Why LED Signs

Signage 101

Your sign is your voice on the street. It communicates with passing pedestrians and motorists. It convinces them to come through your doors and do business with you.

Did you know?

  • Signage is the least expensive but most effective form of advertising.

  • Signage can be responsible for half of your customers - that’s right, 50 percent!

  • Signage is so important that without it you may not get a loan for your business.

  • Signage is an investment that will pay a return many times over.

  • A well-designed, well-placed sign can generate huge profits, especially when part of an overall marketing strategy.

Signage can no longer be an afterthought. Businesses can no longer afford to just "hang up a shingle" or throw up some plywood with painted letters. In order to compete in today's competitive marketplace, you must think of your sign as a sophisticated, powerful marketing tool. It should work for you 24 hours a day, 7 days a week, 365 days a year, creating the first impression of your business, telling people who you are, where you are and what you offer.

You might be thinking...

  • What are the elements of good signage?

  • What kind of sign do I need?

  • What do I need to know before buying a sign?

  • Where do I get a sign?

  • Where can I find a sign company?

  • How can I reap the benefits of good signage?

  • How can I maximize signage benefits for my business?  

ISA can help guide you through the sometimes tricky aspects of finding the right sign for your business.  

                             

Signs: The Bottom Line

Obviously, you're in business to make money. In order to do that, you need customers to buy your goods and services. Here's how signage can help.

Signs as Advertising

A few years ago, a sign manufacturer performed a study of its clients to find out whether their signs were bringing in customers. The businesses surveyed were a year or less old and the surveys were conducted within 30 to 45 days after the installation of a new sign. Thousands of shoppers were asked, "How did you learn about us?"
The results, shown in Table 1, clearly demonstrate that the signs attracted half of the start-up businesses’ new customers – more than any other form of advertising the businesses used and even more than their word-of-mouth referrals.

 

Table 1: How did you learn about us?

Number of Customer Responses

On-Premise Sign

Word of Mouth

Newspaper

Yellow Pages

TV

Radio

1,234

820

212

139

32

38

Percentage by Category

50%

33%

9%

6%

1%

1%

Naturally, as your business becomes more established, more of your sales will come from repeat customers and fewer will be directly due to your sign. But that does not mean the sign has become unimportant. On the contrary, you must constantly remind your regular customers that you are there. Even more importantly, studies show that on any given day, as many as 35% of the people passing your business have never seen it before and could become first-time customers because of your sign.

 

Increasing Profits

The University of San Diego conducted a study to determine the economic value of on-premise signage. Table 2 shows the average increase in sales revenue that resulted from signage improvements. [1]

 

TABLE 2 - Average Increase in Sales Revenue

Signage Change

Fast Food

Pier One Imports

Add one monument sign

9.3%

 

Add large pole sign (144 sq. ft.)

15.6%

8.6%

Add chain identity to plaza identity sign

 

7.7%

Addition of two new directional signs

 

8.9%

Replaced storefront wall sign with larger sign

 

7.7%

Let's assume you own a typical family clothing store and add a new, better-designed sign to the business. Here's how it could impact your bottom line:

 

Your annual sales

$1,757,486

Cost of goods sold

61.8%

Gross Profit Margin

38.2%

Operating expenses (includes other expenses of 1.5%)

36%

Income taxes (estimated at 35%)

0.8%

Income after taxes

1.4%

After tax profit ($1,757,486 x 1.4% or)

$24,604

A 7% increase in sales created by the addition of a needed sign, without increasing operating expenses, would cause the following change in profit:

 

New sales at 7% ($1,757,486 x .07)

$123,024

Gross Profit from new sales ($123,024 x 38.2% Margin Contribution)

$46,995

Net Profit (Assumes 35% taxes)

$30,547

Total Profit (Original Profit $24,604 plus New Profit $30,547)

$55,151

With a small, 7% bump in sales your profit could jump from $24,604 to $55,151. That's an increase of over 124%! Increasing profits is one way that signs improve your bottom line. Another way is by decreasing expenses.

