Why Sign? Why use Signage? Are signs a worthwhile investment?
Good quality, innovative signage is not cheap. In fact, if truth be told, good quality, effective and innovative signs can be quite expensive.
SignForce recently had a prospective client ask for a quote and artist impression so he could get a rush job done. The rush is all on his side. When we quoted what we believe is a very fair price, the prospect came back to advise SignForce that his previous supplier would do the work for 1/5th of the price.
When the SignForce price was reviewed it was found to be fair and realistic.
Historically and on average – average being VERY IMPORTANT as this is the median on a bell graph where there can be a drastic variance between the most costly and the least costly signs – which means an average can be extremely misleading – the higher the overall cost and selling price of a sign, the lower the contribution from material alone.
On AVERAGE material cost ranges from around 7 to 10% of the TOTAL SELLING price of a sign. This means that if the material cost X, the final cost will be between 10X and 14X. That is 10 to 14 TIMES more than the cost of the material!
This may seem excessive and even irrelevant, however when someone gives – ok lets say provides to be politically correct – your business with a sign for material at say cost or even cost times 2 or 3 or even 5, especially for a small sign, the chances are the supplier is running at a loss.
Lets look at an example.
Lets say the prospect is quoted R350 for a sign where the material realistically costs R141– assuming the material is delivered – and the supplier is effectively charging around 2.5 times the cost of material. One could argue that the material will not be fully used so there is a possibility of some material being added back to stock. HOWEVER this is only a POSSIBILITY. What happens in the event of unexpected or unplanned #loadshedding when the vinyl is almost completely cut and is lost and needs to be recut – these events need to be budgeted for.
What costs are involved in making that R350 sign? I am using this number as this is what the prospect told us he was prepared to pay. The material – bought per running meter – cost R141. This is material that has not been cut. The material has to be cut – this means someone has to program a computer program that then needs to talk to the digital cutter. The vinyl needs to be placed into the cutter, setup and checked. Guess what, all this takes TIME.
Once the vinyl has been cut it needs to be what we in the signage business refer to as WEEDED. Weeding is the removal of the excess vinyl from the cut vinyl – sadly signage has a HUGE amount of waste – and then the vinyl needs to have application tape applied to it. Application tape is tape (paper or vinyl) that allows the vinyl (sign) to be applied to the final destination – be it metal or glass or Aluminium or whatever. Guess what, this is a MANUAL task that, being manual, requires TIME, and as importantly, can easily be result in the sign being ruined, requiring additional material to be cut and weeded.
At this time we are not allocating any COST to the TIME, however at SignForce we firmly believe that salaries need to be fair for EVERYONE because we are all in this business together and thus we all share in any profits. The point here is TIME cost MONEY, and this is not yet been accounted for, and the SignForce staff are paid a fair, living wage.
Once the vinyl has been weeded and application tape has been applied to the weeded vinyl, the vinyl needs to be applied to the final surface. Now in the case of this specific prospect, the final destination of the vinyl would be approximately 15 kilometers away. That is a one way trip. Now a 30 kilometers return trip in terms of current fuel costs works out to approximately R65.
This puts our cost at R141 plus R65 equaling R206. Add to this the cost of parking at R10, we are looking at a cost of R216. This means that selling the sign at R350 means there is, at BEST, a contribution of R144.
R144 may look fantastic if one only compares it to the flat cost of the material. HOWEVER, when one INCLUDES the cost of TIME – and when one considers that this small sign would take approximately 25 minutes for artwork, another 5 – 10 minutes for possible changes and revisions the prospect may require. About 20 – 40 minutes to cut and weed and applying application tape, as well as approximately 30 – 60 minutes to get to site. So we are in for approximately 2 HOURS – at a massive ‘PROFIT’ (PLEASE NOTE – IT IS NOT PROFIT BUT CONTRIBUTION – of R72 per hour.
This R72 per hour needs to pay for lights and water, time for staff, insurance, mess-up’s, coffee, toilet paper, soap, telephone AND all the other little (non existent?) costs that are necessary to run a business.
The point of this blog is that while as a customer you are entitled – in fact almost OBLIGED – to take the BEST COST option for your business. This means that if you believe the cost effective solution would meet your needs almost as much as the most expensive solution, (ALMOST as you do expect some variance if one is six times more costly than the other), YOU WOULD (of necessity) go for the most cost effective solution.
Of course this makes the supplier that is awarded the work very happy as they now have some income. What they are not necessarily aware of is that THEY are in fact PAYING for YOUR SIGN. This means that they are losing money. It may be a little at a time, but as soon as the supplier gets a LOT of orders, they will lose a LOT, possibly even too much money.
Time for another example.
Lets say the signage company makes a loss of US$1 per sign sold. That is not necessarily a lot when one sells one sign a day. But what happens if they sell 1,000 signs in a week. Suddenly they have lost US$1,000 that week. It adds up and gets very costly.
What the small loss means is that when something goes wrong, or when you want to get a second sign, you, as the buyer, are either put out when the supplier has to more than double their price – a natural reaction because you have a base price and suddenly that is lost in the wind – OR the supplier simply never comes back. The supplier is happier to weather the bad PR than to come back because they simply don’t have the funds to come back.
The reality is WELL MADE, QUALITY SIGNS can be COSTLY, but COSTLY is RELATIVE.
Relative is simple. If you get a quote for X and a second quote for 100X, 100X is expensive relative to X.
On the other hand, if the 100X sign lasts 5 times longer and brings in five time the feet that result in turnover of 1,000X, is the sign still relatively expensive?
Or, from a different point of view, if the 100X sign saves you TIME and cost on marketing, is the sign relatively expensive?
A short survey revealed that MANY small to medium businesses STRUGGLE with marketing. They struggle with the time marketing takes. They STRUGGLE as much with finding relevant content to market with.
EFFECTIVE signs and signage are the most COST EFFECTIVE marketing tool I know of.
Why is effective signage the most cost effective tool? Very simple.
An effective sign needs a once off payment – you can change your sign as often as you like or as often as your budget allows, but – that once off payment will get you a sign that will last for approximately three to seven years, with NO EFFORT on your part and no additional cost after the first payment.
Effective signs are wonderful marketing tools because they TELL or SHOW prospective CLIENTS WHAT you do and HOW you do it? What would the cost be to get a PERSON to do this same work, 24 hours a day, 7 days a week for over 500 weeks?
Effective signs are then best marketing tools because they never complain. They never let you down and they are ALWAYS ready to work. Please tell if this can apply to ANY of the people you employ – even if you are a one man show and you only employ yourself. We humans NEED to sleep!
Effective signs allow prospective clients, prospective patients and anyone who VIEWS the SIGN to know where the business is located – well at least in most cases.
Is it fair to expect a business to sell you a sign at a loss. No!
Are you wrong to buy the cheapest sign you can – No, BUT this depends on a number of factors such as quality, lifespan, pleasure – or otherwise – of dealing with the supplier, and what, IF ANY, other benefits there are to dealing with a specific supplier. BENEFITS can include advice, QUARANTEES, proximity, ability to come back to fix errors and possibly a number of other benefits.
If you are in the market for quality signs from a reputable sign business that charges a FAIR price for the signs they produce and will come back when necessary, contact SignForce and lets see if we have enough common ground to forge a mutually beneficial business relationship – in other words, let SignForce advise and quote your business on the effective signs you want.
Contact SignForce now on firstname.lastname@example.org or call SignForce on 27 (0)11 440 7525 or WhatsApp SignForce on +27 (0)82 558 6413.
Find out more about SignForce by visiting the SignForce website at http://www.signforce.co.za