Part 8: The Price of Logo Design
In the 15+ years I’ve been in the graphic design field there is one phrase I have heard more often than any other, and that is “I have a neighbor who do to that for $50!” With all due respect to all those neighbors out there (and those who feel that $50 is an acceptable amount to pay for a logo), here are a few considerations to keep in mind when pricing and paying for a logo.
Agency vs. Freelancer
Matt’s Rule of Graphic Design #42: ‘A good designer can be effective without wearing shoes, but not without wearing socks (this is one of those deep, philosophical statements).’
There is a choice to be made with regards to whom you decide to develop your logo. Both have positives and negatives. The issue for you to decide is what factors are an issue for you and which ones are not. Here is a breakdown for some of both:
- Agencies tend to have higher-quality designers
- Agencies are often more diligent about meeting deadlines
- Agencies carry a clout (bragging rights)
- Agencies typically have a wide-range of experience to draw from
- Agencies are more established; more entrenched in the community – they have a reputation to maintain
- Agencies can be very selective about who they take on as a client
- Agencies might not provide as personal a service as a freelancer
- Agencies are more expensive
- Agencies have payroll to consider and therefore are a bit more rigid with regards to office hours
- Agencies don’t always value the low dollar account as much as the big spenders; your work might get bumped should a large account comes calling.
- Freelancers are often cheaper than agencies
- Freelancers have fewer customers so are able to provide more personal service
- Freelancers need your account more than agencies, so they are more accommodating to small requests
- Freelancers have more flexibility with regards to working hours
- Freelancers (the good ones at least) take a personal investment in your business, product or service
- Anyone can freelance; the choice to freelance is sometimes (but not always) due to a lack of options, not a choice
- Freelancers are not always of the same caliber of designer as those employed by agencies
- Freelancers do not always have the wide-range of experience available at agencies
- Freelancers can leave or go out of business at any time; with an agency such a move is seldom without warning
- Freelancers are their own boss; they might not be as diligent regarding deadlines/availability
The ‘neighbor’ factor
Matt’s Rule of Design #36: ‘Just because you have a computer and a program does not automatically mean that you are a graphic designer.‘
When you are talking about the neighbor who can build you a $50 logo, you are likely talking about someone who dabbles in graphic design, but doesn’t do it professionally. No self-respecting, professional designer would ever charge so little for a logo — especially in light of everything that is invested into logo development (research and design time). I see it all the time, when a business owner brings in a neighbor-designer logo (also applicable are logos designed by your kid, your neighbor’s kid, or the ever-popular ‘I know a guy who knows a guy’) only to find out that it can’t be used for the purpose he intends, or that it cost too much to reproduce.
Bargain shopping for a logo is never a good idea, primarily because the odds of you getting a logo that is A) well designed, B) represents your company in the manner you desire, C) is built using the proper programs and D) will reproduce effectively across an array of media – are against you. Your brand is the single most important asset to your company, you don’t want to skimp or cut corners when it comes to your brand. An investment here reaps dividends down the line – dividends which far outweigh any one-time expense.
I’m sure this all sounds like I’m buttering you up for some big payday; quite the contrary. What I am doing it to help define some general considerations that would establish an acceptable range for professional logo development of a small business (a small business in this case being $5,000,000 or less in annual revenues, 50 or fewer employees, local or limited regional reach, etc.). Mid- to large-sized businesses can expect to pay four- to -seven figures for their logo development.
Time in Development
Matt’s Rule of Graphic Design #4. ‘Always build in a little extra safety time when determining project deadlines; just in case something goes wrong or breaks.’
The thing about logo development is that it’s a very time-consuming process. To do it right and generate enough distinctive and unique logos for a client requires a hefty amount of research, brainstorming, client meetings and design time. Logo development is not an overnight process.
One of the big keys to logo development is diversity. Though you may have a good idea of what the client is looking for, you don’t know how those ideas and concepts are going to take form. You have to present the customer with options, allow him to consider the merits of each and then, if necessary revise, adapt and sometimes (though I never recommend it), merge elements of different logo concepts into one.
Whenever I develop a logo package, my standard approach is to develop around 8-10 concepts for client review. Fewer choices doesn’t provide enough variety and more choice simply gives too many options and you’ll find the client liking none of them – more as a result of being intimidated by the number of choices available and then they are unable to reach a consensus (especially if there is more than one decision maker involved).
When you take just the research and design components of logo development, I’ve found that it takes on average about four hours to design each logo concept. Extrapolate that further, any 10 logo concepts equals about 40 hours of hands-on work. That’s just for the first draft developments; it doesn’t count for client meetings, revisions, and final file prep and logo brand usage (LBU) guide.
So what’s the timeframe for logo development? How soon from the bid acceptance will it take to see the first round of concepts? I would say a minimum two weeks (unless the designer or agency has nothing else on their plate). Two weeks isn’t an unacceptably long time to wait – especially when you consider that the initial development takes roughly 40 working yours; that’s five full business days of doing nothing else. As mentioned in Part 6: The Zen of Logo Design, it’s important to step back and walk away from the logo development process to gain clarity and perspective. Additionally, if you work for an agency, there are likely internal review processes in place before the concepts are presented to the client.
Given that logo and brand development is so important to a company, you will likely have to budget significant time for adjustments to at least one of the original concepts, maybe two or three, so you need to make sure you account for those considerations when providing pricing. To accommodate potential changes, I typically incorporate 50% additional time to the original development period. If we base on the 40-hour initial development period, you should also allow for an additional 20 hours of revision time.
