~Amy Donahue
Signage Consultant
Proving the Value of Signs
By Wade Swormstedt
I recently came across an article in which a sign salesperson responded to a customer’s very pointed question: “How do you know that an electric sign will bring people into my store?” The salesperson’s extended answer bears repeating, so I’ll paraphrase and quote from it. If I quote verbatim, I’ll put it in italics.
First, the salesman, Mr. Smith, asked the owner of the clothing store, Mr. Jones, how many people came into his store each day. Jones figured 100. Next, Smith asked Jones how many people he thought walked past his store (located on a busy downtown street) each day, between 6 a.m. and midnight. Jones figured maybe 1,000.
Smith doubted the figure was that low, but he accepted it, and then calculated that might mean 6,000 per week. Smith even conceded that many of these people probably walked past more than once, so he reduced the number to 3,000.
Next, Smith took some statistics from the latest government census and said the average household income in that community was $50,000. Smith then asked Jones for an estimate as to what percentage of that money would be spent on the type of clothes his store offered. He figured 5%, which would mean $2,500 a year, or roughly $50 a week.
So, 3,000 people a week times $50 per week would mean $150,000 a week would be spent annually by townspeople for the style of clothes Jones sells.
How much of this business are you getting? Smith asked.
Smith reiterated the figures Jones had provided: 100 people a day equals 600 per week, times $50 would mean Jones’ weekly gross would average $30,000. That subsequently means Jones’ $30,000 is approximately 20% of the $150,000 people are spending on his type of clothing.
Why are you not getting more of it? Won’t your store accommodate more customers? Can’t your clerks wait on at least twice as many more? Smith queried. The trouble seems to be that your store doesn’t offer the strongest possible invitation to the crowds to come in and do business with you. People pass by before they have made up their minds whether they want to buy from you or not. You need to tell them who you are, where you are, and what you have to offer.
You need to make the invitation so pressing, to make the suggestion so strong, that they will be impelled to come. What better way is there of carrying your message to these prospective customers than by an electric sign? Projecting over the sidewalk, its suggestive force is working when your customer is still a block away – before he reaches your entrance he has decided that he wants to buy; he comes in and the sale is made. Day and night, the sign is telling its story and extending your invitation to hundreds of buyers.
To be conservative in his estimate, Smith said perhaps the $150,000 figure was high. He was willing to cut it in half to $75,000.
This is surely much less than the actual amount of business you might get each week. But even at that, as your sales today average $30,000, there is left just $45,000 worth going after. Again, taking a safe course in our estimate, we’ll say by the use of progressive advertising, quality goods and splendid store service, you can pull in one-third of this $45,000. $15,000 worth of new business created every week!
What does it cost to get it? Practically nothing. Your rent is the same; taxes and insurance have not increased, and your clerk can sell 50% more goods without over-working. Except for one item, there is clean-cut profit on all the additional sales.
Smith calculated a 25% profit on the added sales, which would bring in $3,750 more per week and $195,000 for the year.
And to get this business and this additional income, you need only an electric sign, which we agree to furnish installed, complete, ready to turn the switch, for $7,000. Doesn’t a net profit of $188,000 justify that?
“How soon can you have it up?” asked Mr. Jones.
Truth is, this article appeared in the December 15, 1913 issue of ST (for a brief time, the magazine was published twice a month). So I multiplied the numbers by 10. And yes, today’s selling environment is much different. In 1913, there was no radio, TV or Internet. Window displays and on-premise signs dominated. And, traffic was decidedly more pedestrian, and the few automobiles moved much more slowly.
However, perhaps the value of the on-premise sign is even more important now because of the recession. Online shopping aside, all the advertising in the world is worthless if people can’t find the retail store. And yes, much more documentation exists today to prove the value of the on-premise sign, but none of it contradicts Smith’s rhetoric. The value of the on-premise sign remains timeless.
Posted on http://signweb.com/content/proving-value-signs Mon Aug 24, 2009 4:28pm EDT By Wade Swormstedt
