When you think of all the product innovations in our human experience over the last decade, and the speed in which these innovations happen, it seems surreal. Our modern world changes so much faster than many of us can process and meaningfully integrate into our lives. Still, innovate or die continues to be the mantra for business growth.

Just because a product is new or novel does not necessarily make it useful, necessary, or valuable. Every company wants to be perceived as innovative in their product development. The truth is many companies struggle to be innovative in ways that are game-changers for their long-term success. The reason for this is simple. Many companies innovate around themselves, bringing to market only what they can produce at a profit, rather than developing a deeper and richer understanding of what people really desire and then creating new and different solutions to meet those desires.

Modern companies innovate around life experiences rather than competitive or functional features and benefits.

The process of innovation in these enterprises is centered in a deep desire to serve the well being of people–to make life a little better.  To do that well requires insight and empathy in equal measure. Modern companies view the process of innovation as something sacred and transcendent of the physics of their organizations. Innovation is hard-wired into the culture of modern organizations. It’s not a practice that can be mandated, it must be encouraged right along with failure.  In reality there is no such thing as failure in innovation, there is only learning. Thomas Edison proved that over a century ago.

The old cliché there’s nothing new under the sun has never been a more accurate description of our over-crowded marketplace. The physical stuff of innovation (capital, raw materials, machines, markets) is always available and in abundant supply. The availability of physical resources won’t make companies more innovative. The greatest assets for innovation come from the non physical, the formless. Modern companies harness the creative power of ideas, intuition, inspiration, imagination, insight and circumstance to form the required physical counterparts into something uniquely useful, loved, and therefore valuable. Innovation is both strategy and tactic, and organizations can learn to be very good at both to create sustained success in product development.

People have more choices in the marketplace than ever before in human history. Bringing products to market that only add more features just adds to the slush pile.

More and better product functions and features does not equate to competitive advantage. With very few exceptions everything works. That’s the ante, not the differentiator. Innovation is about serving the needs of others first. Innovation is a consciousness, not an event or action step.

Of course, the lasting benefit of innovating around real life experiences is the marketing gets baked into the product, with the end result being people gathered into communities around the product, embedding it into their own life expressions, and sharing this value with others. Enlightened companies who lead markets shift their focus from counting transactions to innovating scintillating, dramatic, novel, relevant, transformative experiences that matter to people.

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I had a conversation recently with a prospective client who was in the pre-information gathering phase qualifying consultants to help them with a corporate name and identity change. Inevitably in determining if we were a “fit” for them, the conversation came to the mother of all questions “ can you give us an idea on your fee?” I answered the question with our standard minimum-level fee estimate “it all depends”.

I went on to qualify their interest further by explaining our minimum fee requirements.  Of course, that brought the conversation to an abrupt conclusion.  This particular “client to be” placed a lesser value on the solution than the criteria our minimum fee required. We quickly determined that we were not good fit for them at this time. I recommended them to a talented graphic designer. No harm, no foul…

As a result, I began to think more about the cost question. What should a corporate identity development cost? Why do clients fixate on the consulting fee– the smallest cost component in a fully implemented corporate rebranding initiative? I began to do some research to see if there was any form of pricing standard or guideline that potential clients could learn about and use to help them qualify the cost question early in their search for a consultant.  Surprisingly I didn’t find much useful information out there. Not surprisingly, in my conversations with my colleagues in the identity business, the common answer I got was my own “it depends”.

I did come across some interesting information from identityworks.com, and an article on the question at hand. Read it here. This site contains great information on the state of the global identity business. Take a moment and check it out.

Organizational and category brand identities are different animals.

The nature of identity change (both strategically and creatively) is quite different for a corporate organization than it is for a category brand (product or service). While neither is a trivial undertaking, corporate identity development not only involves top line naming and logo development, but also involves complex assessment, planning and strategic thinking with executive management. Additionally, subsidiary identities, naming structures, product brands and the scope of implementation over a variety of physical properties will vary significantly depending on the size of the organization.

Category brand identities are no less important, but implementation, or the scope of the physical applications involved are notably not as complex. Category brand identities commonly express themselves in media advertising signatures, product packaging, retail environments and various forms of marketing communications.

