U.S. Small Business Administration Management Assistance Number 4.016

Introduction
Signs are one of the most efficient and effective communication media available to the small businesses. Signs help people find you; they reach people who are passing by your establishment. In short, signs tell people what you are selling. Signs are such a powerful communication medium that it is difficult to estimate the extent of their influence.

What Signs Can Do for Your Business

Signs Are Street Advertising

The Advantages of Signs

On-premise signs are your most effective and efficient means of commercial communication because they are inexpensive, always on the job, and directly oriented to the trade area of your business.

Signs Are Effective

There are four basic criteria used to judge the effectiveness of advertising media: (1) coverage of the trade area, (2) repetition of a message, (3) readership of a message, and (4) cost per thousand exposures of a message. Let’s see how signs measure up to the above criteria;

1. Signs are oriented to your trade area. Signs do not waste your resources by making you pay for wasted advertising coverage. The people who see your sign are the people who live in your trade area.

2. Signs are always on the job repeating your message to potential customers. Your on-premise sign communicates to potential customers twenty-four hours a day, seven days a week, week after week, month after month, year after year. Every time people pass your business they see your sign. The mere repetition of the message will help them remember your business.

3. Nearly everyone reads signs. Signs are practical because nearly everyone is used to looking at and reading signs, even small children. Studies have shown that people read and remember what is on signs. When special items are displayed, sales increase for these particular items within the store.

4. Signs are inexpensive. When compared to the cost of advertising in other media, the on-premise sign is very inexpensive. Table 1 indicates the cost-per-thousand exposures for the various media in a given community. There is no better advertising dollar value than your on-premise sign.

Studies of Advertising Values and Effectiveness

As a means of increasing sales, advertising is one of our most valuable resources. From an advertising and public relations standpoint, the physical location of your business can be your most valuable asset. An average of eighty-five percent of your potential customers are likely to pass by your establishment at least ten times every month. The advertising implications in this circulation of potential customers around your business location are enormous. In terms of a comparison, the advertising value of your site is the equivalent of your receiving two free full page newspaper ads every month you are in business. Finally, this potential to influence people exists right outside your door, which is the only place where those impressed by your sales message can react to it instantly.

One major study involved restaurant chain operators. With their ability to assess relative profit performance among various units, they have found a direct correlation between effective on-premise signs and sales volume, in some cases amounting to thousands of dollars in gross revenue per week. In a typical case study, Colony Kitchens, analyzing twenty-eight locations, found that without fail those stores with adequate signage all had volumes well above the average for the chain as a whole.

Researchers at Colorado State University found the same direct correlation between adequate signage and increased business volume. In a study designed to examine the contribution of electric signs across a broad spectrum of business usage, professors Patty & Vredenberg found evidence, in one case alone, of a business whose volume rose by three thousand dollars monthly after installation of on-site signage.

Obviously, at some point, wasteful spending of advertising dollars in any medium can result in an increase in sales volume. So in advertising, as in everything else we do in business, what really counts is Cost Effectiveness, or getting the most for every dollar! When you invest in advertising, a cost-effective approach substantially increases your chances of achieving optimum market coverage for a given budget, no matter how modest that budget may be.

It found that an average on-site sign was viewed by eighty-five percent of the retail market, ten times per month for a cost of only pennies per thousand exposures. In comparison, a three hundred line newspaper ad, also run ten times a month, could command only fifty-three percent of the market at a cost of two dollars and eighty-one cents per thousand. Readership estimates are even more startling, with sixty-one percent attributed to the sign and thirteen percent to the newspaper advertisement. Comparisons between on-premise signs and other media in the study were even more decisive in favor of signage. TV for instance, cost nine dollars and eighty-two cents per thousand exposures but could command only fourteen percent of the retailers market with a readership of only eleven percent.