Don’t DIY: How In-House Branding Sets You Back
Ambitious business owners want to keep costs to minimum, but what is the cost of doing everything in-house? One San Antonio drive-thru coffee chain made their baristas put down their espresso cups to find out – and the results weren’t stimulating.
Red Runner Coffee’s co-founder, investor and entrepreneur Michael Girdley, took to Twitter to boast how he led his staff through a rebranding effort – sans the consultation and expertise of a branding firm. He estimated an agency’s rebrand would cost $20,000-$50,000, which would have been “awful,” he tweeted.
But what you think you’re saving on rebranding costs; you’re spending on time lost.
Let’s break it down.
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Red Runner Coffee opened as Toro Coffee, complete with a red bull logo, in 2020. Toro was poised to open more locations in the next year when their attorneys called. Someone in Michigan filed a trademark for Toro in 2020. Michigan’s Toro also sold coffee.
It’s difficult to expand a chain without a name. The coffee chain’s team, from managers to part-time employees to Girdley himself, came together. Factoring in the taxes, benefits, insurance and costs unrelated to an employee’s salary, the average hourly rate for a coffee shop’s leadership team comes out to $50/hour.
Girdley did not track or disclose the number of hours he spent researching online and with books, reviewing case studies, and even consulting with lawyers. A safe estimate for research would put his team at 30 hours, or $1,500.
According to his tweets, Girdley tasked his team with identifying the chain’s “dominant selling idea.” This was a sticking point for employees, who argued over “find[ing] their why.” As you know, that’s kind of our thing. Let’s say this process included five employees preparing for meetings and attending them, responding to texts and emails, and hashing it out. That will be $2,500.
Girdley technically didn’t do everything in-house. He put his customers to work, crowdsourcing feedback and input. We’ll simplify and use the same hours spent and employee count. That will be another $2,500.
The brainstorming process involved every person on the team. They went in without a plan or delegated tasks. Once the team compiled an eight-page list of names, they “spent weeks and many long team meetings” whittling it down. A conservative estimate puts 50 hours of initial brainstorming at $2,500. If the five employees who were struggling to figure out their “why” attended 20 hours’ worth of meetings to select potential names, that is another $5,000.
We’ll estimate it took 10 hours, or $500, to comb through eight pages and finally choose a name. The settled on Red Runner Coffee, checking with legal counsel this time. We can’t know how much legal counsel they sought, but it’s safe to assume the rate was higher than $50/hour.
So far, we’re at $14,500 worth of resources – mostly employee time – spent doing work that has nothing to do with their professions. This five-figure sum doesn’t even touch the amount if time and effort that could have gone to what the coffee chain’s “why” is: making coffee. Who knows how much they could have expanded if they focused on operations, growth, strategy, keeping up with the competition, and providing great service to customers.
$14,500 for just a new name. It’s time for a new logo because the (red) bull stops here. How much did that cost? See above. They designed their logo by committee, which we could argue might cost more than $14,500. We’ll stick with the same number, just to be safe. In total, this DIY rebrand cost $29,000.
They spent $29,000 in time, effort and resources. They got their new name, and they got their logo, but that’s it. They did not create a mission statement to build upon, or strategize around their company’s strengths, weaknesses, and goals. This was certainly no RAZORbranding.
They did, however, sink over 540 hours into distracting their team from doing what they do best to get…a name and a logo. While they were “brainstorming,” a West Coast coffee chain opened one of its 450+ locations in their backyard.
We get it. Not everyone can risk $29,000 on assigning employees tasks they aren’t trained or paid to do. It certainly shows ambition, albeit misdirected. When Red Runner Coffee bet on itself, the company and its employees lost the most valuable thing in the world: time.
Stick to what you know. We’ll do the rest.
RUSSO is a strategic branding agency that uses consumer insight to change the conversation; forming emotional connections with the target audience. To learn more about Razor Branding visit brandrusso.com, or CLICK HERE to schedule a meeting with one of our Business Development Managers.