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Why You Should Outsource in This Uncertain Economy

Posted on July 5, 2011 by John Baylis

What will this economy bring tomorrow?

If you’ve asked yourself that question recently, you are not alone. You’ve probably come up with the same answer as everyone else: I don’t know. What I do know is that some big question marks are still out there. We are not out of the woods yet.

For example, first quarter 2011 US GDP growth was a meager 1.9%, compared to 3.1% for 4th quarter 2010. Opinions vary on what the second quarter will bring (that data is released on July 29), but the overall sentiment seems to be one of caution. The Wall Street Journal recently polled its readers about the “strengthening of the US economy in the second half of this year”. 73.7% of their readers did not feel the economy will strengthen in the second half.

Other factors include persistently high unemployment (another high report last week of 428,000 jobless claims), and fluctuating gas prices. Make no mistake – this continues to be a tough economic environment.

Given that situation, is this a favorable time to ramp up your production level and add new personnel? Or is it a time to outsource at least part of your production? A while back, our e-newsletter reviewed some of the direct and indirect costs associated with internal sign production. This seems like a good time to review those facts.

Internal production costs include:

Higher payroll – Increasing your production capacity can mean adding personnel to staff the production equipment. That can add a significant layer of additional costs.

Your Time – Your time is valuable. So is your employee’s. What is your cost for the time spent on purchasing raw materials? Purchasing means spending time on negotiations, making and receiving vendor phone calls, placing the actual orders, and sorting the delivered materials into inventory.

Inventory – Where are you going to keep all of your raw materials? And who does the accounting for how much you have of each necessary component, and is responsible for reminding you (or your ordering employee) when a component supply needs to be refilled? We’re talking both time and floor space here – a double cost.

Manufacturing Errors – This one is particularly costly. Suppose you are making a channel letter set, and your shop produces the wrong face sizes. By the time you realize the mistake, the faces are finished and the trim caps have already been applied.

You know the nightmare that kicks off at that time. You must use new acrylic sheets to make the correct size faces (hopefully those sheets are in your stock; otherwise you may pay an additional charge for an emergency delivery.) Then, all of the trim cap must be re-cut and re-applied. The bottom line? Goodbye profit.

This does not occur with a quality outsource partner. If they make a production mistake, that is their problem – not yours. Your product cost is FIXED.

Worker’s Compensation – This cost obviously varies by state, but over time it can add up to a considerable piece of change. Particularly if you produce in a state with one of the higher worker’s comp rates.

Inventory Again – How much cash do you have tied up in unused raw material inventory? If you have some raw materials that are gathering dust, that cash would be better used elsewhere.

Your Time Again – How much more product could you sell when you get rid of the time spent on all of the above activity? Your sign business makes money when you and your employees are selling – not when you are spending time managing people, materials and machinery. Outsourcing your production opens up your selling time – which is something you need more of in this slow economy.

The bottom line: is this unpredictable economy the right time to be adding to your payroll and production capacity, or is it a better time to outsource at least part of your production? A quality outsource partner can be a great asset in this time of economic uncertainty.

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Which Sign Format is Best for Impulse Businesses?

Posted on May 26, 2011 by John Baylis

Your prospect is building a new car wash, and she is asking you for the most effective sign design for a “business of this type.” What do you tell her?

You know one thing immediately. A car wash tends to be an impulse purchase. So what features should an “impulse purchase” business sign (channel letters or otherwise) have?

First, remember the definition of an impulse purchase. It is an unplanned (or spontaneous) consumer transaction. Impulse purchases tend to be made when a consumer has left their household for another reason, but then make an impulse purchase during the trip.

What are some impulse business types? Here are a few:

• Car wash
• Convenience store
• Bar
• Fast food restaurant
• Service/gas station
• Value hotel/motel

What do you tell your prospect? First and foremost, an “impulse business” sign needs to be quickly readable and understandable. The sign must telegraph the product or service offered without delay. A sign that is unclear for any reason is a huge negative for an impulse-oriented business.

So, an impulse business sign is not a time to get “artistic.” Your initial meeting is an excellent time to tell your client that their sign needs to be a simple and straightforward communication tool. If the business is dependent upon drive-up traffic (instead of foot traffic), then the design must also give the driver sufficient notice time to pull over and make the turn.

What other features can help an impulse purchase sign to be effective? A graphic or symbol that quickly identifies the item sold. For example, a fast food restaurant sign could include a hamburger or hot dog graphic. A car wash might have an image of a sparkling clean car.