While all this makes sense, it still doesn’t answer the cost question beyond “it depends”.

What factors affect corporate identity development costs?

From my own experience, development costs for an organizational identity change commonly depend on:

Direct engagement with CEO / CMO executives.
Rarely are such endeavors delegated to lower level managers who would have full authority to make critical decisions. If you have a steering committee structure with lots of opinions to cater to, you’ll most likely be required to pay more in consulting fees.

Size and scope of the organization, subsidiaries, business units, brand architecture.
If the identity change requires complex planning, rigorous market research of various audience segments around the globe, the development costs can be significant.

Reputation and experience of the identity consultant.
Will your corporate identity be developed by a generalist like your advertising agency or PR firm, or do you require the specialization of a global identity firm; or would you be better served by a smaller consulting team consisting of a highly specialized identity or brand strategists in concert with top identity design talent?

How much time is available to complete the assignment?
Assuming you are working with specialized talent in both strategic and design counsel,  there can be many business reasons why the process might be accelerated which would place a premium on the development costs.

A rule of thumb (sort of)

From what outside sources I found (links to come), here’s a breakdown of basic development costs (consulting fees) for rebranding an organization with revenues of $250 million+ . (exclusive of extensive market research, audience segmentation analysis or physical property and media channel implementation).

Assessment / Planning / Strategy / Naming  $50-100K

Verbal and Visual Identity Design Development  $50-75K

Design Applications and Documentation (print or web based) $60-80K

This general rule of thumb puts the benchmark somewhere in the range of $160- 250K.

This fee range assumes you have retained a seasoned and highly skilled independent identity consultant team (not logoworks.com or a global branding firm).

The value of specialized expertise.

Identity development costs can be significant one-time expenses for any size organization. But when understood as an excellent one-time opportunity to leverage the event of a rebranding, there is no better investment to build the foundation to command greater attention and awareness, elevate perceived quality and renew market confidence.

Of course the cost to implement such a program over time (physically and in media communication channels) will always exceed the costs to develop the initial identity strategy. Highly specialized identity consultants come as close to creating and shaping the vibe of a client company as you can get, without actually being the CEO. Just think about all the valuable outcomes an institution’s name, logo, theme line, trade dress, unit names and unit signature system can potentially achieve:

establishing the ‘preferred positioning’ the entity intends to earn;

facilitating the entity’s distinguishing culture and quality that appeals to top talent;

revealing to vested audiences the coherence and purposes of the entity’s composition;

building the foundation of the entity’s value proposition to customers

determining the criteria around  “where we’re going, how must we best organize ourselves and behave to get there”.

Your identity (corporate or brand) is more than the face of your organization in the marketplace. It deserves the investment specialized expertise delivers to build lasting influence and market value over time.

Relative to the value you believe your corporate identity represents to your vested audiences, what price would you put on its development? Or think of it this way–what price would you pay to ensure a successful outcome?  What ever that “number” is for your organization, determines the perceived value you have for the benefits of the specialized expertise an identity consultant provides.

I have to constantly remind myself that most people will perceive any price as high when they believe they are buying a commodity in abundant supply. I hope this provides you with some useful insight on the subject. As always, your comments are most welcome.

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The best brands are those managed by business leaders who understand their brands are not one dimensional. They know it is more than just delivering a high quality product or service experience to consumers.Brands are multifaceted and multidimensional, just like the companies that own them.

There are four key areas that business leaders need to examine regularly, to build their strategic roadmap for growth and success;

To whom you market.
You can only create cool products or solutions when you know who the likely buyer will be that will be using the product. It is critical to understand as much as you can about the potential buyer.

Why they buy.
Grabbing the largest share of those consumers’ wallets requires you really understand the usage of products in your space, and put rigor against their illuminating needs, motivations, attitudes, and preferences.

What you market.
Your positioning needs to drive purchase behavior and be ownable and differentiating (yes, you can actually measure these things). How you position your products/services will determine whether your brand will make it into, and dominate, consumers’ spending patterns.

How you compete.
Your brand equity or the health of your brand is a culmination of consumers’ familiarity with your brand and the sum total of their brand experience. These attitudes and perceptions determine whether you will have loyal advocates for your brand who will be the first to try any new product extensions, or become vocal detractors sharing their views with their online social network.

