Thursday, October 18, 2012

Short Term Gain - Long Term Cost: The Direct and Indirect Costs and Effects of Poor Quality LED Signs on Business

When an organization is looking for a new LED sign many of the same common factors apply as any major purchase, like a car or the latest HD television. What is the best product? What is the best value for the money? Who is the best manufacturer? Who has the best support? For items such as cars and televisions, consumer reports, websites and reviews are abundantly available to assist the buyer. Unfortunately, these types of resources are not as common in the LED sign industry and the buyer is sometimes left to decide based on limited information and eager salesmen.

Many are convinced to buy a cheaper, inferior product with the promise that they are “buying direct” or “getting the same sign, for ½ the cost”.  Some are even convinced that it’s worth buying a cheaper product, because the price is so good that they can just buy another one if it fails in 2 years. Unfortunately many have learned the hard way that there is no such thing as an “LED-Mart” where you can get cheap prices and reasonable quality product.

Poor quality LED signs do not just stop working after 1-2 years of operation. They break down continually as a function of their poor design and materials. This costs you time, money, reputation (see Deacon's Post) and a constant worry about the street image of your business or organization. Lets look at some of the actual costs for a poorly manufactured LED Sign.

Service Costs:

Signs are not like smart phones or cars. You can’t bring them into the shop, or ship them back to the manufacturer for repair. These are permanent fixtures on your property, and they are usually high off the ground requiring a bucket truck for access.

Some of the average rates for service are:

  • Standard bucket truck w/ technician: $150 per hour, 2 hr min.
  • Extended bucket or crane w/ technician: $250 per hour. 2 hr min.
  • A typical service call to troubleshoot a sign will take 2-3 hours: $450 - $750
  • A second trip to install parts usually takes 1-2 hours: $300 - $500

So you are potentially spending: $750 - $1250 per incident. If you’re servicing a sign just 5 times a year you looking at a yearly cost of $3750 - $6250, this adds up to $18,750 - $31,250 over five years. Rates and repair times do vary, but even conservative estimates add up over time.

But what about manufacturers that offer a labor warranty to cover these costs? The effectiveness of a labor warranty is highly dependent on the company that issues it. If they go out of business or are slow to respond to issues, you're stuck with a disabled sign and sometimes have to cover the costs anyway. A good labor warranty should be insured by a third party and the manufacture that issues it must be financially strong and in it for the long term.

Indirect Costs:

Your time is money. Time spent coordinating service calls, troubleshooting the sign, and navigating through poorly designed software costs you money in the long run. It’s hard to quantify the actual dollars lost, but the fact stands that a small business owner who is spending time fixing a sign, is not spending time making money for the business.

Visual appeal is important for any organization or business. When you buy an LED sign you are investing in it’s ability to do one major job: Advertise. When your sign is constantly broken it is not doing it job, and you are losing the return on your investment. To the public, the quality of a sign will reflect the quality of the organization it promotes. A broken sign will cost you business in the long run.

The initial gain from a low cost product is quickly overcome by the cost and negative effect it has on your organization. This is not to say that a higher quality or more expensive sign will never have issues, but the frequency and fix-ability of these issues will be significantly different.  A high quality sign will stay fixed because the design is sound, and the manufacturer cares about the long term operation of the product. When looking for a good LED sign supplier, don’t trade short term value for long term headaches.

- Scott Hofheins

* I welcome ALL constructive comments. Please feel free to comment and add anything I’ve missed, or additional tips you may have regarding this topic. Please visit for many other resources, white papers, and of course: Great looking LED Signs.

**All posts/thoughts/writings are strictly the viewpoint of me and me alone and do not reflect nor speak for Vantage LED’s beliefs, attitudes, thoughts, etc. unless specifically stated.

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