Best Practice: Branding has two costs: brand development and implementation. Both are equally important, allocate 50% for each.
Today’s Article: What is the Cost of Branding or Rebranding?
Branding has two costs: brand development and brand implementation. Both are equally important. “Build it and they will come” is not a good brand strategy. A good brand needs good implementation. As a general budget rule, allocate 50% of a budget for brand development and 50% for brand implementation.
If you have less than $5,000 for branding development and implementation, self branding with some outside assistance is your best return on investment (ROI). That budget can get you a name, tagline, logo, website and collateral material like a business card, especially for a local business.
If you have a budget greater than $5,000, branding agencies can help you with the brand process to create and implement a new brand or rebrand. This budget can range from $5,000 to over $100,000 depending on whether your business is a local, regional, national or an international business.
Surviving the start-up process requires time and capital or money. It is important to keep overhead as low as possible until the business reaches a breakeven point and the revenue can sustain the business growth. By doing a twelve month cash flow statement it is easier to see what the costs and revenue will be. This helps determine how much start-up money is needed to get through the first year. This also helps determine how much money is available for branding and what branding option is selected. Remember to better insure success; a general budget rule in branding is to allocate 50% for brand development and 50% for brand implementation.
Branding for an Existing Business
Congratulations, you have survived the start-up process. It is still important to keep overhead as low as possible to create sustainable profitable growth. By continuing to use a twelve month cash flow statement it makes it easier to make smart business decisions. It is also easier to see how much money is available for branding.
It may now be time to take a fresh look at your industry (industry analysis), better understanding of current repeat profitable customers and potential customers (target market analysis) and an update on current competitors (competitor analysis). With this new brand analysis information, you can see if a new brand strategy is needed.
Rebranding for an Existing Business
If the current brand is holding the company back from future growth, it is time to rebrand. Here are some clues that it is time to rebrand: people consistently misspell or forget your name. The name is not easy to remember, say or spell.
Your name is limiting adding new products. Examples: Midas Muffler went to Midas to better position the company to be identified with doing full auto service not just mufflers. Apple Computer went to Apple to not be just identified with computers. Domino’s dropped pizza from its name to expand its brand to be known for more than just pizza.
There may be some negative associations with the current name or brand or when going into new markets. Example: “Ever since 1923, we at ISIS have been making premium Belgian chocolate with the utmost dedication” and talks about how the company’s chocolates create “unforgettable moments.” ISIS has now changed its name due to negative association with terrorism. The company is now known as “Libeert”. The new name, a legacy name, is the owners’ family name.
Example: When General Motors introduced the Chevrolet (aka Chevy) Nova in South America, it was apparently unaware that “no va” meant “it won’t go”. After the company figured out why it was not selling many cars, it renamed the car in its Spanish markets to the Caribe.
Action Step: What is your budget for brand development?
What is your budget for implementation?
What is your total branding budget?
Based on your budget what can you afford: see Access Brand Advice below.
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