Cutting Costs

A number of surveys have been conducted before and after installing signage to determine effectiveness. One of these, from late 1996, involved a Los Angeles auto dealership. Three previous auto dealers had failed at the location. The new owner, Aztec Motors, spent much time, energy and money improving the building and lot.
Once renovations were complete, the new owner invested $7,400 in replacement signage that entailed one wall and one double-faced pole sign.
A survey found the new signage, not the renovations or other advertising, was responsible for a minimum of ten new walk-in customers per week, resulting in at least six additional sales per week.
It took less than a month for the new signs to pay for themselves, and the owner was able to reduce his advertising budget from $16,000 to $4,000 per month an annual savings of $144,000.
As part of your advertising you're probably considering one or more of the following: TV, radio, newspapers, Internet, direct mail, etc. The most basic way to evaluate the cost effectiveness of these or any marketing method is the cost per 1,000 exposures. Here's how business signs measure up to other media.
The price and life expectancy of signage varies widely depending upon the type, but let's assume you invested in signage costing $16,500 that should last seven years. If your business is located on a street with 60,000 people passing each day, the cost per 1,000 exposures would be only 11 cents.
The same $16,500 spent on outdoor advertising (i.e., any sign that is not appurtenant to the use of the property, a product sold, or the sale or lease of the property on which it is displayed) for 1,000 exposures would cost $0.83. A similar expenditure in newspaper advertising would cost you $1.57, while television advertising for 1,000 exposures would cost $6.60.
If you'll remember from Table 1, only 1% of first-time customers come in because of your television ad. But 50% come in because of your sign. If you're spending only 11 cents per 1,000 exposures to get that 50%, that's a good use of your money.
[1] Figures from The Economic Value of On-Premise Signage, a study conducted by the University of San Diego School of Business Administration.

Signs as Marketing

Signs are so widespread we hardly notice them. That is until we're looking for one and then we only note that in passing. We don't realize their effect on us, which is one reason why they're so effective.
However, it is precisely because they are so commonplace that many merchants take them for granted. Obviously, most small business owners know they need a sign but they think of them as merely a marker identifying the business. As a result they are unaware of and underutilize the earning potential of signage.
In order for the independent merchant to fully realize the potential earnings of signage, he or she must look at signage not just as a way of marking the business but also as a way of marketing the business.
Your on-premise sign should identify your business, mark its location, and convey the right image of your company. But, the most important thing it should communicate is what you are selling.

The ABCs of Signage

At a minimum, your sign should Attract new customers, Brand the business and Create impulse sales.

Attract New Customers

Research indicates that 85% of your customers live or work within a five-mile radius of your business. But according to the U. S. Census Bureau, 18.6% of the population relocates annually.
Which means every year you're losing customers that you must replace with new customers, just to break even. Who's in business just to break even?
If you only want to sustain your business then just maintain your customer base. But if you want to grow your business, you must increase your customer base. The quickest, easiest and most economical way to attract new customers is with signage.
If you'll recall from the previous section a small, 7% increase in sales produced over 124% increase in profit. It is for this reason that attracting the new customer is essential to your profitability.

Brand the Business

When your business is the first one that comes to mind as a place to find a product or service, you have achieved what is called "top-of-mind awareness." Top-of-mind awareness is built and reinforced through repetition.
As mentioned, 85% of your customers live or work within a five-mile radius of your business. When driving to and from work, school and shopping, they pass your location some 50 to 60 times a month. Your sign should be designed so that it commands their attention every time they pass.
That's how signs help build top-of-mind awareness and brand your business. To further this effort, make sure your sign is included as part of your overall marketing strategy.
For example, a Volvo dealership in Portland, Oregon always includes in its radio ads its address, followed by the phrase "under the big blue Volvo sign." When people see the big blue Volvo sign they remember the commercial.
Additionally, the name of your business, your logo, company colors, catch phrase, etc., should be consistent on your sign, your letterhead, business cards and print ads.
All these coordinated efforts build recall and recognition and help brand your business in the mind of the consumer.

