The story you tell through your brand is how you compete for your customers’ hearts and minds. If your brand story is not resonating, a rebrand can be one of the most important things you do to help your business survive. This is especially true during times of economic contraction, when folks become more judicious with their resources.
But a rebrand requires an investment (both in time and in money), and most company stakeholders want to know it’s worthwhile. So how can you actually measure the value of a rebrand?
In some ways, it’s intangible. In fact, we don’t always advocate tying investment to strict metrics simply because there are many factors that can influence how a rebrand is achieved—and how it’s received. But we’re well aware that people want a clear ROI when it comes to a rebrand, so today we’re diving into some of the most common ways to measure success, the caveats to be aware of, and the way to move forward if you’re ready to rebrand.
But first, let’s start with the reasons for rebranding—and why they matter.
The Real Purpose of a Rebrand
When most people think about a brand, they think about what a consumer-facing brand looks like. But that’s only dimension. A brand is not a logo; a brand is what customers, employees, and investors think of when they think about your business. In short, it’s how other people perceive your brand.
It’s no different than how humans show up in everyday life. If you want people to perceive that you take health seriously, you exercise and eat well. If you want people to view you as a professional, you dress appropriately for your industry.
You can’t influence how people feel about your brand, but you can influence how they perceive your brand, which will shape how they feel about your brand.
Unfortunately, for many businesses, there is a disconnect between the way folks perceive the brand and how the brand wants to be perceived. This leads to a gap in desired business outcomes. (Branding expert Marty Neumeier refers to this as The Brand Gap.) If you’re not sure if you’re suffering this gap, answer these questions:
- How far off from your marketing and sales goals are you?
- How far off from your hiring and retention goals are you?
If you’re falling short, there is only one thing to do: mind the gap. Take a hard look at your brand to see where it’s landing vs. where it’s missing the mark—and consider a rebrand.
But know that a rebrand is not a superficial repackaging of your brand with a fresh logo and fun colors. It’s a strategic exploration and re-articulation of incredibly important decisions, including who you are, why you exist, and how you compete in the marketplace. (These elements are then expressed through the various ways that people interact with your business.) Note: A rebrand is much bigger than a brand refresh, which involves simply making smaller, specific, surgical changes to the brand.
The Benefits of a Rebrand
Fortunately, although a rebrand is a heavy lift, if done well, it also can be a way to reap significant rewards. After guiding our clients through the rebrand process, we anticipate very specific benefits, including:
- Effortless conversion
- Increased revenue
- More aligned teams
- Customer and employee loyalty
- Successful fundraises
Or course, a rebrand is a significant investment of time, money, and resources. So every brand should understand that investment before giving the green light.
The Cost of a Rebrand
Time to talk turkey. How much should you spend? What will you get in return?
Well, remember that because there is so much strategy involved, a rebrand is not a cosmetic change. It takes a team that is well-versed in building and rebuilding brands, with the ability to translate strategic decisions into real-life brand elements. Hence, most of our rebrand engagements land in the $150,000 – $250,000 investment range.
Depending on your company size, industry, and maturity, this might seem low or it might seem high. (BTW, remember when Pepsi spent $1 million for a logo?) Regardless, investing in a rebrand can deliver remarkable returns if it helps your brand close one or two additional deals. Depending on your deal size, you could break even (at the very least) or increase profit significantly (in an ideal world). But the direct dollar amount is not necessarily your best metric of success.
How to Measure the ROI of a Rebrand
Measuring the ROI of a rebrand can be a bit murky because there are so many mitigating factors.
If businesses existed in a static environment where industries were not constantly changing, the simple way to measure the ROI of a rebrand would be this:
- Take total revenue for 12 months after rebrand (e.g., $50,000,000).
- Subtract 12 months’ revenue prior to rebrand (e.g., $40,000,000).
- Take the difference ($10,000,000) and divide it by the pre-rebrand value ($40,000,000).
- Divide this figure ($10,000,000) by the cost of the rebrand (e.g., $200,000) = 50.
That is a 50x return on investment. For what it’s worth, our own agency targets a 7x return on our marketing dollars.
Unfortunately, the reality is that we don’t do business in a static environment.
- The economy runs in cycles.
- Customers and coworkers cycle in and out of the business.
- Marketing strategies continue to evolve.
- Competitors evolve too.
- Supply chain issues can be a challenge.
- Products continue to change and evolve.
