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The Marketing Function of Signs

Communicating the Location of the Business (Indexing the Environment)

Signs serve as valuable wayfinding devices, guiding customers safely through traffic to their intended destination, which is why the federal government has detailed specific guidelines for highway signage.  In many instances, the sign is the primary way that consumers learn that a business exists at a given location.  A sign that is of adequate size, height and illumination, and that is properly placed, will give drivers sufficient time to see the sign, determine whether they wish to respond to it, and maneuver through traffic to the business without having to go around the block.  Parking lot entrance and exit signs are an important part of this process.

One sign company compiled and published the results of several surveys performed in 1997 in an effort to determine where small businesses get their new customers.  The survey was conducted by a cross section of 165 independent merchants throughout the United States, and involved 2,475 customers who made purchases for the first time at those businesses.  The surveys were conducted 30 to 45 days after installation of a new sign.  Customers were asked, "How did you learn about us?"  The results [shown in the table below] clearly demonstrate two things: (1) the subject signs were effectively "speaking" to (being read by) potential customers; and (2) for small, independent merchants, signs are often the most effective marketing communication device.

Their Sign Word of Mouth Newspaper Yellow Pages TV Radio
1,234 820 212 139 32 38
Percentage by Category
50% 33% 9% 6% 1% 1%

The percentage of those who stopped at these stores due to the sign may actually be greater than the number reflected in the survey results.  Only those who actually made a purchase were surveyed.  Further, the surveys did not calculate the number of customers who had initially located the business because of its sign.  The surveys were conducted soon after the stores opened, and clearly demonstrate that signage is critical for a new business.  Over time, the percentage of customers attributable to the sign will tend to decline, as a regular customer base is developed.  However, because more than 16% of the people living in the local trade area will typically relocate each year, and because people need to continually be reminded of a business's existence, the sign will continue to be a vital marketing tool for the business.


The identification function of on-premise signage is fundamental to the success of most retailers.  No business should take its street presence for granted, but a business that relies on impulse sales has an especially acute need for a prominent street presence in order to attract the attention of the passing motorist and motivate a stop.

Reinforcing Advertisements and Other marketing Variables as Part of Integrated Marketing Communications

A retail store's sign contributes to the overall perception of the business as it communicates information on store location and store image to the consumer.  An Attractive, identifiable sign can do much to reinforce messages provided by other advertising.  In particular, the sign itself can serve as a visual cue, prompting the consumer to recall those messages stored in memory.

Another way signs operate to reinforce advertising is by cueing consumers to the existence of the business at a given location.  This leads the consumer to access his or her memory to call up associations they have with that business.  The more prominent a business is in the minds of consumers, the greater that business's share of the market.  Similarly, the greater the consumer's memory of a specific product, good or service, the greater is his or her inclination to purchase that particular product, good or service over any other.  This phenomenon is known as top-of-mind awareness.

Enhancing Store Image

Usually, the signage and storefront presentation can tell the consumer instantly whether the business is formal or casual in its atmosphere, reliable or erratic in its service, and seasoned or inexperienced in its management.  If a sign is poorly maintained or cheaply built, it will project a poor image of the business.  On the other hand, expensive signage, such as the kind utilized by The Limited and Nordstrom, helps build a positive image for a business.  Signature buildings and consistent signage from one store in the chain to the next help to develop a coherent image for the overall brand.  Image can also be built through a comprehensive face lift of an existing building, performing much the same job as that done by the signature building.

Most businesses want to stand out in a crowd and work to differentiate their storefronts from each other.  In frontier towns, the traditional western storefront gave stores an appearance that differed from that of other buildings in town.  Today's storefronts utilize unique architectural features, trademark colors, display windows, and signature buildings.  The sign itself may be a sculptural element that functions as landscaping.  It may be designed to match a local theme.  Or its structure may be designed to match the building.

Signs, like any form of speech, must be tailored to the intended audience.  Before criticizing a sign, look at whom it is intended to reach.  If it is working to attract the customers served by the business, and if it is creating the appropriate image for the business, then it is communicating its message effectively.

Multi-Purpose Signs

On-premise signs do not fulfill these four basic functions in isolation from one another.  To the contrary, a single sign will typically fulfill a combination of functions.  It is for this reason that the subject function is difficult.  A sign can simultaneously guide people to the site, brand the site, reinforce advertising campaign themes, and, through the use of a changeable copy sign (or LED electronic message center), influence specific purchasing decisions.

Every small business needs to understand the multifaceted value of its sign and storefront.  Signage is more than a simple marker indicating the location of a business; it is the means by which a business begins a conversation that can lead to a transaction with members of the public.  It begins the process of branding or indexing the business into the community's shopping need construct.


When a business does not sufficiently recognize that its signage is speech, it tends to underutilize what is a significant asset.  That asset - the sign - is almost always the least expensive, most effective form of advertising available.  In many cases, due to lack of an advertising budget or insufficiency of other advertising to reach customers, it is the only form available.

Whether the sign is providing motorists with directions to a business, showing them what the business will look like when they see it, acting as a point of interest in and of itself, reinforcing other advertising, or persuading specific purchases, it is without a doubt doing so more efficiently and at a lower cost than any otheradvertising or marketing medium available to the small business.

Taylor, Charles R., Thomas A. Claus and Susan L. Claus. On-Premise Signs as Storefront Marketing Devices and Systems. 2005.

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