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Ken Blum, who operates 13 Dunkin' Donuts units in Northeast Ohio, installed his first digital message board in 2008. He now has them installed at seven locations.
He would add them to all 13 if he could, but the other six units are located in municipalities that have restrictions on such displays. Zoning restrictions are the only disadvantage Blum can think of about the boards.
Blum and his partners decided to try out a digital message board shortly after opening their first unit. They chose Watchfire Signs, a Danville, Ill.-based outdoor LED provider. The first sign cost about $15,000. Even though the technology's cost has come down since then, Blum says the ROI was well worth the initial investment.
"The signs come with a 5-year warranty, so that's about $3,000 a year for the sign. For me to do a postcard mailing that would reach 15,000 to 20,000 people, I'd have to spend over $3,000 for one single direct mailing. With this, I have the ability to reach 25,000 people every single day, 365 days a year, based on traffic counts passing the stores," he explained. "We know we aren't going to get all 25,000 people to stop in, but if we can increase our traffic by a fraction of a percentage, then it's worth it."
Effective local store marketing
This marketing potential is the reason Blum wanted to install the signs in the first place.
"We want to be effective with local store marketing, but anything you do at the local store level — direct mail, newspaper inserts, ValPak — didn't seem to have the same reach as this," Blum said.
Now, the seven locations equipped with the boards skip direct mailing altogether. For the more recent store openings, Blum did a grand opening campaign through newspaper or direct mail, but only for about six months. When those units were more established, they began marketing solely through the message boards. He will follow this same strategy with any future store openings.
The boards display national and regional advertising campaigns from parent company Dunkin' Brands, in addition to local promotions, such as announcing a high school football game.
"They give you a level of flexibility you just can't get with any other type of marketing," Blum said. "The software is so powerful that you can change your message by daypart, by day of the week, you can do it for a four-hour promotion and then go back to regular programming, whatever."
An example is if a unit has too many donuts toward the end of the day. Since donuts are perishable, rather than wasting them, Blum can change his message board to advertise an impromptu donut sale.
"If I wanted to do that without a message center, I couldn't. There would be no way to proactively reach people," he said.
Blum said he didn't need corporate's blessing to install the technology. On the contrary, his partners have worked directly with corporate to share the results of their installations in Massachusetts. There is now a level of encouragement, he said.
Although some may still be reluctant about the investment, Blum adds that not only have the prices come down, but the technology has gotten better. The cost is also dependent on the size and features of the sign. For example, Blum has one board that features a single – red – color for messaging, and others with animation features and multiple colors.
In addition to the industry-standard 5-year warranty, LEDs are expected to have a useful life of 10 to 15 years based on running 18 to 24 hours a day, according to John Kunze, director of the on-premise division for Watchfire Signs. He adds that Watchfire signs are rated at or above this performance level.
As for the "disadvantage," every municipality regulates electronic signs differently, particularly those with animated, flashy displays.
"We respect that most quaint little towns don't want to look like Las Vegas," Blum said. "But we can control our signs to pass some restrictions because the art isn't too flashy and it looks good."
'I'm a believer'
If it weren't for municipality restrictions, Blum believes there would be more message board saturation. It's such a new standard, many towns are just now trying to find a regulatory compromise.
For operators who don't have such restrictions, however, Blum would recommend installing a board at any retail outlet.
"I don't have quantitative sales data. In fact, I never know what drives somebody into my store. Was it the radio ad, the TV ad, social media? But I want to get exposure to as many customers as often as I can and this enables me to do that extremely effectively," Blum said. "There's no other way for me to reach the number of people I do on such a local level."
Read more about digital signage.