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How An On-Premise Sign Can Help To Acquire New Customers & Increase Profit

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As a business owner I am sure you are always looking for new ways to increase your customer base. Many business
owners have been in business for years and have never purchased a sign. Signs are so beneficial. It is important for every
business to have one.

With this article I want to share with you a study that was done that shows just how valuable a sign is to the bottom line
of every business.

In 1995 the University of San Diego did a study on the performance of on-premise signs. This study was done in two parts. The first part of the study involved analyzing a group of variables such as signage, location, population’s demographics, hours of operation, etc.. at 162 southern California major fast food chains. Each variable was tested at each of the 162 locations to help predict the impact on-premise signs have on:

  1. annual sales revenues
  2. annual number of transactions
  3. the average dollar amount spent per transaction.

The study showed that the number of signs at a particular location directly affected both annual sales revenue and the number of annual customer transactions. Here are the exact findings of the study:

  1. On average, one additional on-premise sign resulted in an increase in annual sales revenues of 4.75%. This translates to a $23,750increase in average sales revenues for a typical store in the study group with annual sales of $500,000.
  2. On average, one additional on-premise sign increased the annual number of transactions by 3.93%. This translates into more than 3,900 additional transactions for a store with an annual average of 100,000 transactions.
  3. On average, one additional 36-square-foot wall sign added $0.06 per transaction, while one additional 144-square-foot pole sign added $0.78 per transaction.

Now for part two of the study. In part two of the study seven years of weekly sales data for Pier 1 Imports was analyzed. The data was analyzed so they could measure the effects of modifications, additions, or removal of on-premise signs on sales performance. As a result researchers found, and I quote, "on-premise signage has a statistically significant and financially substantive impact on the revenues of a site [and]... is a significant constituent of the factors causing the success of a retail endeavor." Here is a very brief summary of what the study found:

  1. The addition of new signage to previously unsigned buildings, and the replacement of existing signage (generally, with larger signs) resulted in an average revenue increase of 5%.
  2. The addition of a pole sign, or a plaza identity sign including the store's name, resulted in an average increase in weekly sales of 5-10%. The increase was attributed by the researchers to the new signs' enhancement of site visibility to passing traffic.
  3. The addition of small directional signs indicating entrance and exit routes resulted in weekly sales increases ranging from 4-12%. The increases were attributed to the signs' ability to guide a site-bound shopper more than any specific advertising effect.

As you can see an on-premise sign can have a very positive affect on profitability. If used properly an on-premise sign will pay for itself many times over.