Create Impulse Sales

Even though many of today's consumers have the financial ability to spend money, few have the time in which to do that spending. They're certainly too busy to search for you or wander around comparison-shopping. They are more likely to stop at the first convenient place they see that seems to be selling what they need.
Who hasn't been driving down the street, stopped at a store and made a purchase, merely because they saw the sign?
Best Buy discovered that about 17% of its customers were people who did not intend to stop there but did so specifically because they saw the sign.
Another example of how signs can be very effective at influencing a customer's buying habits is the Belmont Auto Spa in southern California.
The business was profitable but not as much as expected. Unfortunately, the original sign, although expensive and well placed, was poorly designed. Its lack of color contrast prevented it from standing out from the background and it couldn't be seen or read at a distance. Further, since the sign didn't have any of the characteristic visual features one would expect for a car wash, drivers didn't recognize it as one and drove right on by.
The owner invested $15,000 in a new pole sign that was well-designed. The strong, first-read pictorial graphic immediately identified Belmont as a car wash and the colors were contrasting and lively. A reader board was also added to highlight specials such as detailing.
In its first year, the new sign produced a 15% increase in overall business, which translated into an additional $135,000.00 – nearly nine times the cost of the sign.

Marketing to your Customers

Different types of businesses have different signage needs because they serve different purposes and reach out to different customers. To make sure your signage is specifically marketing to your customers you must first determine your category of business.
At one end of the business category spectrum are companies that satisfy specific and infrequent customer needs. At the other end are businesses that fulfill general and frequent needs.
An effective sign will employ different marketing strategies depending on the type of business and the needs of its customers. When businesses fall in between the two extremes, they will need to use a combination of methods.

Infrequent needs branding sites

Businesses that offer products or services that meet specialized or infrequent needs must develop top-of-mind awareness so people remember the business when those needs arise. Examples of this kind of business include veterinarians, , appliance and electronics stores, locksmiths, medical and dental offices, real estate offices, and accounting and bookkeeping firms.
These businesses must focus on branding their site. To reinforce this effort, the signage itself must be designed to project the right image for the business and have that image be recalled.
When a customer walks through the door of one of these businesses, it is likely he or she has already noticed the business's sign, developed an opinion about the business, and remembered the business when it was needed.
Studies show that electronic message centers and variable message displays increase memory of a business. People are curious to see what the sign will say each time they pass it, so they keep looking at it. When a sign is a source of information people want, it takes on more significance in their memory, branding your site.

Frequent or Impulse Needs

Businesses designed to meet frequent or impulse needs must reach out and pull people in on the spot. Examples of these include grocery stores, gas stations, hotels, video stores, restaurants, convenience stores, and car washes.
Many of these business's customers need to make a quick decision to stop. Therefore, their signage should be eye-catching with a brief, simple message that can be read and understood quickly. The businesses must be noticed and recognized at precisely the right time by those ready to buy. Often these businesses rely heavily on attracting tourists and need to be sure those unfamiliar with the business can tell right away what is sold there.
The typical McDonald's is a good example. The "golden arches" are such familiar icons that the McDonald's sign can be easily recognized long before the sign's lettering can be read. This gives a driver plenty of time to notice the sign, make a decision to stop, and safely maneuver through traffic. An independent fast food restaurant with a poorly-designed sign that is hard to see, hard to read, and hard to understand, will have great difficulty competing for the frequent need customer even if the food, service, and pricing are superior.
If your sign is going to convince the impulse customer to stop at your business, it must be designed so that the important information is easily recognized at a glance. People driving down the street can take in a great deal of information. Seventy-five percent will pick out the key word on a sign the first time they pass it. Make sure the first time someone reads your sign they immediately understand the most important information – what you are selling. Any additional information should be designed to keep your repeat customers interested in your sign and your business so they remember to come see you again.
Because we read from the top down and left to right, the key word, graphic, or logo should be located at the top of the sign and read from left to right. Otherwise, the reader can get confused and take longer to understand the sign's message. This delay can mean the person who is seeing the sign for the first time is unable to read and react to it before driving past your business.

The Right Sign for Your Business

Successful signage involves more than creating an attractive arrangement of logos and slogans. It is also a blending of complex elements such as marketing, demographics, an understanding of visual acuity, conspicuity, and obliquity. Complicating the task is the fact that the reader is usually moving, and the sign must be seen, read and understood in an instant.
No matter how good your product or service is, if your sign does not make people stop and shop, you will not be able to compete. In our highly competitive and media-rich world, an investment in professional sign design is worthwhile. Trained designers understand how to get the consumer's attention. Most importantly, they know how to get the consumer to respond.
Remember, every major chain that exists today started out as a small business. Your long-term success can be shaped by the effectiveness of your street presence if it is professionally designed from the very beginning.
The right sign for your business must send the right message to your potential customers.

