The 4.75% rule: what one additional sign does for your revenue

USD 1997 - Ellis, Johnson and Murphy's The Economic Value of On-Premise Signage, conducted at the University of San Diego School of Business - analyzed 162 fast-food restaurant locations using multiple regression that controlled for site characteristics, demographics and operating hours. The headline finding: each additional on-premise sign was associated with a 4.75% annual sales lift and a 3.93% lift in customer transactions, statistically significant at the 95% confidence level.

4.75% sounds modest in isolation. Run the math on it against a working business and it stops sounding modest. This is the case for adding a second sign - blade, awning, window graphic, directional - to a storefront that already has a working primary sign, and the framework for deciding which type of secondary sign produces the most lift at your specific site.

Where the 4.75% number comes from

The USD 1997 methodology is among the most rigorous on-premise signage research ever conducted. Multiple regression analysis was used to isolate the effect of signage on sales while controlling for variables that would otherwise confound the result: location demographics, operating hours, site characteristics, traffic counts, and price point. The model produced a per-sign coefficient: each additional on-premise sign was associated with a 4.75% increase in annual sales and a 3.93% increase in customer transactions, at the 95% confidence level.

The reason the methodology matters: a simpler study that just compared signed versus unsigned locations would conflate signage effects with location effects. The locations with more signage tend to be the ones with stronger sites, more competitive operators and better merchandising. The regression separates those effects from the sign effect itself.

Taylor's broader signage research (including the 2010 Wiley International Encyclopedia of Marketing entry on signage and the 2012 Journal of Public Policy and Marketing survey of on-premise sign users with Sarkees and Bang) built on the same evidence base. The 2012 Taylor study found that 85% of US on-premise sign users said they would lose sales if they lost their sign, with an average projected loss around 35%. That is consistent with the USD coefficient applied across multiple signs in a typical program.

The compounding effect

The 4.75% number is per sign. Sign effects in the research are additive, not redundant. The same USD 1997 study analyzed a hundred-store Pier 1 time series over seven years. When a building-sign upgrade was paired with two minor signage additions - directional signs, blade signs, window graphics - the combined weekly sales lift averaged around 16%. The building-sign upgrade alone averaged closer to 5%. The two minor additions added roughly the same lift as the primary upgrade did, in line with the per-sign coefficient.

That additive structure is the case for thinking about signage as a program rather than as a single decision. A primary sign on its own does identification. A primary sign plus a secondary sign plus targeted directional or window-graphic work covers identification, branding, wayfinding and impulse induction at the same time. The research is consistent that each of those functions, served by a distinct sign, contributes measurable revenue lift.

For the broader research base behind these numbers, see the business case for storefront signage research summary.

A worked example on an Ottawa storefront

A working storefront business doing $500,000 in annual revenue, applying the 4.75% per-sign coefficient from USD 1997, would see roughly $23,750 in incremental annual revenue from one additional on-premise sign.

A typical blade sign install in Ottawa runs in the range of $1,500 to $4,000 depending on size, illumination spec, and mounting complexity. A typical window graphic install runs lower, in the range of $800 to $2,500 depending on coverage area and material. A directional sign installation typically runs $500 to $2,000 depending on whether it is post-mounted, wall-mounted, or part of a larger plaza signage program.

The payback math is not subtle. A $2,500 blade sign producing $20,000 to $25,000 of incremental annual revenue pays back in roughly six weeks and continues working for a decade or more. The math holds at lower revenue levels (a $200,000-revenue business sees $9,500 of incremental annual revenue, payback in around three months) and improves at higher revenue levels (a $1.5M business sees $71,250 of incremental annual revenue, payback in weeks).

The Ottawa context that affects the math: blade and projecting signs at most City of Ottawa locations require a sign permit and, at plaza or multi-tenant sites, landlord approval. The permit timeline at the City of Ottawa typically runs four to eight weeks once landlord approval is in hand. Sign permits in Ottawa covers the full flow.

Which "second sign" gives the most lift

The research does not treat all secondary signs as equal. The choice depends on which signage function is currently underserved at the site. Taylor's framework identifies four functions that on-premise signage performs: identification, branding, wayfinding, and impulse induction. The most effective second sign is usually the one that covers the function the primary sign is leaving unaddressed.

Directional and wayfinding signs. Pier 1's directional sign work in USD 1997 produced weekly sales lifts of 4 to 12 percent across the studied locations, averaging around 10%. For storefronts at the back of a plaza, in a courtyard, or in a multi-tenant building where customers have to navigate from the road or parking lot to the specific entry, directional signs close the wayfinding gap that the primary sign cannot fix on its own. This is the highest-leverage second sign for sites with weak wayfinding.

