As with any new business or enterprise, you likely took the time to determine the best location to set up shop. We’re all familiar with the oft repeated quote, “Location. Location. Location.” And no doubt, you had a list of requirements in mind:
- Is it a safe area, so that the odds of theft or property damage are low?
- Do the demographics of the local population match up with the products or services that I’m selling?
- Is there enough foot or vehicle traffic that people will even be around to patronize my business?
That last one was probably particularly important to you. And it’s a very valuable question to ask, both in terms of establishing your business AND in terms of investing in signage.
Because signage IS an investment. You’re purchasing something that, ultimately, should help increase your revenue.
So how can the flow of vehicular or pedestrian traffic affect that? And how can you get the data to back it up?
Don’t worry - Signdealz has been helping our customers determine the best placement of their signage for years. Whether your business is located in a building, a shopping center, or on a lesser used street; we can help you place your signage where it’ll be most effective.
Unfortunately, it can be a little tricky to draw a straight line between your signage and your bottom line. But there are ways to get an idea as to whether it’ll be beneficial before and after you invest and that’s what you’ll learn here.
If your location gets a good amount of foot traffic, signage closer to your storefront could help catch the eye of nearby shoppers. However, if your storefront is set back from sidewalks and streets, larger signage could help draw people in.
Quantify the Amount of Traffic Around Your Location
You’d be surprised to find just how much data there is available to help business owners (both big and small), determine the amount of traffic they can expect at a location before they even rent out a storefront.
You can use IdealSpot to find out what the Average Annual Daily Traffic looks like in front of a business location.
And sites like SafeGraph and Location Genius which provide data to help businesses determine the value of a specific location based on the amount of foot traffic in the area.
How to Gather Data About Incoming Customers
It’s incredibly useful for businesses to count the number of people coming into your location. If you’re imagining having to operate your business while also standing by the door to mark down each individual who comes in, you’ll find that technology is readily available to help.
These days, people-counting devices are compact and easy to use. They’re typically installed just above entrances and can identify how many people are coming and going.
You might consider taking a look at Dor, a thermal-sensing, battery operated device with a sleek look and software that can be used across multiple devices.
Density is a similar offering. Primarily marketed as a safety device to determine how many people are in a space at one time, it can also be used to track shoppers coming and going from businesses.
Once you’ve gathered some early data about the number of people visiting your location, you can set some benchmarks to help you measure any increases after signage is installed.
How to Determine the Effect of Your Signage
Now that you’ve had a new sign designed to reflect your brand, manufactured by highly skilled experts, and professionally installed; you can start tracking the results.
If you’ve installed a people-counter, this should be fairly simple. Is there an increase of visitors over time, after your signage installation?
Or, perhaps you’re running multiple campaigns in order to draw in more customers. In that case, you might go with the good, old-fashioned method of asking, “What brought you in today?” In many cases, you’ll find that visitors may not have even known your business was here.
Lastly, since we’re taking the time to really determine ROI, the most important thing is taking a look at your sales numbers. (Keep reading to find out how to calculate the value of customers as a result of your signage).
Some Data Tools to Use with LED Signage
If you happen to have invested in LED signage that can be regularly updated with new messages, you have an additional advantage when it comes to not only increasing your customer base, but also when it comes to tracking those who reach out to your business as a result of your signage.
For example, an LED sign with a high enough resolution could include a contact number that potential customers can call. If you’re using a call-tracking service, such as Call Rail, you can utilize a specific phone number JUST for your signage. Whenever an individual calls that number, Call Rail will immediately log it and direct it to your primary business phone. With Call Rail’s tools, you can get an idea of who’s contacting you specifically because of your signage.
Calculate the Value of New Customers Against the Cost of Your Signage
You may already be calculating your “CPA” or “Cost Per Acquisition.” As this metric can be a big help in determining the average value of your customers vs the expense of advertising or marketing efforts.
Luckily, it’s a simple enough formula:
Total Cost of Spend for a Media Campaign (i.e. your signage) / Number of New Customers that have resulted from that campaign = Cost Per Acquisition.
Here’s a simple example:
Say Sam spent $35,000 on a new pole sign for his auto repair shop.
As new customers came into his shop, he asked how they’d heard about the business.
Now, let's assume that over the course of the year, 42 customers mentioned his signage as being the first or last thing that caused them to select his shop for repairs.
Now, say that those 42 customers spent a total of $52,400 on repairs.
$35,000 / 42 = $833
Sam spent $833 to get each of those new customers.
However, those new customers spent $52,400 on repairs, effectively covering the cost of Sam’s new signage AND resulting in a profit of $17,400 from those new customers.
And keep in mind that quality signage is going to last a while and will continue to keep working (including on evenings, weekends, and holidays) to bring in new customers. If that same sign results in the same amount of new customers every year for an additional 4 years (remember, Signdealz offers a 5 year warranty), the total CPA drops to $166 per new customer.
So, Does Traffic Really Affect Signage ROI?
The more traffic around your storefront; the higher the odds of people discovering your business.
If your business has clear and inviting signage, those odds increase even more.
And the more people who visit your business; the more revenue.
Now you know how to track incoming customers, determine how many new customers your signage brought in, and how to calculate the ROI of your signage purchase.