Elements of Good Signage

How well a sign works for your business depends in large part on how easy it is for people driving by to see and read it. Following is a step-by-step guide for making sure your sign can be seen and read in time for potential customers to react and stop at your business.

Placement

Table 4 shows what researchers [1] learned about how far a car at different speeds will travel from the time a driver first sees the sign until the car safely comes to a stop. This assumes the sign is mounted perpendicular to the roadway and includes the amount of distance needed to read a typical sign and make a decision to stop.
If the sign is mounted on the front of the building parallel to the roadway, research shows it needs to be at least 70% larger than the sign mounted perpendicular to the roadway, or it cannot be read in time. Note that if a sign has unfamiliar words or lots of words, it will also take longer to read.
The figures in the table can help determine whether your prospective business site will be visible to customers. For example, if the speed of traffic in front of the site is 30 mph, and the street has two lanes in each direction so that a lane change is needed, your customers will need to be able to see and read your sign from 410 feet away.
If your customers would not be able to see your business sign from that distance, you should consider another location.

  

TABLE 4Minimum Required Legibility Distances in Varying Situations

 

 

Speed(MPH)

 With lane change

(in feet)

 

Without lane change(in feet)

 25-30

 410

 155

 35-40

 550

 185

 45-50

 680

 220

 55-60

 720

 265

 >65

 720

 280

The Right Size

Assuming the sign can be seen from the distance listed in Table 4, the next step is to figure out how large the letters on your sign need to be so that your message can be read.
Experts recommend designing signs with letters a minimum of one-inch tall for every twenty-five feet of distance. This makes them readable for all legal drivers. In our example, then, the smallest letters on a sign would be 16.4 inches in height if it were to be read from 410 feet away (assuming 30 mph traffic moving in two lanes in each direction). Note that if your sign is using fancy lettering that is more difficult to read, the minimum letter size must be increased significantly.
To figure out the smallest possible size your sign can be and still be readable, figure each letter in the message will take up one square. In our example, that would be 16.4 square inches, or 1.37 square feet, for each letter. That allows for space between lines and words. If the sign read, Lydia's Beauty Supply, its 18 letters would need a minimum of 25 square feet just for the words. For optimum clarity, an additional 40% of empty or white space would be needed, for a total of 35 square feet. That would be the absolute minimum size for a perpendicularly mounted sign with no graphics and very plain, easy to read lettering.
Most businesses are not going to be well served by a small, plain sign with no graphics. The lettering style, the ability of graphics and logos to be easily recognized, whether or not the words on the sign are familiar and easy to read, the lighting methods used, and even the colors used all impact people's ability to see and read a sign.

Height

Now that you know where your sign will be placed and how large it needs to be the next question is how tall the sign needs to be. The further away the sign will be read, and the further it is from the road, the taller the sign must be to be visible from a car. Freeway signs intended to be read from great distances should be very tall; signs located in a business district with 30 mph traffic only need to be tall enough that parked and moving vehicles will not block them from view.

Although the length and content of a sign's message generally dictates the overall sign dimensions, Table 5 sets out generally accepted sign height guidelines. They assume that the sign is mounted perpendicular to the roadway, that the size of the letters meets the minimum size standards listed in Table 4, and that the sign is mounted within 5-10 feet of the nearest edge of the public right-of-way. Note that although the table lists heights measured to the top of the sign face, the height from the ground to the bottom of the face should always measure a minimum of 7 feet so the sign is not blocked from view by passing or parked vehicles.

Table 5

Speed Limit 

Number of Traffic Lanes 

Sign Height (to top of sign face) 

