Breaking Down The Cost of Rebranding.

Did you know companies spend 5-10% of their annual marketing budget as a cost of rebranding? This statistic highlights the importance of a strong brand strategy that seeks continuous optimization. These organizations continuously look for where the existing brand does not resonate with the target audience or align with the company’s next move.

In such cases, rebranding becomes the necessary next step. But before a brand can push forward, the first step to take on the rebranding checklist is creating a budget, which cannot happen until you know the answer to an important question: how much does a rebrand cost.

Awareness of the cost of rebranding ensures that they allocate appropriately and get the most out of their investment. In this article, we’ll break down each rebranding cost, providing a comprehensive guide to help businesses make informed decisions about this brand strategy. 

So, keep reading to learn everything a brand must know about rebranding costs, whether a complete overhaul or brand refresh.

Reasons Why Companies Rebrand

There are many reasons why companies engage in rebranding. The first and most important is updating the current brand identity and matching it with the market’s needs. Brand identity visually, auditorially, and experientially represents the company’s values, mission, and personality. It can become outdated, inconsistent, or irrelevant as more competitors emerge and market needs change. 

In such cases, rebranding helps adjust the brand positioning and develop a relevant identity that resonates with the target market’s interests. For instance, Dunkin’ Donuts announced a brand refresh, changing its name to Dunkin. 

The rebranding launch helped Dunkin’ reposition itself as a modern coffee chain and CPG brand that caters to the needs of its target market while holding firm to its company’s heritage. Another reason is to update brand architecture, which refers to how a company organizes its brands, products, and services. It helps companies to simplify their brand architecture and create a more consistent and cohesive brand portfolio. 

Rebranding can be a powerful tool for companies to set themselves apart from their competitors and establish a unique identity in the eyes of their desired audience.

Types of rebranding.

Rebranding can take different forms depending on the situation and the requirements. Based on a company’s goals and scope of changes can be divided into three main types: brand refresh, partial rebranding, and complete rebranding. 

A brand refresh is not technically a rebrand but a component sometimes performed in isolation. Refreshing a brand involves minor updates to the current brand identity. Tweaking the logo, updating the color palette, or revising the brand story are common examples. The main goal is to update the brand and keep it relevant without making significant changes. 

A partial rebrand, on the other hand, involves making significant changes to certain aspects of the brand. It may include updating a brand identity, positioning, or storytelling. However, the changes aren’t comprehensive enough to require a complete brand overhaul. Partial rebrands aim to improve effectiveness and relevance without abandoning the brand identity.

A complete rebrand or a brand overhaul is the most extensive rebranding, also called a reboot. It involves completely overhauling the brand identity, strategy, and architecture. A complete rebrand aims to create a new, modern, relevant brand identity that resonates with the target market and differentiates the brand from its competitors.

Is a brand refresh a form of rebranding?

The most rebranding questions we receive is around the brand refresh. It’s important to note that a brand refresh is a component of a rebrand, not a rebrand itself. A brand refresh can be part of a partial or complete rebrand but doesn’t involve significant brand strategy or architecture changes.

How much does a rebrand cost?

Rebranding is a comprehensive process that significantly impacts a company’s brand performance. It involves completely reviewing and adjusting the brand identity, strategy, and architecture to create a new, modern, relevant brand that resonates with the target market. 

While rebranding can lead to significant benefits, such as increased customer loyalty and higher revenue, it also comes with direct costs that must be considered. Proper budget planning helps reduce the risks of rebranding and ensures a smooth execution. The following is a breakdown of the cost of rebranding a business:

Average cost of a rebrand.

The cost of the strategy can be divided into three categories: brand, retail, and competitive audit. Each has its own expense and budget requirements. Let’s break down the cost associated with performing each type of audit. 

Brand Audit: This involves a detailed brand positioning, recall, and awareness analysis. The goal is to identify strengths and weaknesses in the existing brand and determine areas for improvement. The cost of a brand audit varies depending on the project scope and depth of detail required. 

Retail Audit: A retail audit analyzes the company’s retail presence. It includes store layout, merchandising, competitive set, and customer experience. These audits aim to identify the weak points in retail channels and then build a strong presence. In contrast to brand audit, the cost of the retail audit depends on the number of stores. 

Competitive audit: Finally, a competitive audit helps a company perform an in-depth competitor analysis and find areas of improvement relative to the market competition. Compared to the first two, the cost of competitive audits can be very high because of the high level of detail involved in the strategy and time. Investing in a comprehensive audit also reduces the cost of brand development.

Design Costs

During a rebranding project, the company has to undergo different types of redesigns such as logos, stationary and business cards, website, and marketing collateral. Here’s a chart that summarizes the cost of various design items:

Testing Costs

Testing messaging and design concepts is critical in the brand reboot process. It ensures that the new brand identity effectively communicates its message and resonates with the target market. However, it comes with direct costs that must be considered.

The costs of testing messaging and design concepts will depend on the specific testing methods used. It may include conducting focus groups, surveys, consumer panels, and other market research to gather feedback to determine how the new brand identity impacts purchase intent and brand recall.

Focusing only on the key areas that require testing is essential to minimize testing costs. This may include testing the brand’s tagline, rebranded logo, and other vital elements critical to the reboot’s success.

Legal Costs

Legal costs, such as trademark registration and consultations, are essential in rebranding. These costs can add up quickly, so budgeting them early is vital.