When you actively manage these four key drivers of your brand’s success, you will gain greater confidence to make the hard strategic decisions that help you avoid expensive mis-steps.

Editor’s Note: We’re pleased to introduce Mike Murphy as a contributing author on the Infuence by Design blog, MIke is Founder and Chief Energizing Officer at Los Angeles based Brand IQ, a leading consumer insight and brand strategy consultancy. We look forward to your comments. Email Mike: mmurphy@brandiq.biz

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When organizations and brands are in the process of changing their identity, I’ve noticed a tendency that it’s easier for executives to focus their energy on “breaking the change to the world” through measured marketing communications, rather than creating a prior strategy of bringing the inner-vested into the identity conversation early on. People naturally want to know “why are we doing this, and what’s in it for me?”

In communicating the aspects of identity change, is your focus on the inner (employees and shareholders), or the outer (more marketing)?

There are powerful market forces that shape identity change. Corporate identity changes are often driven by the CEO as a response to forming the outer market’s perceptions of the value to their enterprises, particularly after a merger or acquisition.  Brand identity changes are usually driven by circumstances in the outer media and sales channels.  These outer drivers are powerful forces indeed. Identity changes have an equally compelling effect on people inside the organization who will be tasked with contributing to “a new idea” they may know little about.

When you provide the reasons why your identity requires change, it’s imperative to have these ideas resonate positively within your organization first, before the outer world. When that happens, it’s like putting Miracle-Grow on the seeds of your brand image.  People on the inside must believe the changing organizational or brand identity will have a positive impact on their lives before they’ll be an influential-buzz-generating machine twittering away in our transparent digital age.  The reason most successful brands seem to have an inner glow about them is no accident.

Having an internal communications strategy in place at the very beginning of the process, is fundamentally important for a successful outcome. Better when clarity begins the process.

What’s your take on this?

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Developing a new or refreshed corporate or brand identity is often a response to change.  Many factors will drive that change– new management, mergers, acquisitions, product development, or a competitor’s threat to a core business. Most change within organizations (or individuals for that matter) is usually driven by external influences (fear) and rarely is initiated through forethought (innovation).

Seemingly in every industry category, offerings are increasingly becoming commodities and perceived by customers as less differentiated and less valuable. Naturally it’s tempting to respond to this by changing something.  It’s only logical to assume that maybe you can duplicate success by copying the attributes, features or capabilities of what is working for others.  The sobering truth is this tactic will not sustain real growth, nor add more value to customers; it only increases the sameness and adds to the clutter.

We adapt by copying others.

Social observer and author, Mark Earls demonstrates the simple fact that humans have largely evolved by copying others. For thousands of years, humans have adapted through a  “do what works” mentality. In fact, Earls points out “copying is our species’ number one learning and adaptive strategy.” The temptation to copy other’s success is, well–tempting. Here’s why:

It’s easier and less risky to copy what works than to create more value.

Humans have naturally sought the safety and security of the known, and avoided the risk of the unknown. When it comes to building an identity, product development, and marketing, the majority of change today is really just copied from what came before, or from what’s currently influencing the behaviors of the status quo.  The pressure to sell more stuff seems to trump creating more value through serving people better.

As a result, products have more features on features, there are more flashy logos, more marketing.  Seemingly, the more that changes, or gets copied, the more organizations and brands become the same– the result is more commodization with eroded brand equity.

Your identity in the marketplace must stand for something.

I’ve said this before; your business must matter to people, but not to everybody. There is no competitive advantage in doing what others do, or have done before. The idea that your business or brand identity promises a “total solution” is just another way of saying it doesn’t stand for anything.

If your brand is number three or four amongst competitors, don’t confuse copying success with value creation.

The key to creating compelling value in the marketplace is to focus brand building strategy on serving the needs and desires of only those who value what you provide, love to engage with it, and in doing so, share it’s value with others. As the tribe of believers grows from the influence of others, so does the power of your brand’s identity and value. Copy that and you can change the world.

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The Sans Radio SHACK Attack.

