A weekly look at Wyoming business questions from the Wyoming Small Business Development Center, part of WyomingEntrepreneur.Biz a collection of business assistance programs at the University of Wyoming.
By Cindy Unger, business consultant
"How do I evaluate the effectiveness of my signage expenditures?" Chris S., Casper
The most effective way to evaluate the cost effectiveness of any marketing method is to look at the cost per 1,000 exposures.
Obviously, the price and life expectancy of signage varies widely. Assume that investing in signage costing $16,500 is expected to last for approximately seven years. If 30,000 cars pass by the sign each day, then the cost per 1,000 exposures would be 13 cents.
If the same amount is spent on outdoor advertising (billboards, bus advertising, etc.) the cost would be 83 cents per 1,000 exposures. Newspaper (depending on the circulation and cost of the advertisement) would cost approximately $1.57 per exposure. Television would cost $6.60.
The California Electric Sign Association and the International Sign Association in 1995 commissioned the University of San Diego to study on-premise signage. Results indicated that the number of signs at a particular site impacts both annual sales numbers and the number of annual customer transactions.
When new signage was added to previously unsigned buildings or old signs were replaced (generally with larger signs) there was an average revenue increase of 5 percent. Adding a pole sign or plaza identity sign including a store's name, resulted in an average increase in weekly sales of 5-10 percent, attributed to an enhanced site visibility (http://www.sba.gov/).
Naturally, as the business becomes established, more sales will come from repeat customers, and fewer will be the direct result of signage, but the sign will remind current customers of the business' presence. Estimates indicate that 35-50 percent of today's consumer population shop outside their local area. A business sign can help attract a large percentage of the visiting and newer consumers.
Remember, an on-premise sign is the most visible form of advertising for a business. Use the sign as a powerful marketing tool to advertise the business, all day, every day.
A Blog version of this article and an opportunity to post comments is available at http://www.wyomingentrepreneur.typepad.com/blog/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, e-mail wsbdc@uwyo.edu or write 1000 E. University Ave., Dept. 3922, Laramie, WY 82071-3922.
Posted on Monday, April 13, 2009