How To Determine the ROI of Your Outdoor Digital Signage
Outdoor LED displays are an effective way to promote your brand, attract customers, and boost sales and growth for your business. When you invest in a new signage solution, you want to know that your sign is accomplishing these and other business objectives. To do this, you must calculate your return on investment, or ROI. Knowing your ROI ensures that you continue to make the most of your signage solution. ROI can also help you make informed decisions about future signage and other marketing projects. Learn how to determine the ROI of your outdoor digital signage with these expert tips.
The Importance of Calculating ROI
Generally speaking, ROI is a straightforward calculation that is useful when measuring the success of nearly any business endeavor. To calculate ROI, subtract the cost of the investment from the profits that the investment creates. The higher the number is, the more profitable your investment is. ROI allows businesses to track the success of various endeavors to either prove the investment was worthwhile or determine how to find greater success in future projects.
ROI and Digital Signage
ROI becomes more complicated when you discuss an investment like digital signage. Not all gains manifest in straightforward dollar amounts. As a result, businesses must also examine other advantages that their signage creates, such as increased foot traffic or more visits to your website.
Start with the price of your initial financial investment. Be sure to calculate all the various upfront costs. In addition to the price of the sign, consider costs such as power and infrastructure changes, system training, design services, and installation and maintenance labor. These factors are also an important part of choosing a quality outdoor LED sign manufacturer. This sum is the number you will compare against all the various gains and savings you get from your sign over time. Accurate ROI numbers are long-term calculations that consider the ways your business continues to benefit from your outdoor digital signage long after your initial investment.
ROI vs. ROO
It can be helpful to consider your return on objective (ROO) alongside your return on investment. Determining ROO helps you evaluate how your signage accomplishes your business goals, even when those goals don’t directly increase profits. ROI and ROO work hand in hand. Measuring both allows you to analyze the ways your digital signage affects your business so that you can make the most of your investment.
Start by Setting Goals
An essential part of how to determine the ROI of your outdoor digital signage is setting clear goals before making the investment. What does your sign need to accomplish? Is the priority to boost sales, increase traffic, or share information with customers? Make a list of objectives, such as customer attraction and retention, higher product sales, or less staff time spent on answering customer questions. Setting up and monitoring specific business goals will allow you to effectively determine how your outdoor digital signage improves your company. These objectives will also help you communicate your goals to your outdoor LED sign manufacturer so that you can create a signage solution that best serves your business.
Be specific with your objectives. If you want to boost sales, what numbers are you aiming for? Do you want to sell more of a specific type of product? In addition to helping you determine ROI, knowing these goals ahead of time allows you to create designs for your signage that best serve these objectives.
The goals you choose to monitor will vary depending on what your business does and what areas you want to improve. Below are a few common goals you can set up and calculate to determine the ROI of your outdoor signage.
Increasing sales is a major reason why businesses invest in new signage. Clear, attractive, and attention-grabbing signs direct more customers to your products, which leads to more profits for your business.
Track sales numbers from before and after you install your new signage to see how much your overall sales increase. If your signs advertise specific products, pay attention to the sales numbers for those products as well. Monitoring sales gives insight into the general impact of your new signage. Increasing sales is an excellent goal for stores, restaurants, or other businesses that want to use their signs to bring new attention to their locations and create more transactions from a larger customer base.
Large outdoor displays can catch attention from blocks away. As such, an outdoor digital sign is a great way to create more foot traffic for your business. If your goal is to bring in new visitors or widen your customer base, measuring foot traffic is a good idea. Not every visitor who walks into your business will buy something, so measuring sales alone won’t give you a clear idea of how your sign affects your traffic.
Walk-in visitors who don’t purchase anything still bring value to your business. Visiting customers will still have your business in mind whenever they think about your products or services in the future. Additionally, more foot traffic can lead to more word-of-mouth referrals, which helps spread your brand throughout the local community.
Just because customers don’t enter your physical business doesn’t mean your sign didn’t influence them. Measure online traffic to your website, social media channels, and any other digital presence your business has. As with physical traffic, online traffic measures general engagement rather than pure sales. Even if a website visit doesn’t result in a sale, the traffic and engagement tell you that your sign is successfully grabbing the attention of potential customers.
General Information Calls
Signs don’t necessarily have to be promotional. Organizations like churches or government buildings can use outdoor signage to share information or direct the public. Schedules, announcements, or frequently asked questions are examples of effective information to include on a sign. Conveying this information through clear and visible signage reduces the time employees spend answering these questions themselves. This frees up phone lines and help desks, streamlines your processes, and allows employees to focus on more important tasks.
Ways To Collect ROI Measurements
There are a few ways to track these goals and determine your ROI on your digital signage. In addition to tracking sales and finances, use surveys to evaluate customer engagement. Questions like “how did you hear about us?” give you an idea of how many customers visited your business because of your sign.
Remember that cost savings can also influence ROI. For example, effective signage reduces the need for other, less efficient advertising methods, like physically printed ads. The money you save by cutting these advertisements factors into your total ROI. Similarly, the time employees save when they don’t have to answer as many repetitive questions also contributes to the effectiveness of your signage.
Find a Signage Solution That Delivers Successful Results
When you invest in outdoor digital signage, you want the best results possible for your business. That’s why it’s important to choose a reliable outdoor LED sign manufacturer, such as Optec Displays. Contact us today to learn more about our LED signage solutions and how we can help make your next investment worthwhile.