One other feature that may help your client’s sign is a single short copy line stating the business name and product/service offered. Such as “Steve’s Grill – Denver’s Best Burgers.” AND THAT IS IT. No fancy scripted fonts, no tricky color combinations, no additional copy. More sign features and copy may be OK for another business type – never for an impulse purchase business.

Last, what other piece of content MUST be included on the sign? Your client’s logo. A logo is the “puzzle piece” that ties together your client’s entire marketing communications program including print, internet, business cards, letterhead, etc.

With these ideas in mind, which of these two signs do you think is more effective?

What is your fast design summary of an effective impulse business sign? It has:

• An easily readable font
• Primary word(s) state the product or service offered
• Clear and distinct letter to substrate contrast (channel letter signs are an excellent option)
• Minimal copy
• Company logo
• (For road signs) Font size large enough to provide sufficient driver notice time
• (Optional) Graphic indicating product or service offered

Using that list will give you a satisfied client who will come back in the future. Then you will further grow your sign business and get more referrals. Life is excellent.

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Which Sign Color Combinations are the Most Effective?

Posted on April 26, 2011 by John Baylis

You already know that a sign must have acceptable contrast to be effective. But what are the best color combinations for both contrast and legibility?

Check the chart below for a fast reference* (click the chart for an enlarged version.) Using these sure-fire sign color combinations will keep your client coming back to you for other signs. These combinations are applicable to all signage types – not only channel letters.

Sign Color Combinations
(Click the image above to see a larger version)

Note one simple and consistent combination theme: contrast. Each letter set has a clear and distinct contrast from the background color.

Also, picturing the chart background color as the building façade color is helpful. Then it is easy to select the correct combination. That puts you right in the effectiveness “kill zone” – you know the colors you’ve chosen for your client’s sign will work.

Note also that many of these combinations involve the colors yellow and/or red. As we covered in last month’s e-newsletter, those are high wavelength colors which are also more legible to older adults (see last month’s post for color wavelength information.)

Use this chart to make your client’s sign more effective. That will ensure future business from that client, and also encourage referrals.

*Claus, K.E. and Claus, R.J. Visual Communications Through Signage. Volume 1. Perception of the Message. Signs of the Times Publishing Co. 1974.

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Which Sign Colors are Best for Older Adults?

Posted on March 29, 2011 by John Baylis

Your client just said “our new business is targeted to older adults. So our sign needs to be easily legible to someone in that age group. What colors do you recommend?” What is your answer?

There is a difference in the way you should approach this project. Older adults have vision issues from aging. That impacts which colors you should use.

First, keep in mind that signage color combinations of blue and/or violet (and their derivative colors) are more difficult for older drivers to read. This applies to all signage types – not just channel letters. This is because the human eye has a decrease in visual sensitivity to shorter wavelength colors as it ages. As stated in Taylor’s book, “Combinations of colors that vary primarily in how much blue they contain create a great deal of difficulty for older drivers.”1

Blue and violet are lower wavelength, so the older adult has more trouble discerning them (see chart below.) Also, as a person ages the eye’s lens tend to focus on the middle and higher color wavelengths, such as yellow. Blue can be used as one color in the sign – but do not make the entire sign a mix of blue and/or blue derivatives. That is asking for trouble.

Another factor is that older adults’ eyes are slower to adapt to changing light conditions. That makes their eyes more sensitive to glare. Last, the older eye sees all colors as dimmer, so colors that are only moderately bright will be seen as dull.2

That also means a sign with a light background may be more difficult for an older adult to read due to the glare produced by the light background. Dark backgrounds are easier for the older eye to read against (sometimes you can’t control this – like when you are mounting a sign on a building with a light façade.)

Here are a few sign color combinations that would be more difficult for older adults to read:

• Green and Purple
• Turquoise and Green
• Blue and Gray

So what are the best sign color and font combinations if your client business is targeted to this group? Play it straight and keep it simple. Here is a set of combination possibilities:

• Bright white on Black
• Bright yellow on Black
• Bright Yellow on Dark Blue

Like this:

For channel letters, a simple choice combination would be a yellow face on a black return. Another possibility is a white face on a dark blue return.

The moral of the story is: a sign targeted to older adults is not the time to get overly creative with colors and fonts. Doing so will impact the sign’s effectiveness in a negative way.

1. “On-Premise Signs as Storefront Marketing Devices and Systems”, Charles R. Taylor, Thomas A. Claus and Susan L. Claus. Pg. 8-13.

