Tuesday, August 27, 2013

Digital Signage Sales 101: What does Digital Signage Cost?

-Deacon Wardlow
Lately it's been my great pleasure and honor to have the opportunity to speak nationally with several sign companies about growing their presence with Digital Signage (DS) sales. Some are just getting into LED Sign sales and others are getting their feet wet with interior LCD systems. One recent conversation in particular stood out. The sign company owner asked me, "What markets do these work with?" We were discussing sports arenas, racetracks and other "big ticket" venues.

I believe LED Signs and DS solutions benefit any organization (churches, schools, communities, B2B, and retail/commercial markets). The big question in many people's heads isn't whether it's good or not, the question they often have: is DS primarily a big ticket item which only the "big businesses" can afford? I don't believe DS is too expensive to afford for a business. If I were to sit with a client tomorrow to discuss LED Signage, the conversation would go something like this:

I'm going to make a guesstimate here, no need to tell me if I'm close or way off the mark. Let's say your business earns about $300,000 per year in total sales. At the end of the year, when everything is totaled up your business typically profits 20%. That's $60,000 per year after all is said and done. In my experience, an LED sign nets a return of somewhere between 5% and 15%. Let's split the difference and say your business will likely see an increase of 10% in business when using an LED sign, that's an additional $30,000 per year in business.

If I were to hold out $300,000 in one hand and told you I will happily give you the $300,000 in my left hand for $30,000 placed in my right, you'd jump at the offer, right? A gain of 10% ($30,000) in business means $300,000 over a ten year span and that's a conservative estimate. Not many things will give you a return like that. When a return on investment gives you that kind of gain for your business, why would you hesitate?

Think about advertising; what works, what doesn't... Liquidators spend a lot of money to have people stand on the side of the road waving the going out of business signs around. If someone had only thought to get a 24/7 roadside salesperson out there earlier, the liquidator wouldn't be necessary. Newspaper is starting to disappear, car radio has been relegated to a corner by MP3 players and satellite radio, TV is being replaced with Netflix and Hulu. On-premise advertising (that's signage) is the most direct way to reach a target audience. Dynamic signage (LED Signs/Digital Signage) is the best way to communicate with the public and let them know about services, product, or information the organization has to share.

A lot of salespeople are looking at the issue backwards. The question with Digital Signage is NOT how much will this cost the client. The real question is how much will be lost without a good DS solution in place! In the example given, the profit over 10 years would be $60,000. That's more than it would have cost the business for the LED sign and an overall gain of $300,000 in sales (realistically much more if they're actively using the solution). The real question to leave with the client is can they afford to not have an LED Sign?

*I invite you to comment here and/or email me directly with requests at deacon@vantageled.com. Vantage LED has white paper resources and more educational material on the website (http://www.vantageled.com), please check it out when you have a moment. Note 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 noted.

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