February 17, 2015 Clarence

The Cost Effectiveness of Signage: A Profitability Analysis

Contact-us-blueStudies have shown that on-premise signage can increase sales by 2.5% to 7%. This article will seek to look into this statistic, and at how signage translates into actual sales results. This article will also look at the profitability of signage when compared to other popular forms of advertising and marketing. Westmount Signs is an expert in all thing signage. Click here to contact Westmount Signs and Printing today. Is signage worth the design and installation cost? Read on to learn more.

Signs vs Other Forms of Marketing

Signage is the lowest cost-per-impression marketing method of all of the traditional marketing avenues. On-premise signs cost on average 0.013 cents per view. This is quite low when compared to other forms of advertising, such a television, which can cost 0.66 cents per view. This means that in certain circumstances signage can be 50x less expensive then television advertising. The primary reason for this difference is the single cost nature of signs and their comparatively low production costs. Many other forms of advertising incur monthly or yearly costs in order to remain active, while a sign will continue working for years with only minimal maintenance/repair costs (repainting, replacing light bulb).

Increase Sales Numbers

The following quotations are taken from the handbook, What’s Your Signage? put out by The New York State Small Business Development Center in conjunction with The Signage Foundation for Communication Excellence:

“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.”

“On average, one additional on-premise sign increased the annual number of transactions by 3.94%.”
The above quotes demonstrate just how effective a single on-premise sign can be. Signage follows a trend similar to the law of diminishing returns. The introduction of the first few on-premise signs in the area of the business will have a drastic impact, while additional signs will still increase sales but to a lesser extent.

“When new signage was added on previously unsigned sides of buildings sales increased from 2.5% to 7.1%.”

“The on-premise sign is the most efficient, most cost effective form of advertising available to a small business.”
The above quotes summarize all of the data from the report quite well. Simply put, signage increases sales. As seen above, signage is the most cost efficient form of advertising. Because of this, there is a strong case to be made as to the effectiveness of on-premise signage. This level of ROI has shown on-premise signage to be one of the most cost effective forms of advertising available.

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