estimated at $165.4B for 2010, and growing), and the fact that virtually every business selling things online pays a licensing fee for the checkmark logo, it puts things in perspective.
Why are Companies Paying Insane Amounts for Logo Design?
There are two reasons companies overpay for their logo - perception and middle men.
- Perception. For many customers in every industry, there is a perception that "you get what you pay for". While this is true to an extent, in every instance, there is a point of diminishing returns. A person can buy a car for $20,000. The same person can get a car for $40,000 that is faster, more reliable, and includes superior safety features. It is also possible to buy a car for $400,000, but there is no chance that it is 20X faster and safer than the basic model. A professionally designed logo is far more valuable and makes a far more effective statement than one made as cheaply as possible. Beyond a certainpoint though, and a company is paying for pure perception.
- Middle men. Large companies do not work with logo designers, business card printers, and advertising outlets. They work with ad firms who deal with the individual firms. These middle men know the budgets for the various projects and use as much as possible. Their fees are generally based on the entire budget of the ad campaign, so it is in their best interest for each portion of the advertising contract to cost as much as possible.
Why Use a Professional Logo Designer at All?
Every person on Earth with internet access can download a free graphics program and logo templates to create a logo. While it costs nothing but time in the short term, the lack of uniqueness and logo design experience can cost a fortune in the long term.
A logo should be unique. Every business seeking success wants a memorable image and if its logo does not stand out in a crowd, that is impossible. With the sheer number of people on the internet, it is a given that any free (or even really inexpensive) logo is already being used by several other businesses that do not know better.
In addition to its uniqueness, choosing the right logo requires experience in logo design. Logo design is a combination of art, technical skill, and market experience. The last is the most difficult to come by. A company in a certain industry could benefit from a minimalist design with clearly legible lettering, or even no lettering at all. A logo for a different industry may be better off with a more complicated, impressionistic design. Being able to tap into the marketing experience of a professional company to make these logo design decisions is extremely helpful.
How Much is too Much?
OK, it's been established that not choosing a professional logo design company results in a weak logo that does not stand out of the crowd in a positive way. Also, some companies are paying far too much for pure perceived value. How much should it cost? The simple answer is that it depends on the situation. The starting point for a company requiring a basic logo designed is probably around $200. If a full package is required, including business cards, stationary, etc., the price could be as much as a couple of thousand dollars. Beyond this though, and the only additional expense that could actually be a wise investment is market research to get feedback for the proposed logo designs from would be customers.