2. Ibid, Pg. 8-13.

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How I Sold More Signs to a New Business

Posted on February 23, 2011 by John Baylis

What is the best advertising media for a new retail business?

With the economy (hopefully) improving in 2011, more new retail businesses will be started. One of the items on top of any new business owner’s list is generating initial location and business type awareness. Which marketing media should they use? Direct mail, television, print, the internet or signage? Or all of the above?

Depends on who you ask. But this is where statistically significant research data can help your sales presentation. Check out this new customer survey data.

One sign company summarized a series of new customer surveys done in 1997. The survey was restricted to people who had just purchased at a business for the first time, and it was done only at businesses that had installed a new sign 30 to 45 days before*. The survey question was “how did you learn about us?”

This list sums up the responses:

Their Sign 50%
Word of Mouth 33%
Newspaper 9%
Yellow Pages 6%
TV 1%
Radio 1%

These survey results are a testament to the awareness and traffic generating capacity of quality location signage. What better way for a new retail business to get a fast start?

Here is another key fact to remember: Around 16% of an average US Metro population relocates every year. This new resident population needs to be made aware of nearby businesses. Signage is an efficient and effective media for generating this awareness.

Plus, even current customers need to be reminded of a business’ existence. A business owner cannot assume that people will keep a business “top of mind” simply because they have visited a location once. The average American is overmarketed to the point that they simply “tune out” much of the advertising they see on a daily basis. This is where quality signage can help – it provides an “existence and product reminder” each time someone drives by.

The point is this: if your prospect is starting a new retail business, signage is where the bulk of their marketing budget should go. This is particularly true if the business product or service is usually an impulse purchase. Such as:

• Fast food
• Service/Gas stations
• Value hotels/motels
• Convenience food markets
• Car washes

So you have an even stronger signage argument if the new business sells an impulse product or service. However, the argument is still valid for other business types as well. Any viable business that depends on foot traffic must have a continuous awareness generator. Signage performs that role admirably.

*Charles R. Taylor, Thomas A. Claus and Susan L. Claus, “On Premise Signs as Storefront Marketing Devices and Systems”, page 4.6.

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How to Get That Extra Sign Sale

Posted on January 19, 2011 by John Baylis

You’ve heard all the standard objections to adding an additional sign to a location. Like “My customers already know where we are”, “I think our current sign is enough” or “I don’t think an additional sign would generate much new business.”

How do you get past those objections? Here is one method that can help – and it involves just a few quick calculations. This is an excellent sales approach for channel letter signs.

First, get one key fact when you make your sales call. What are the current gross revenues of the prospect’s business? Make sure you get that essential piece of information. If your prospect will not provide that number, make your best educated guess.

Then, make a few simple calculations. The University of San Diego’s “Economic Value of On-Premise Signage” study* says the addition of another on-site sign typically results in a 4.75% annual gross revenue increase. Take the prospect’s gross revenue figure and multiply it by .0475.

Take the result of that calculation, and divide it by the sign price – that gives you the number of times in a year the new sign would pay for itself (in gross revenues.) Then take the number of days in a year, and divide it by that number. That gives you the number of days it will take for your proposed sign to pay for itself in increased gross revenues.

Check this brief example:

Your proposed sign price: $3500
Your prospect’s annual gross revenues: $472,786

$472,786 * .0475 = $22,457 = Estimated annual gross revenue increase from adding an additional sign

$22,457/$3500 = 6.42 = the number of times a new sign will pay for itself in one year

365/6.42 = 57 days = the number of days it will take for the new sign to pay for itself (in gross revenues)

So your new sign pays for itself in 57 days. Less than 2 months after your sign is installed, your prospect is money ahead. That information should make this a much easier decision for your prospect. Use this to differentiate your proposal from the other sign companies bidding on this project.

*Contact us for a free copy of the University of San Diego’s excellent “Economic Value of On-Premise Signage” study.

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Fire Your Channel Letter Vendor!

Posted on December 16, 2010 by John Baylis

Making signage sales has never been more difficult. As a buyer at the retail level, you have every right to expect top quality for each wholesale sign you purchase. What is your current vendor doing to make sure you receive that quality?

Here are three items to check:

LED Brand Selection

When you buy an electrical sign using LED illumination, how is your vendor selecting their LED brand? Do they have a favorite “house brand”, or do they simply choose the lowest price? Either of those can spell trouble for you in the long run.

