The Power of a Good Logo

Think about legendary brands such as McDonald’s, Apple, Aflac, Michelin and Starbucks, and one of the first spontaneous associations is often with the brand logo: the golden arches, bitten apple, Aflac duck, Michelin man or Starbucks mermaid. Red Bull’s two charging red bulls in front of a yellow sun differentiate it from numerous competing brands and signify the brand’s promise to provide energy.

Differentiating your brand from others is critical to business survival. So is communicating the benefits of your brand. Our research suggests that brand logos offer a viable, albeit often neglected, means to help brand managers achieve these tasks. We found that the brand logo can be an integrator of the marketing efforts of the brand, a reflector of such effort and the icon of what the brand means to its customers. In short, a good logo can be a synthesizer of a brand that is readily used by customers for identification, differentiation and positive associations.

In our research, we found that 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.

The goal of our research was to answer the following questions:

1. Which important benefits can logos offer other than enhanced brand identification, and how can logos influence customers’ brand commitment and company performance?
2. Which type of logo most effectively strengthens customer commitment and company performance?
3. Can brand logos promote the company’s growth? Specifically, do brand logos help brand extensions succeed?

To explore these questions, we first did several pilot studies in which we conducted face-to-face, in-depth interviews with customers of varying age, gender and ethnicity, as well as with managers across different industries. The interview responses were coded by two trained coders. Our interview findings then informed the formulation of questionnaire items, which were subsequently pretested with 165 respondents.