The list goes on and on. Every single one of these things can affect your revenue, so that neat formula doesn’t always translate. Frankly, most checkwriters wouldn’t be satisfied with the basic arithmetic above, nor would any of your colleagues who work their tails off. Additionally, you’d be hard-pressed to figure out a way to accurately account for and weigh these other factors in your equation.
So, what is the alternative? Instead of focusing on one big number, we like to look at individual metrics to get a holistic picture—as they relate to both your consumer brand and your employer brand.
- ROI of marketing
- Lead volume
- Lead-to-Opportunity conversion rate
- Time to close
- Number of new customers
- Hiring metrics
- # of applicants for each role
- # of offers accepted
This approach also helps you understand and triage more tactical issues that may improve these individual metrics.
There are obviously other things that you can look at, but these are the types of things that we care about (and our clients care about) the most, and they are simple to measure. I’d also advocate for taking multiple metrics into account because one or two metrics rarely tell the story. (Hence, that single neat formula isn’t perfectly accurate.) Plus, the more metrics you look at, the more opportunities you have to isolate and identify what’s working vs. what’s not, and then, in turn, make adjustments.
In fact, this is the approach we took with our own rebrand in the last two years. By looking at a variety of primary (and secondary metrics), we got to see a clearer picture of our progress and areas to improve. For example…
- Our lead volume dipped by 7%, our conversion dipped by 40%, and our time to close increased 20%. These numbers don’t look good for our rebrand.
- But, we increased sales 160% and increased revenue 59%—our highest year ever.
What we deduce is that our rebrand helped us make clear and direct improvements to attract clients that were looking to invest more in marketing. We are attracting fewer leads, yes, but they are leads with much larger accounts. These accounts have more decision-makers involved, contributing to an increased time-to-close, but the payoff is substantial. We’ve also kept our eye on secondary metrics that contribute to how well our rebrand has helped us tell our brand story. For example, we saw our site bounce rate plummet from 80% to 27%, meaning we are attracting exactly the right people to our site. Now we need to work on increasing conversions. But thus far, our rebrand has been fantastically successful. We have also helped our clients do the same and found notable results. (In the first 30 days after we rebranded ELM, their opportunity rate increased a whopping 60%.)
Ideally, after your rebrand, all of the above metrics should be up and to the right, but they might not be. If they’re not, being able to understand opportunities for improvement makes it easier to figure out how to get them there. For example, after we debuted our updated messaging for a year, we realized our positioning was not as strong as it could be. We re-examined, tweaked, and clarified, and now we are even more confident in our ability to communicate effectively. This sometimes happens, and in some cases, elements of a rebrand will work extremely well while some will need to be tweaked and iterated upon as you gather feedback from the market. At the end of the day, the quality of a rebrand outcome is the result of the quality of the strategic decisions made early in the process.
Ultimately, although you may never be able to quantify the exact dollar value of a rebrand, you should still be able to determine how a rebrand helped grow your business in specific ways.
How to Rebrand the Right Way
There’s never a perfect time to rebrand (and if you need to do so, it was probably yesterday). But if you are considering diving into a rebrand, here are some things to keep in mind.
- Make sure you do, in fact, need to rebrand. We see too many brands come to us after being mandated to rebrand by some higher-up, but they don’t necessarily know why they are doing it. It’s important to know exactly what you’re trying to solve to keep everyone on the same page and ensure the work they do is in service of your end goal. If you’re not sure what you’re trying to achieve, here are 7 reasons to consider a rebrand.
- Follow best practices. Because a rebrand is such an investment, you need all stakeholders aligned at every stage of the process. Use our complete guide to rebrand to approach the process strategically and get it done as efficiently as possible.
- Launch it correctly. To use your brand successfully, it needs to be applied consistently. See our guide to roll out a rebrand to ensure your team is prepared and empowered to use your new brand effectively. Once it’s out in the world, give your team a grace period to master producing quality content consistently. Then you can scale.
Most importantly, make sure you have the right partner to get you through the process. Rebranding can be enjoyable, but there are plenty of potholes and pitfalls that can sabotage your work if you don’t know what to look out for. Working with a skilled agency can help you navigate these and do it all with much less stress. If you’re on the hunt for a partner, see our tips to find an agency that will work with you, take a look at our brand development FAQs to find out what working with us is like, or hit us up directly. We’d love to turn your rebrand into our next case study.