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A Lame Logo Could Really Hurt Your Business

New research attempts to quantify the power of a great logo -- and define exactly makes one exceptional.
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As a small business owner, your logo is probably not the first thing you think about in the morning or the last thing you ponder at night. That’s fair -- your customers aren’t going to be swayed by clever branding if your product, price or service are lousy, but are you taking your cavalier attitude toward your company’s logo too far?

If you had your buddy dash off a logo for you years ago and haven’t thought about it since or if you’re tempted to slap whatever first comes to mind on the top of your invoices and call it a day, new research written up in the MIT Sloan Management Review is for you (site sign up or subscription required).

Researchers C. Whan Park, Andreas B. Eisingerich and Gratiana Pol explain in the article how they conducted detailed interviews with respondents, as well as surveying 450 people about their reactions to 77 corporate brands. The collected data was then compared to company performance. What did they find?

The enhanced identification benefit offered by a brand logo (in other words, making it easier to identify a brand in the sea of competing offerings) has no significant impact on customer brand commitment and only a small impact on company financial performance. In contrast, when they express a brand’s symbolic, functional or sensory benefits, logos have a significant positive effect on customer commitment to a brand -; and thereby a significant impact on company performance in terms of revenues and profits.

So in other words, great logos have a real impact on the bottom line. But that begs the question, what makes a great logo? The article is well worth a read in full if you’re currently pondering a new logo or a change to your old one, and discusses in detail what makes several iconic logos so powerful, but there is a quick and clear bottom line takeaway. In short, logos with symbolic power beat simple text:

Some logos consist only of the brand name. Think of IBM, Goldman Sachs, Oracle or Samsung. Other logos use the brand name in combination with a unique visual symbol, such as Nike’s swoosh or Arm & Hammer’s flexed muscle arm with rolled-up sleeve. Others drop the brand name altogether and rely on a visual for their logo, such as Apple’s apple or Mozilla Firefox’s stylized fox.

Our research found that separate visual symbols used as logos tend to be more effective than brand names at creating a sense of emotional connection with consumers. This may not come as a big surprise, because symbols have long been considered more effective than words as communication tools. Symbols better overcome language barriers and are easier to interpret than words. However, despite the commonly understood benefits of symbols versus text, surprisingly few companies take advantage of separate visual symbols.

Want more insight into what makes for a successful logo? Check out these posts laying out the four characteristic of great logo design, ten tips for start-ups to make their logos memorable, and ideas on how to get a great logo designed for a reasonable price.

Do you agree with the findings that symbolic logos are generally more powerful?

IMAGE: Getty
Last updated: Oct 23, 2013

JESSICA STILLMAN

Jessica Stillman is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist.




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