How to Increase Your Sign Margins

You know the selling environment for signage is tough. So how can you improve your product margins in this challenging business climate? Our next few posts will focus on this topic – it is too broad a topic to cover in one post. This post covers a strong first step that is a critical beginning. The first step to gross margin improvement is answering this question: at which business activities does your sign business excel?

For example, does your company excel at high product quality? Do you use only the best raw materials and then consistently match your customer’s sign specifications and installation requirements exactly?

Or do you excel at coming up with creative solutions for your customer’s signage needs? Do you have excellent vision for signage ideas your competition did not include in their proposal?

Or is your strength on-time delivery? Do you pride yourself on (almost) always meeting your customer’s installation deadlines? This list could go on for quite a while. I’m betting there are some signage business activities you perform better than your competition. And you should be using those features to differentiate your signage business, and justify your quoted prices by using those strengths. Big companies play this game, and you can too. For example, on what single feature does Wal-Mart position their company? You know the answer – price. Their company slogan is “Save money – live better.” Their old slogan was “always the low price – always.” Pricing is their position. Not a good position for you, but perfect for Wal-Mart.

So what can you use to position your signage business? Some of the more important signage business features are:

* Product quality

* Timeliness (Signs installed per the original schedule)

* Turnaround time

And here are some lesser features for you to consider:

* Customer service

* Competitive product warranty

* You and your employee’s level of accessibility (not voice mail)

* Professional approach to their needs (including creative sign ideas)

* Accurate logo color matching * Speedy responses to project questions

* Accurate and clear company quotations and statements

* Follow up after the project is complete * Your trained support staff

* On-hand inventory of the sign products needed for the project on hand

* Thorough product knowledge

* Open and honest communication about project issues and problems

*Your excellent reputation as an experienced signage professional

* Providing ongoing advice and assistance during the signage installation

Which of these features should you use when you market your signage company? Take an inventory of your best features, and make sure your salespeople are fully aware of those differences as well. Pricing is generally one to avoid. That is the subject of a future post, but I’d suggest staying away from positioning your company on price. That leads to problems. Why is this important? Because when your prospect or customer is attempting to beat you up on price, you need to be able to point out why your higher quotation is justified. If you can clearly state why your approach to the sign project is different (and better) in a legitimate way, then you can use that difference to justify your higher price.

For example, your position might be “we have your project installed on time, every time.” This is a great position for your company to have – and you should place that positioning statement on all of your advertising materials. Furthermore, make sure your salespeople understand this critical selling point when they are discussing proposals with prospects and customers.

So start down the pathway to better margins, and come up with what your signage company stands for. What are your unique qualities that differentiate you from your competitors? This difference alone can help you to get higher margins.