Setting the Rate
Matt’s Rule of Graphic Design #58: ‘Never accept less for a job than you believe your time and effort is worth and get it in writing.’
So how much should you as a designer charge, or you as a customer expect to pay? That all depends on the market in which you reside and who you choose to develop your logo. As was discussed above both the agency and freelancer routes have merits. It’s not uncommon for agencies to charge $150+ per hour, where freelancers will typically come in around $75-$125 per hour; the range you choose to pay depends on your personal choice and rationale of balancing the risks versus rewards.Could you pay more? Yes. Could you pay less? Of course.
The key as a customer is to shop around … and not just for price, but for quality. The choice to choosing an agency or freelancer is not primarily one of cost, it’s about quality. You want a good logo; one that incorporates all the concepts discussed as part of this manifesto. Make sure you ask to see samples of other logo designs; you are looking for impact, originality and most importantly a style that represents what you want to convey as a business.
The key as a designer is to provide value for the service you offer. If you think that price will be the sole determining factor, you’d be wrong. A customer will be looking for a deal, but if you think about the relevant benefit – the true motivation of the clients, you’ll be able to add enough value to your services that your customer will not see price as being his primary decision criteria.
Let me put it this way… if you are looking to buy a new car, is your sole motivation transportation? No. If it were, you could buy the cheapest thing on the lot and your criteria would be met. When you’re buying a car, it’s as much about prestige and how you look driving the car as it is about getting from point A to point B. It’s also about quality. You could buy the beat up-rusted out-primer stained-missing-the-front-fender-junker your neighbor has sitting on his lawn, or you could pony up more dough for something that you know will run and serve you well not just today but also into the foreseeable future.
It’s the same thing with logo design (and graphic design to a greater degree), you’re not looking for the cheapest junker on the planet, you want something that represents who you are and how you want to be perceived by the rest of the world. It has to have personality. It must be memorable. It absolutely must be versatile.
If you are a designer, make sure you present your logo development services as a value-added package that addresses all the client’s needs; and not just an issue of bottom line pricing. If you let your service become all about price, you’ll lose money – not only this time, but in every dealing with the client. Be fair, be flexible, but don’t give away the farm.
So now that all that has been said, how much should you charge for a logo design? Let’s keep the math simple: If the initial development takes 40 hours for 10 concepts, and you anticipate another 20 hours in revisions, you’re looking at a total of 60 hours of your time invested in the project. If you or your designer has a billing rate of $100 per hour, you’d be looking at a price range of $4,000 – $6,000 for the logo development package. Is that a fair price for a logo package? Yes. Will you as the designer always get that rate? No. But without a solid baseline to work from and value your time and talents, you at least have a starting point from which you can negotiate. Will you as a client always pay that much? Doubtful. But you should at least go into the process anticipating a certain price range – at least now you can go into the process with a clearer understanding of all that’s involved in logo design.
When I say ‘logo package’ I truly look at the logo development process as a package situation. It’s a package because – along with the design – you are also including your knowledge, your advice, research services, and your time.
For a designer, a true logo package means being available to address concerns of the client and walk them through the development process – it also means educating the client as part of the project. Customers will almost invariably ask for changes that work to the detriment of the logo (reproduction, conflicting elements, color, etc.), you need to be able to explain the consequences in plain, understandable terms so that they can make an informed decision. If they still insist, make the changes. It is, after all, their money and their logo. Give them what they ask for.
You also need to provide the materials the client will need to reproduce his logo with the highest quality and consistency; this means a logo disc and creation of a Logo Brand Usage guide that dictates how the logo is to be used. Clients – especially small businesses – won’t always understand all that goes into logo development. You’ll need to be able to intelligently explain and rationalize the costs if you ever hope to get your fair market worth. Remember, your clients are businesspeople too. They will be able to understand what it means to get fair pay for a product or service – make sure you relate your position to them in those terms; terms they are familiar with.
For the customer, the important thing to remember is that the price you pay is an investment in your company and its future. A logo is far more than just an image on your letterhead. It is a public symbol; it is your 24/7 representation of your quality, your brand, your livelihood. Just as you would consider paying for a new cash register, or new building as a means of advancing your business, so too must you consider a logo as an investment in your future success.
For the money you spend, you need to feel comfortable enough with your designer to ask questions, make suggestions and even outright reject a concept. You will be paying a decent chunk of change to get your logo developed; it had better be what you want and you need to feel free to provide you input. Still, it’s important to be open-minded; if you’ve chosen well, your designer will be more knowledgeable than you about branding and logo development. Similarly, if your business is to make widgets, you are the expert in widget production. You wouldn’t let someone from the local burger joint tell you how to build widgets, so give credence to what the designer says. If you don’t buy what he’s saying or he doesn’t make a good case for a particular design decision, it’s okay to hold your ground. This should be a collaborative project, not an adversarial one.
As was discussed in part 7, you should expect to receive a disk with the logo in its many file formats as well as a LBU to ensure that you have the tools to maintain your brand’s identity long after you finalize your logo design. Another consideration – and it may sound silly – is to make sure that you ‘own’ the logo and its files. Some designers/agencies might have you sign documents that allow you to use the logo, but they retain ownership of the files. Don’t do that. With logo design, you need to own the files.
I hope you have found this series to be informative and helpful. It’s been a pleasure to read the feedback and comments each week and to see how well-received this Great Logo Manifesto has been. Hopefully you will be able to take the knowledge found in all eight parts and apply it to your daily use – either as a designer to help you create the logo, or as the customer who will receive the perfect logo to help brand and promote your company.