A small business usually meets the words “corporate identity” when it needs a logo. Someone proposes a symbol, a color, a typeface, and the question seems to be one of taste. It is a bigger question than that, and in some ways a smaller one: smaller, because a small business does not need what a multinational needs; bigger, because the logo is only the visible part of something that is done every day.
As always in this Observatory, we keep three things apart: what the research shows, what we observed in our own companies, and what we propose. It is the reader’s pact of the Mental Sciences Applied to Business.
What corporate identity is, and why the definitions are foggy
Even researchers admit that the field is confused. In an influential 2001 paper, John Balmer listed fifteen reasons for the “fog” surrounding corporate identity and proposed “business identity” as an umbrella term covering corporate identity, organisational identification and visual identity.
Managers do not agree either. In 32 in-depth interviews with managers, mostly from multinational companies, Melewar and Karaosmanoglu found considerable disagreement about what corporate identity includes; most associated it with design, communication, behaviour and strategy. The authors proposed a categorisation in seven dimensions: a proposal drawn from interviews, not an established model.
For this article we use simple words. Identity is what the company is and does. Image is how others see it. The brand is the promise people recognize. The logo, the colors and the typeface are the visible signs of all three.
The first job: being recognized
Researchers at the Ehrenberg-Bass Institute argue that customers perceive little differentiation between competing brands and buy them anyway, and that brands should focus on being easy to recognize rather than on being seen as different (Romaniuk, Sharp and Ehrenberg). This is the position of one school of thought, not a consensus, but it is a useful question for a small business: not only “what makes us different?”, but also “what makes us recognizable?”
Not every element can become yours. A study of 1,281 brand elements in 13 consumer goods categories and 19 countries indicates that characters, logos and logotypes have the greatest potential to become uniquely associated with one brand, while color is harder to own because competitors share it (Ward and colleagues). A study of the UK car market found a similar pattern, with typefaces, slogans and colors among the least unique elements (Fiocchi and Esfahani). Both studies concern large brands; applying them to a small business is our extension.
The logo, when nobody knows you yet
An analysis of 195 logos by Henderson and Cote indicates that different goals call for different designs. Logos meant to be recognized accurately after heavy investment should be very natural, very harmonious and moderately elaborate. Logos meant to work with little investment, creating a sense of familiarity and a positive reaction, should be less natural and very harmonious. Note what “familiarity” means here: the sense of having seen something before, which can be false. A later study across ten countries, including some of the same authors, suggests that these design dimensions are broadly similar across cultures, with only minor differences between Western, Asian and Russian respondents (van der Lans and colleagues). The original study dates from 1998 and concerned printed logos; applying it to small icons on screens is our extension.
The most useful study for a small business is more recent. Across six studies, Luffarelli, Mukesh and Mahmood found that logos that depict the type of product or service, such as the sole of a running shoe for a running shoe brand, tend to make brands seem more authentic and to improve brand evaluations. In one of the studies, the effect was considerably weaker for a brand participants already knew, and in another it reversed for a product with negative associations. A link with higher sales appeared only in correlational data on large listed companies. Some of the results were statistically weak, as the authors themselves note.
There is no logo that is right for everyone. The same research group found that more complex logos signalled innovativeness to investors on equity crowdfunding platforms and were associated with more funding (Mahmood, Luffarelli and Mukesh). In front of customers, saying what you do seems to help; in front of investors, looking new seems to help. What counts is the audience, and the goal.
Before you change your logo
In a field experiment with 632 respondents and two athletic shoe brands, the more an angular logo was made rounded, the less favorably strongly committed customers evaluated the brand, while weakly committed customers reacted positively (Walsh, Winterich and Mittal). A follow-up by the same authors found a similar pattern. The studies concern one kind of change and very well-known brands. Our reading for a small business: the customers who stand to lose most from a redesign are the ones who are most attached to you.
Consistency is a habit, not a manual
A survey of employees in 20 Dutch organizations suggests that a consistent visual identity depends mainly on how it is managed: whether people know the strategy behind it, have been introduced to it, and have the tools and support to apply it (van den Bosch, Elving and de Jong). Consistency was measured as perceived by employees, and the link with business results was not measured. In an earlier conceptual paper, the same group argued that a visual identity can, in principle, support a company’s reputation through three things: the quality of its design, the range of its applications and the condition of its carriers, such as signs, vehicles and printed materials (van den Bosch, de Jong and Elving). It is a proposal, not a finding, and it makes a good checklist.