• Trademark registration helps protect the new brand identity and prevent others from using similar marks. 
• Legal consultations help to ensure that the brand identity does not infringe on the intellectual property rights of others. 

Their costs will depend on the specific registration process used and the number of registered trademarks.

Production Costs

Production costs can vary depending on whether a company produces a single or multiple SKUs. Multiple SKUs can increase production costs due to rebranding multiple products or services with unique prices, but single SKU production may be cheaper since resources are concentrated on one product or service.

Producing new signage, uniforms, and packaging is a typical expense for creating single or multiple products. These costs can be higher if the business requires new materials. Likewise, reproducing marketing materials like brochures, business cards, and other promotional items can also incur high costs.

Digital Costs

A company must also allocate a significant portion of the budget for its digital assets, as redesign costs can escalate quickly depending on the digital channel. Some typical digital costs associated with changes include website rebranding, email changes, and social media profile updates.

The following table provides a rough overview of the costs. The price may vary depending on the specific scope of work required and the level of complexity involved in the rebranding effort. 

Indirect Costs

Indirect costs during rebranding include lost productivity, discounted inventory, and other non-design-related costs. These costs can be significant and have a major impact on the success of the rebranding effort.

When creating a budget for rebranding, it’s essential to account for direct and indirect costs. Understanding the indirect cost ensures a successful rebrand. This means considering the cost of hiring a branding service or updating marketing materials and the potential cost of lost productivity and business.

Employee training costs.

Some typical employee training costs associated with rebranding include developing and implementing the training program, hiring trainers or consultants to lead the training sessions, and verifying brand consistency as the team changes the current branding.

To minimize employee training costs, it’s important to carefully budget for training early in the process and explore cost-effective training methods where possible. Remember to add this as part of your S.O.P. when considering onboarding training costs.

It may include leveraging existing internal resources, such as in-house trainers or online training platforms, or partnering with external training providers who can provide cost-effective and high-quality training services.

Marketing costs.

Creating a marketing strategy involves several costs, including press releases, social media updates, and paid advertising. These costs may vary depending on the nature of each segment. For instance, the cost of the press release will mainly depend on the frequency. Similarly, social media marketing campaigns may incur high prices; the same goes for ads. 

Loss of brand equity.

When businesses lose brand equity, it can lead to lower brand recognition and decreased customer loyalty. To avoid these risks, partnering with a trustworthy rebranding agency is crucial. Such an agency will handle the rebranding process thoughtfully and strategically, considering the brand’s history and existing customer base. Additionally, they can maintain customer loyalty by communicating the rebranding process effectively and transparently to current customers.

Hidden costs.

Having a margin of safety in your budget is essential to account for hidden costs that may arise during a project. These costs can include unexpected delays, additional resources, or unforeseen expenses. Without a margin of safety, these hidden costs can quickly eat into your budget, causing financial strain and potentially derailing the entire project.

Time investment.

While a successful rebranding initiative can be time-consuming, it’s essential to prioritize this initiative to ensure its success. Taking shortcuts or rushing the process can lead to a subpar outcome, ultimately harming the brand’s reputation and bottom line. 

Allocating the necessary time and resources to the rebranding initiative and communicating its importance to the team ensures their commitment to its success.

Unforeseen situations.

Unexpected situations can arise when launching a marketing campaign or implementing new brand guidelines, requiring additional time and resources. These situations can include delays in production, such as unexpected supply chain disruptions or manufacturing issues, which can impact the timeline for the campaign launch.

Errors or mistakes requiring correction can also occur, such as typos in marketing materials or incorrect messaging, which can harm the brand’s reputation if not addressed promptly. These situations can require additional time and resources to fix, potentially delaying the launch of the marketing campaign or creating extra costs.

Rebranding budget.

Creating a financial plan is crucial for the success of a rebranding strategy. It helps in better resource allocation and keeps the project on track within a budget. Companies must build their financial plan early when rebranding the product, review it regularly, and update it timely as the project progresses. 

Read More: 5 Steps To Take For A Successful Rebranding Campaign.

Understanding the competition.

The size of the investment required for a rebranding project will depend on various factors, including the market competition level, the brand’s goals and values, and the target market. It’s essential to carefully consider these factors when determining the investment size required for a rebranding project. 

It will help ensure that the new brand identity effectively communicates its message, resonates with the target market, and delivers a solid return on investment (ROI).

Allocating resources wisely.

Resource allocation is a crucial step in boosting the success of rebranding by managing direct costs associated with creating a new brand identity. Experts who handle expenditure resources effectively and efficiently while prioritizing brand strategy and testing to ensure a strong ROI are crucial.

Working with graphic designers, branding agencies, and marketing consultants can provide valuable insights and expertise throughout the process. Companies can ensure their resources are spent on high-quality work that effectively communicates the brand’s message and resonates with the target market.

Making the financial commitment.

Committing to the rebranding effort is crucial for its success, as it involves more than just direct costs. The risks associated with not completing the rebranding process can significantly impact the company’s brand performance. 

One of the most significant risks of failing to complete the rebranding process is that it can confuse customers and stakeholders. If the company starts rebranding but doesn’t see it through to completion, customers may wonder what changes are happening and what they can expect from the company. 

Data-driven brand development that can guarantee sales performance.

If you need a rebrand with performance predictability, we can help. SmashBrand is a brand development agency that researches, designs, and tests all products to ensure peak shelf performance while reducing the cost of rebranding a business. Book a time to discuss your project with our team.