 25 mph

 2

 12 feet

 25 mph

 4

 12 feet

 35 mph

 2

 20 feet

 35 mph

 4

 20 feet

 20 feet

 2

 35 feet

 20 feet

 4

 35 feet

 55 mph

 2

 50 feet

 55 mph

 4

 50 feet

 Urban Freeway

 N/A

 75 feet

Illumination

Lighting is essential for most signage. It allows your sign to be visible and readable day and night, in all kinds of weather. When a sign is illuminated, drivers can read it more quickly. Another benefit of an illuminated sign is that 24-hours a day it is advertising your business. Even when your business is closed, that constant reminder helps build memory of your business.
Signs are generally illuminated by one or a combination of three basic methods: by lamps mounted outside it and oriented to shine on the sign's face, by internal illumination that shines through the sign's face, or by illuminated elements such as exposed bulbs, LEDs, or neon-style tubing. A wide variety of illumination methods are available, and rapidly developing technology is creating a virtually unlimited variety of possibilities, many of which are very economical to install and maintain, as well as being energy-efficient.
When you select the color scheme for your business, you should consider your sign's illumination options at the same time, because the illumination you choose can have an effect on the sign's appearance. Some businesses want their sign's colors to match their print and other media advertising exactly. Some forms of illumination are much better than others at accurately displaying color. If accurate portrayal of your business's colors is important, you should choose an illumination source with a high Color Rendering Index (CRI) rating.
A properly lighted sign should be bright enough that it can compete with other signs in the area without being annoying. Many cities are beginning to impose limits on brightness, so before designing a sign you should check to see what those limits might be to determine whether your sign will be visible at night.
[1] Richard N. Schwab entitled Safety and Human Factors: Design Considerations for On-Premise Commercial Signs, cosponsored and published by The Signage Foundation for Communication Excellence Inc. and the International Sign Association (1998).

How to Choose a Sign Company

The on-premise sign industry is very perse with many companies specializing in a wide range of signage types and materials. Additionally, sign companies offer a variety of services to their customers, including design, manufacturing, installation, retrofitting of buildings, securing of permits, and even long-term maintenance agreements.
So many different materials and lighting systems are now available for signs that many sign companies have chosen to specialize. If you want a molded plastic sign, you might choose a different sign company than if you want a carved wood sign. If you want a neon sign, you might not go to the same manufacturer as you would for an electronic message center.
Shopping for a sign company is just like shopping for any other company. Look for signs you like and ask the business owners to tell you who built it for them. Look in a directory such as the Yellow Pages, or check out the various organizations referenced in this booklet.
It is a good idea to comparison shop, look at examples of signs the company has built and decide whether the company is capable of meeting your particular needs. Cost, quality, and follow-up service are obviously important considerations, as well as the variety of other services that may be included. For instance, securing a sign permit can be a challenge to the inexperienced small business owner; an experienced sign builder will handle this process more easily.
The materials used in a sign will greatly impact how long the sign will last and how expensive it will be to maintain. The sign will be exposed to all sorts of weather and temperature extremes. Find out how many years you can expect the sign to serve your business and factor that into your buying decision. If you expect to use your sign for many years, you will want to be sure the sign is constructed from durable materials and that you can afford to keep it in good condition. A dilapidated sign will not do your business any favors.
The important factor is whether the company can provide a quality sign that will satisfy your unique communication needs at a reasonable price you can afford.

Financing a Sign

The cost of a sign should be included in your business's start-up budget. Remember, some loan companies look for this budget item and won't issue a loan without it. The cost of your sign will depend on the type of business, the size and height regulations of your local government, and the specific design you choose.
Signs can usually be included in your small business asset loan; this includes SBA's standard business loans. If your business is already in existence, you can still finance a sign through the usual business lending means.
Sign companies typically charge a deposit of 20% to 50% when an order is placed, and require the balance to be paid when the sign is delivered. Some of these companies can finance your sign for you or help you find financing.
Leasing your sign can be a good option for a business that wants to avoid large initial expenses. By making smaller monthly payments, you can still get the sign you need. Often the increased revenue a good sign generates pays for the lease itself.
While you may not own the sign, there are leases with buyout options. Additionally, lease agreements often include maintenance.
How a sign is financed is a business decision that can only be made in view of the overall financial picture of your particular business.

Your Legal Rights

If you simply cannot get the sign you need, and complying with the city's code will leave you with an ineffective sign, it is a good idea to know some things about your legal rights. Based on numerous U.S. Supreme Court decisions, your on-premise commercial sign is protected by the First Amendment. It is speech – a civil right – and it may only be limited in certain circumstances.
The sign code must be content-neutral regulation of time, place and manner (or size, height, placement and illumination) of display. It can only control a sign's content or restrict a sign's size, height, placement and illumination in a way that makes the sign difficult to see and/or read if doing so serves a substantial government interest in a direct and material way, if the code is narrowly tailored to serve that interest, and if there is no other way to serve that interest without restricting speech even more.
The sign code must allow you a realistic and effective alternative way of communicating to your customers. The restriction cannot be based on “common sense” or subjective personal tastes. Instead, it must be based on scientific research and provable data. If you challenge the law in court, the burden of proof is on the government, not on you. If the municipality fails to prove to the court that its restrictions complied with these guidelines to protect your free speech rights, you may file a claim for a civil rights violation, and if the Court agrees, the municipality will be required to pay your legal fees and may also have to pay you damages.
Your sign is also protected by the equal protection clause of the Fourteenth Amendment, which protects you from being treated differently than others under the law. Further, its due process clause protects you from a sign code with broad or arbitrary standards, with no provision for timely decision and appeal, or that grants too much discretion to the permitting authority.

