More than 50 pages longer than the previous edition, Sign Gallery 6 presents recent Signs of the Times competition winners, honorable mentions, and others in this expanded edition of electric ...
New display technology offers revenue potential for companies that service older signs.
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Recently, I experienced an obvious revelation: Companies with an established, electronic-display, installation base, might not be terribly excited to upgrade old lamp displays to new, LED signs. Why? The older technology provided a steady stream of highly profitable maintenance business.
The replacement technologies don't. The new, low-maintenance technologies threaten companies that have committed equipment, inventory and manpower to lamp-maintenance programs.
Having never been on the maintenance side of the sign business, I hadn't realized the fiscal importance of an installation base of older signs. However, companies can lose much business if they don't apprise customers of developing technologies.
Sign companies nationwide derive consistent revenue from maintenance contracts with a 40 to 50%-profit margin. They've carved a nice niche business from fallible old systems, with dependable lamp changes, triac replacements and driver failures.
It was nobody's fault, just the nature of the product. In a decent-sized market, a sign company could annually count on installing five to 10 new lamp displays. Each display produced sales profit, but also, and perhaps more importantly, a reliable maintenance revenue stream for a decade or more.
Now, I finally understand some sign companies' reluctance to propose upgrades. For some reason, I just never made the connection. I would caution every affected company not to bury its head in the sand. It most certainly won't go away. Not only is the new technology here, but its providers outnumber those offering old lamp systems. Each new company has salespeople, armed with maintenance and electrical-comparison charts, to demonstrate to the customer the absolute "no brainer" aspect to the upgrade.
Worse, in some markets, "energy specialty" companies call on lamp-display owners with screw-in, low-energy, lamp replacements or LED lamps. These companies aren't trying to sell new displays. They're trying to place their technologies into existing signs. In the process, they eliminate the sign company's maintenance contract.
The bottom line: Competition for today's display maintenance largely focuses on replacement of the revenue streams itself.
So, what to do? The only hedge against business loss is staying ahead of the curve with your existing customer base to make certain an upgrade's potential merits are clear and, most importantly, that your company is best prepared to assist with the transition.
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