Small firms are not small multinationals. Research on small and medium-sized enterprises suggests that their brand management differs significantly from that of large companies, and that some brand practices are associated with better business performance (Berthon, Ewing and Napoli). An exploratory study of four small consumer-goods firms observed that the founder’s values set the tone of the brand, and that with limited resources it made sense to focus on a few features consistent with those values (Spence and Hamzaoui Essoussi). Four cases are an observation, not a rule.
Numbers not to believe
A widely quoted claim that consistent branding raises revenue by 23% comes from a 2016 survey run by a marketing research firm in partnership with a brand software company. It is the average of what respondents who admitted consistency problems guessed their revenue would rise if their brand were always presented consistently (234 usable responses in all). It is an estimate, not a measurement, made by people answering a survey commissioned by a company that sells consistency.
More generally, the research we found does not show that a better logo, by itself, increases sales. Claims of that kind should come with a study you can identify.
What we observed
In 2019 this address hosted a page of ours that promised a strong corporate identity would make a business recognizable and set it apart from the crowd, and offered to design one. We would not write that promise today. Recognition is built over time, by using a few elements always and everywhere, and no design guarantees it.
What we have practiced for years is a rule about names rather than logos: one audience, one brand. We gave each of our activities its own brand, so that each identity speaks to one public with one promise. It comes from Al Ries’s work on focus; it is a doctrine of our house, not a research finding. When a new offer needs its own name is the subject of brand architecture.
What we propose
For a small business, we propose an identity that is small, stable and used everywhere.
- Write the promise before the logo. One sentence: what you do, for whom, and what customers can expect. The visual identity serves that sentence, not the other way around.
- If few people know you, let the logo say what you do. It seems to help unknown brands more than known ones. Avoid it if your product category carries negative associations.
- Choose few elements you can own. A logo or logotype and perhaps a character are easier to make yours than a color your competitors also use.
- Use them always. Website, invoices, signs, social profiles, packaging, email signature. Check the three things of the checklist: the quality of the design, where it is applied, and the condition of what carries it.
- Make consistency easy. A one-page guide with the logo files, the colors and two or three ready templates does more for a small team than a manual nobody opens.
- Before a redesign, ask who loses. Who are your most attached customers, and what do they recognize today? Change what you must, keep what they recognize.
How a name works in memory is discussed in brand names; how a position is built, in brand positioning; why credibility needs proof, in brand credibility.
In practice
Collect in one place every surface where your business appears: the site, the shop window, the invoices, the social profiles, the van, the business cards. Look at them side by side. Then ask a few customers, without showing them the logo, what they remember about you. What they remember is your identity today. What you see side by side is how much of it you are actually controlling.
The research indicates that some choices are better than others for a given goal. It does not guarantee results, and neither does any designer.
Corporate identity is one of the subjects of Psychology of Marketing, the second of our book-courses.
Sources
Balmer, J. M. T. (2001). Corporate identity, corporate branding and corporate marketing: Seeing through the fog. European Journal of Marketing, 35(3/4), 248–291. https://doi.org/10.1108/03090560110694763
Berthon, P., Ewing, M. T., and Napoli, J. (2008). Brand management in small to medium-sized enterprises. Journal of Small Business Management, 46(1), 27–45. https://doi.org/10.1111/j.1540-627X.2007.00229.x
Demand Metric, in partnership with Lucidpress (2016). The Impact of Brand Consistency. Benchmark report, October 2016. A company report, not a scientific publication.
Fiocchi, G., and Esfahani, M. S. (2024). Exploring the uniqueness of distinctive brand assets within the UK automotive industry. Journal of Brand Management, 31(1), 1–15. https://doi.org/10.1057/s41262-023-00329-6
Henderson, P. W., and Cote, J. A. (1998). Guidelines for selecting or modifying logos. Journal of Marketing, 62(2), 14–30. https://doi.org/10.1177/002224299806200202
Luffarelli, J., Mukesh, M., and Mahmood, A. (2019). Let the logo do the talking: The influence of logo descriptiveness on brand equity. Journal of Marketing Research, 56(5), 862–878. https://doi.org/10.1177/0022243719845000
Mahmood, A., Luffarelli, J., and Mukesh, M. (2019). What’s in a logo? The impact of complex visual cues in equity crowdfunding. Journal of Business Venturing, 34(1), 41–62. https://doi.org/10.1016/j.jbusvent.2018.09.006
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Ries, A. (1996). Focus: The Future of Your Company Depends on It. HarperBusiness.
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