Excerpts From: U.S. Small Business Administration Management Assistance Number 4.016 SBA Signs and Your Business By Karen E. Claus University of California , San Francisco , California   Introduction Signs are one of the most efficient and effective communication media available to businesses. Signs are such a powerful communication medium that it is difficult to estimate the extent of their influence. Signs give information about your business and direct people to your location. Signs index the environment. This is especially true for travelers, new members of your community, and impulse shoppers who may be on a journey to purchase a particular good or service that you sell. Americans are mobile. Each year we travel over 1.7 trillion miles by automobile and approximately 19 percent of us change our place of residence. A primary source of customers for your business is the large number of people who are new to your community or who may be just passing through. Your sign is the most effective way of reaching these potential customers. Signs Are Street Advertising •  The street is where customers are. The message conveyed on the street reaches people who are close enough to make a purchase. •  Street advertising also helps people develop a memory of the products and services you sell. People tend to buy from businesses they know. •  A sign can appeal to a given group of potential customers. If you have a particular market segment that you wish to attract to your business, your sign can be an important means of bringing these people in. 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 are 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 seven days a 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. There is no better advertising dollar value than your on-premise sign.   Studies of Advertising Values and Effectiveness 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. The advertising tool used to convert your location into cash is on-site signage. On-site signage can, relative to its cost, have an extraordinary influence on the success or failure of a retail business.

Generally, five separate advertising media are available to retail operations. These are newspapers, radio, television, direct mail, and signs. By using standard indicators developed by the advertising industry it is possible to make reasonably accurate comparisons between the various media. Measurements of the advertising effectiveness are: Market Coverage or Reach; Frequency or repetition of the message; Cost per Thousand Exposures; and Readership or retention of the message.

The National 3/M Company conducted a definitive research study covering the effectiveness of advertising media for retail use. The study leaves little doubt that on-site signage delivers more market coverage with a higher degree of readership than any of the other media. Also, it does this at an astonishingly low cost per thousand exposures - and at the very point of sale!

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 twenty cents 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.

A great deal of the tremendous cost effectiveness of on-site signs is due to their long life and to their placement on property valued for other than advertising purposes. Since the use of the business location is free for the taking, the user of on-site signage limits expenditures to the cost of the sign. Because of the durability of signs, this expenditure is low since the cost is spread out over years.