How Can I Tell If a Sign Code Is Potentially Illegal?

Here are some specific things sign regulations cannot do:
• A sign code cannot have different regulations for different signs based on what the signs say. In other words, the wording of the message and the identity of the messenger cannot be a factor in determining whether the sign will be permitted (of course, obscenity is not protected speech). An example of an illegal sign code might be one that allows a grocery store have a bigger sign than a shoe store simply because of the type of store it is.
• A sign code cannot require a sign to be so small or short, or to be set back from the road so far that it cannot be seen and/or read by its intended audience in time to stop at the business.
• A sign code cannot forbid businesses from using electronic message centers, while allowing electronic message centers to be used by the local government.
• A sign code cannot charge you sign permit fees and then use all or part of those fees to pay for a program that is unrelated to regulating signs.
• A sign code cannot allow time and temperature displays but ban other electronic messages.
• A sign code cannot require you to change the colors of your registered trademark.
• A sign code cannot regulate signs that are located inside your building unless they are intended to be read from outside.
Your mobile customer relies on your sign for guidance and information. Thus, your sign must be allowed to communicate effectively – and to do that, it must be visible and readable from behind the wheel of a moving automobile

Applying for & Obtaining a Variance

Most people going into business assume they can get the signage they need and are typically unaware they must first get a permit from their local government. Every city has its own sign code and the requirements can be very different from one city to another. Your sign professional will either know the local code or check it as part of their process in developing your sign design.
At times your business needs may require designing a sign that is not allowed to be built under your local sign code. If that occurs, you will need to apply for a variance from the sign code. A variance is a legal exception from the code Often your sign manufacturer will be able to help you through this process, though you may also need the services of an attorney.

What Are Some Reasons I Might Need to Apply For a Variance?

Some typical reasons why you might need to apply for a variance include:
1. Permitted signage would not be able to be easily seen by passing motorists in one or both directions because existing buildings, trees, traffic (particularly large trucks), or other obstructions would block it from view.
2. Permitted signage could not be seen by passing motorists in time to safely react and stop at the business.
3. Existing signs on nearby parcels would substantially reduce the visibility or advertising impact of a conforming sign on your parcel.
4. Construction of a conforming sign would block motorists’ view of the road or otherwise endanger the health or safety of passers-by.
5. Natural land features would have to be removed or severely altered if a conforming sign was constructed (such as removal of trees, alteration of the natural topography, filling of wetlands, or obstruction of a natural drainage course).
6. Variance from certain sign regulations would be offset by increased building setback, increased landscaping, or other such enhancements, so that the overall effect would make the parcel look much better than it would if the sign was built according to code.
7. A taller or larger sign than allowed by the code would be more appropriate in scale because of the large size or frontage of the parcel or building.
Be prepared to explain the reasons why you have selected the sign design you would like to build. Consult with your professional sign designer. The more the municipality understands why you have chosen particular colors, graphics, materials, and sizes, the better they will understand your need for a variance.
In the variance application, it is best to demonstrate how the request will not only help your business, but also how it is in the interest of the local community to grant the request. Show how the improvement to your property will contribute to a revitalization of the district itself and how the resulting increases in income and property value will increase local tax revenues. Talk about the safety benefits that will result from the enhanced readability of the proposed sign.

Resources

The following organizations and materials are available to help you:
SCORE (formerly Select Corps of Retired Executives)
U.S. Small Business Administration (http://www.sba.gov/starting/signage)
Your local Small Business Development Center
On-Premise Signs as Storefront Marketing Devices and Systems, by Charles R. Taylor, Thomas A. Claus, and Susan Claus