Almost all LEDs light well when they are new. What matters for your customer’s sign is the long term LED performance.

Here is what we do. We’ve set up an independent LED testing lab that operates 24/7/365. We’ve set up LED degradation chambers to assess the performance of each LED brand (see photos below.) We then compare the manufacturer’s claims to the actual performance. Only the brands that show a vibrant long-term illumination performance are selected for use in our channel letter signs.

LED Testing T Wall
The “T-Wall” in the DSW LED Testing Lab

If your vendor does not conduct independent LED testing, you may be in for an unpleasant surprise. We’ve found that many well-known LED brands are not necessarily strong long-term performers. Our lab gives us street level insight into “real world” LED performance. No other signage manufacturer offers you that service.


Some of our LED Degradation Chambers

UL Listed Components

Second, does your current vendor insist on using only UL listed components in your sign? If not, they can use any component– regardless of the quality level. Often, that component is chosen only on the basis of cost.

As a vendor of wholesale channel letters, we use only UL listed components which are an essential ingredient for manufacturing a long lasting, rugged sign. Add in our streamlined and lean manufacturing processes, and the result is a high quality, long lasting channel letter set.

Standardized Processes

Last, does your current vendor use standardized manufacturing processes? What “standardized processes” means is that each manufacturing task is performed in the same quality-oriented manner each time.

For example, take the task of wire crimping. A wire can be crimped by any tool that squeezes. If someone incorrectly uses a standard crimper (or uses any other tool) to crimp a wire, that can result in an incomplete crimp or a compromised splice.


Standard Wire Crimper – Not for standardized process (open to operator error)

What happens then? An unfavorable chain reaction. A poor splice can lead to bad wiring. Bad wiring can then result in one or more of your channel letters going out. Then, you have to spend time in the field tracking down and fixing the issue. As you know, a letter set has many electrical connections – it takes only one poor connection to “bring down the whole ship.”


Unidirectional Ratchet Type Crimper – Standardized Process Tool

Here, we always use standardized tools for each task. For wire crimping, we use a unidirectional ratchet type crimper that is marked on the crimping side. The marked side is always used to make the splice. No variance is permitted. The ratchet type crimper we use ensures that the proper force is consistently applied to each and every crimp. The design of this tool will not allow over or under crimping. This consistently results in a complete, uniform crimp, each and every time. That is a standardized manufacturing process.

Is your wholesale signage vendor doing these things for you? Why not insist on this level of quality control?

In today’s tough signage sales market, your vendor of wholesale channel letters (and any other wholesale sign) should have a strict level of quality control. If you are not receiving it, you are opening yourself up to future problems, which leads to “go backs” and, worst of all, fewer referrals.

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A Great Way to Increase Your Signage Revenue

Posted on November 29, 2010 by John Baylis

What is a great way to increase your signage revenue?

The answer is to make your customer’s primary sign highly effective. By a “primary sign”, I mean the main outdoor sign – the sign that drives the location awareness and foot traffic.

How do you do that? By making sure the sign has conspicuity. As we covered in the 8/30 post, one conspicuity factor is the recognizability of forms and shapes.

What is another component of this recognizability of forms and shapes? The letter kerning. Kerning impacts the reader’s ability quickly to read a sign – and make the “stop or not to stop” decision. To put it another way, kerning impacts a sign’s legibility, and the legibility then impacts a sign’s overall conspicuity and subsequent effectiveness.

How big an impact can kerning have? Consider the following examples:

This overly tight kerning makes a sign more difficult to read. The tight spacing almost makes each word look like a single object.

Here is the same sign with a different issue:

Too much space between letters also makes a sign less legible. Can you read it? Sure. Is it more difficult to read than correctly kerned letters? Yes. Why make your customer’s sign any less legible?

Now check this example:

Correctly Kerned Channel Letters

These letters are correctly kerned. Which of these three examples is easiest to read (particularly if that reading will be done from a car?) Which is quickest to read? Think also: if this were your business, which of these signs would you want?

Also, remember that kerning and tracking are not the same thing. Tracking is the adjustment of space for groups of letters and entire blocks of text. Kerning is the adjustment between individual pairs of letters.

So what can we observe here? First, if you are producing the signage artwork for your customer, remember not to trust the default software kerning settings. Manually adjust the kerning until the letter spacing is perfect.

If the customer has provided artwork with a visible kerning issue, it is your responsibility to point that out prior to producing the sign. If the customer insists on making the sign “as is”, that is their choice. You’ve done your job.