Blade signs and projecting signs. Most effective for pedestrian-traffic locations - downtown Ottawa streets like Bank, Wellington, ByWard Market - where customers walking parallel to the storefront cannot read the fascia at a flat angle. A blade sign at a 90-degree projection puts the brand mark perpendicular to the customer's line of sight at exactly the right distance for them to read it before they decide whether to stop. For pedestrian-traffic businesses, this is the second sign most often missing from the program.

Window graphics. Most effective for impulse-stop businesses where customers walking past need to be drawn in. Kalantari, Xu, Govani and Mostafavi's 2022 study in the Journal of Retailing and Consumer Services found that higher window-display transparency is linked to greater perceived attractiveness and entry behaviour. Partial-coverage window graphics that carry brand reinforcement, hours, services or seasonal messaging while preserving interior visibility outperform full-opaque coverage on most service businesses.

Plaza identity panels. For multi-tenant plaza sites, the second sign is often the tenant panel on the master pylon rather than another sign on the unit. A clearly readable plaza pylon panel functions as identification from the road; the unit fascia then handles identification from the parking lot. Both signs are doing the same identification work, in series.

The right second sign for a $500,000 dental clinic in a back-of-plaza location is usually different from the right second sign for a $500,000 streetside cafe. The audit comes first.

The diminishing-returns question

The 4.75% coefficient is a marginal effect averaged across the studied sites. It does not imply that the tenth sign on a storefront produces the same lift as the second sign. At some point, additional signage stops adding new functions and starts duplicating existing ones, and the marginal lift declines.

Taylor's four-function framework gives a useful stopping rule. Once identification, branding, wayfinding and impulse induction are each served by at least one well-specified sign, additional signs add less. The signage program is mature. Additional capital is better spent on refreshing the existing program (LED retrofits, panel refreshes, seasonal window-graphic cycles) than on adding more permanent signs.

This is what the research means by "high-ROI signage program." The compounding effect is real until the four functions are covered. After that, the diminishing returns set in.

How to decide what to add next

A practical decision framework for an SMB operator considering a second or third sign:

Step 1: Audit the current program. Walk the site from the road or parking lot, then from the closest pedestrian approach, then from the door. Score the existing signage against each of the four functions: identification, branding, wayfinding, impulse induction. Which function is weakest?

Step 2: Identify the missing function. If wayfinding is weak (customers can find the plaza but not the unit), the gap is directional. If identification from the street is weak (customers driving past do not catch the brand mark in time), the gap is a blade or pylon panel. If impulse stop is weak (foot traffic walks past without entering), the gap is window graphics. If branding is weak (the storefront does not signal a coherent brand identity), the gap may be a comprehensive refresh of the primary sign rather than an addition.

Step 3: Spec the cheapest sign that fills the missing function. A $1,500 directional sign that closes a wayfinding gap will outperform a $5,000 second fascia sign that duplicates identification. The research is consistent that the gap-filling sign produces the lift, not the most expensive sign.

Step 4: Run the payback math. Multiply current annual revenue by the expected lift (4.75% as the per-sign coefficient; 10% for a directional sign closing a meaningful wayfinding gap, based on Pier 1; 5% as a conservative default). Divide by installed sign cost. If the payback comes in under twelve months, the decision is usually not subtle.

For Ottawa businesses in particular, the secondary sign permit timeline is typically faster than the primary sign timeline because the variances and landlord approvals are smaller. A blade sign permit on an existing fascia is a different process from an initial primary fascia permit on a new buildout. Sign permits in Ottawa outlines what each typically requires.

The case for adding the second sign is empirically strong across the research. The case for adding the wrong second sign is weaker. The audit is the part that determines which.

For more on what a complete signage program looks like across multiple sign types and industries in Ottawa and Eastern Ontario, see the broader commercial outdoor signage page. To start a conversation about a specific site, contact us.

About Lundon Calling

Lundon Calling is a full-service commercial signage company based in Ottawa, serving Eastern Ontario and Western Quebec. We design, permit, fabricate, and install exterior and interior signage for small and mid-sized businesses, dental and healthcare practices, and commercial property managers across a 200 km service radius - including Kingston, Brockville, Cornwall, Smiths Falls, Pembroke, Belleville, Gatineau, and Hawkesbury.

Contact us today for a complimentary signage assessment.

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