The Importance and Effectiveness of Signage

I was doing some research to gather some statistics together so I could write a great blog post tying in many different studies, and giving you, the reader a comprehensive analysis of why on-site signage is so important. But during my research I found a handbook that has already done this, so I’m just going to cut and paste some excerpts for you to read verbatim. No need to reinvent the wheel! Or the sign blog. Special thanks to The New York State Small Business Development Center and EBSCO sign group. See the full document here: The Importance and Effectiveness of Signage Full Document
Recently, we asked Perry Powell, a Texas-based signage consultant to the car wash industry, what mistakes he commonly sees committed by his clients. “There’s a mentality among small business owners – though not chains – when money is committed to building in a new location,” he says. “They allot x amount of dollars in their budget to a line item called ‘signs’. If a cost overrun occurs during construction – and those are not uncommon – then the sign budget is the first thing that gets cut.” The reverse of this thinking exists within certain large consumer oriented corporations, who have studied the science of signage like few others.   McDonald’s is one such company. They recognize that the unique signage presentation at each of their locations helps emphasize in the minds of consumers one of the most valuable brands in all of business. To reinforce this branding, it helps that the very first thing they install at a new location – even before they break ground – is a sign. McDonald’s spends about $40,000 on signage per location. Assuredly, there are few small businesses that can afford that. But trimming the signage budget in the here-and-now, while providing short-term savings, will have long-term consequences.Think of it. There are thousands of people who’ve never been to your door. The sign on your premises is your handshake with the public, and that handshake is the first impression beingnmade on potential customers. Often, people judge the quality of your business on that first impression. What is your sign saying to them? Is it a blur of crowded text and graphics, illegible to drivers as they motor past your store? Does it readily and effectively tell passersby what you offer, or does it make sense only to you and your employees? Is your sign illuminated effectively? Is it being regularly maintained? What role is it playing in your business?   Ideally, it should perform at least these three functions: • Attract new customers • Brand your site in the minds of consumers • Create “impulse” sales A study by a California sign company a number of years ago has helped 488 independent small businesses measure readership. Each of the businesses surveyed 15 to 30 first-time customers to determine what prompted their visit. In all, the businesses surveyed 7,203 first-time customers, each within 30 to 45 days after the installation of a new sign. One of the survey questions was, “How did you learn about us?” Here’s how they responded: Your sign: 46% (3311) Word of mouth: 38% (2708) Newspaper advertisement: 7% (511) Yellow Pages: 6% (450) Radio commercial: 2% (133) Television commercial: 1% (90) Signtronix Survey, 2003. Creating Impulse Sales Today’s consumer tends to purchase goods and services both by habit and by impulse. However, studies have shown that the majority of sales come from impulse buying. For instance, recent research from the University of California at Berkeley (which analyzed 30,000 purchases of 4,200 customers in 14 cities) found that 68% of purchases were unplanned during major shopping trips and 54% on smaller shopping trips. To take advantage of such a consumer, your business will need an effective sign to attract their attention Noteworthy findings from the 1997 CESA study include: 1. On average, one additional on-premise sign resulted in an increase in annual sales revenues of 4.75%. In other words, if a business had been grossing $500,000 annually in sales, the addition of just one on-premise sign resulted in a $23,750 increase. … 4. When new signage was added on previously unsigned sides of buildings sales increased from 2.5% to 7.1%. 5. A new pole sign with the firm’s name impacted revenues from 4.9% to 12.3%. Such signs effectively reached passing traffic. Researchers attributed this increase to enhanced visibility of the store’s new sign to passing traffic. 6. Small, reflective directional signs increased revenues as well. These signs aid shoppers in finding entrance and exit routes. The impact of these signs increased weekly sales from 4.0% to 12.4%. Case Studies Belmont Auto Spa, a car wash business, had a sign that was illegible and too low to the ground to be visible to passing vehicles. Additionally, the owner wanted to attract more customers to the new detailing services that the company was offering. A new pole sign, costing $15,000, was erected with a reader board promoting specials. As a result, the detailing segment of the business increased 125%. The new sign increased overall business by 15% creating additional gross revenue of $135,000 in the first year. The sign paid for itself in just six weeks. • In the story of Frenchy’s Bistro, customers at one time referred to the restaurant as the one “near the paint store,” since that store had a more noticeable sign. Frenchy’s sign – a small, onedimensional sign that was flat against the façade of the building – was hardly visible to the street. Only residents familiar with the area frequented the restaurant. When revenues had stagnated, a friend of the owners suggested a new sign. The installation of a new V-shaped, internally illuminated sign increased gross annual revenues by 16% during the first year. In the second year, revenues increased another 32%. Frenchy’s later expanded into the shop next door and added an even larger sign. In four years, as a result of the restaurant expansion and signage improvement, gross income increased 322% to over $823,000. The data and research in this handbook have demonstrated that the on-premise sign is the most efficient, most cost-effective form of advertising available to a small business. In its most basic form, it has been shown to be responsible for bringing in as many as half of all new customers. When it is designed as part of an overall site motif, and tied in with other forms of advertising, its benefits to the bottom line can be even more substantial. The sign tells everyone who sees it that they are welcome to come inside and conduct a business transaction. Not only does your signage work for your business 24 hours per day, 7 days per week, but also, a sign is an investment asset that you own, you control, you can finance, and adds value to your business and property.
  Feel free to comment below if you have any stories from your own business, or if you have any questions!

10 thoughts on “The Importance and Effectiveness of Signage”

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