The result of good kerning (and the subsequent legibility, which helps with conspicuity) is worth it (as a vendor of wholesale channel letters, we are particularly careful about this issue.) Small adjustments can make the difference between a sign that just looks good, and a sign that looks excellent. An excellent sign will produce results for your client – and grow your business by bringing them back to you for other signs.

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4 Excellent Signage Sales Questions

Posted on October 27, 2010 by John Baylis

What is the first question you ask when you receive a signage sales inquiry?

Is it “what kind of a sign are you looking for?” Or maybe “when can I drive out to check out your site?”

Those aren’t bad questions. But you can ask better ones. Questions that help you to quickly determine if this inquiry has a good chance of resulting in a sale, and how much of a sale may be involved. Since we sell only wholesale channel letters, we often ask filtering questions such as these.

Here is one of those questions:

“Why did you decide to buy signage now?”

The answer to that question can be a real eye-opener, and can quickly clue you in to what sales might be made here. For example, if they answer “well, this is a franchised business, and the franchisor site development plan says we need to install channel letters at this point in the construction.”

Good to know. That means the signage for their location is probably already designed, and the production files will probably be ready to go as well. You also know this could be a multiple-sign sale.

Here is another good inquiry question – this one assumes the prospect said “we need another sign on our building.”

“How did you choose your current signage?”

That question helps you “peek under the covers” for their original decision making process, and will also give you an idea of who makes the decisions at this company.

Or, suppose you hear this from an inquiry: “We want to make this location easier to find, so we want an additional sign.”

Then, what is your follow up question? How about:

“OK, I’m sure that’s true that you want your location to be easier to find, but how did you decide that an additional sign was the way to do that?”

Again, the answer to that question can yield some useful information. For example, the prospect might say, “well, a friend of mine had the same problem with his business, and he said adding another sign really helped. In fact, I’d like for my new sign to be the same type as his. I have a picture of the sign he got if you’d like to see it.”

Isn’t that good to know? Then you know much more about the type of sale this could be, and whether you would be able to help this customer. The prospect’s answer also may keep you from wasting time – he may be looking for a type of sign you don’t handle.

Here is another good one:

“How are you going to decide which signage proposal you’ll accept?”

The answer will tell you their priorities. If they say “well, we want a reasonable price, but we are mostly concerned about quality. We want this sign to last for a long time, so quality is our main priority.”

What happens then? You know your proposal had better stress product quality. Your competitor may not know that, so you have an advantage from the beginning.

So keep on asking questions when you receive an inquiry – they can give your proposals a “leg up” on the competition.

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LED vs. Neon in Channel Letter Signs

Posted on September 28, 2010 by John Baylis

You just told your customer about the illumination options for her new channel letter sign – neon and LED. She immediately asks “which one is better?” What is your fast answer?

Here are a few helpful items. Some of LED illumination’s potential advantages over neon are:

• LED is less fragile. Neon tubes are much more susceptible to breakage both in transit and during installation.
• LED can mean a lower utility bill for your customer. LED is a more efficient light source, and the electrical transformer is smaller.
• LED is a more focused light source. An LED module produces a “cone” of light, where neon illumination is emitted from all sides of the neon tube (this can also be a disadvantage for LED, as noted below.)
• Installation of an LED channel letter sign can be easier, as it does not always require conduit on the secondary side.
• LED is a more environmentally friendly product. Neon tubes often contain mercury.
• LED is safer to install, service and maintain. LED is typically powered by 12 volts DC, where neon is powered by 4,000 – 15,000 volts AC. The high voltages required by neon present a significantly higher electrical hazard potential.

However, with all of these differences, neon still has its place. Here is where neon illumination can be better:

• Neon illumination has a certain warm glow that many think LED has yet to match. This is particularly true for reverse and front/back lit channel letter signs. Neon’s 360 degree illumination is very easy on the eyes when used with front/back lit letters. LED’s focused “light cone” is not as good with these letter types.
• Some custom colors can be better matched with neon. If your client is concerned about a specific color match (such as a logo color), neon may be a better choice.
• Open face channel letter signs still require neon – LED is not yet a viable option.

So, the short answer to “which illumination source is better?” is that it all depends on the project at hand. LED and neon are completely different illumination sources, each with their own advantages and disadvantages. Review your client’s proposed sign project specifications prior to answering that question, keeping the above list in mind.

Posted in Signage illumination info | 10 Comments