I’m amused with the new name adopted by RadioShack. You can check out the promotional roll-out events here. In an effort to be more relevant in the challenging retail environment of consumer electronics, I think RadioShack’s intention to transform itself into a more compelling and “hip” retailer is a good idea long overdue.  Alas, it might be too little, too late.

This name change seems to be a half-hearted effort with a half-baked result. My intuition tells me RadioShack’s management is still not quite sure what they want to become, or if they are even doing the right thing. Of course, I am not privy to the real facts behind the story, but as a blogger with an informed opinion, I think this provides an interesting example of why a name change must be an “all-in” affair. I rolled my eyes at the CMO’s hedging remarks that this is not really a name change?  Then what is it–advertising?

Let me begin with the name change to– “The Shack”.  (Interesting that it coincides with Pizza Hut’s recent moniker change to “The Hut”.  I wonder if they are using the same ad agency?)  It seems to me, management must believe the key descriptor in the name (radio) is no longer an accurate handle that describes a relevant, and emotionally powerful customer-facing frame of reference.

On the surface, one might agree with the “logic” behind this rational, we are way past the glory days of transistor radios, CB’s and home radio operators for which this brand is iconic. One could make a convincing case for a name change. However, this effort seems blatantly superficial!

The hard truth remains– people have stopped caring about RadioShack (and Pizza Hut too), pure and simple. Here’s what has not appeared to have changed much at THE SHACK:

oh-hum store environments with generic products

a third-tier electronics component retailer with a low-value consciousness and blurry positioning.

a management culture that continues to value safety and security, over love and innovation.

I’m not being critical of the name change to “THE SHACK”.  In my opinion, (aka rant) I don’t think it matters what you call them. I’m just saying that customers care more about the experience of value your brand provides them. You can’t change the name and not the substance behind the name and expect that alone will make your business matter to people again.

A highly targeted positioning, an emotionally rich and relevant value proposition, and an unforgettable experience of value will comprise a brand worthy of customer advocacy. Best Buy has these bases well covered, plus their name says it all.

By the way, you may not realize this, but all the mobile communication products and services that are a large part of the merchandising mix at the now RadiolessShack are, in fact, just a newer type of radio. Go figure…

What’s your take on it?

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I wrote an earlier post on naming a few months ago. The point of that article was focused on the structure of various naming configurations. It was a left-brain attempt to outline some conventional naming structures designed to serve as a guide to help those who might be in the middle of a naming process. What I didn’t outline in the previous post was the right-brain approach to naming…

When you engage in a naming initiative from the right side of the grey matter, the concern is less on structure and convention, and more on creating a clear mental image that serves the desired positioning of your company, product or service. A great name is just too important a business asset to come just from one side of the brain.  The right brain approach is the one that connects verbal cues with clear mental pictures. This is very important because people think and remember in pictures! Before I go deeper, let me share a couple of stories from marketing folklore.

For many years, there was a small but growing athletic footwear company with a check-mark shwoosh logo called Blue Ribbon Sports. Not a terrible name, but not compelling enough to create a powerful mental image of winning foot races. Wisely, the company changed its name to a word that came from a Greek Olympic chant meaning “win, win, win!  With this more evocative name, coupled with a more aspirational positioning and promise, Nike took off to the heights of greatness only a few companies will ascend to.

Then there was the Pequod Coffee Company, a name under serious consideration from a start-up company from Seattle. The owners had a fascination with all things Moby Dick. (Apparently one was an English professor). What useful and compelling mental images and associations does the name “Pequod” bring to your mind?  Alas, someone said something to the effect “since you are so set on the Moby Dick theme, and you already have a mermaid as your symbol, why not use the name of the Pequod’s first mate, Starbuck? At least it easier to pronounce and it sounds better”.  From there, another marketing legend is born!

For all you marketing communications executives working in a company with a three-letter acronym name that is not AT&T or IBM, this might cause you to think more about a name that will provide your company with more powerful visual imagery that will separates you from the slush pile of all the other companies with dull, boring and meaningless three-letter names.

In a cluttered brandscape, owning a name that sparks a clear mental image that communicates the promise you make to your customers can be the white hot center of your competitive advantage.

What mental images does your company name convey? Are these visual associations aligned with what makes your business matter to people?

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