The Power of Money

Piles of U.s. Dollar Bills on Silver and White Suitcase

I have a big question for all my friends out there in the digital signage business. When you are designing a new primary product, do you design for the lowest price or the best value? My answer to that question would always be the best value, however, I have found that more often the lowest price wins, especially in the large projects.

I have been designing and developing products for several decades now but I am still surprised when a large end user makes a decision based solely on price. Even if they know the cheapest product will end up costing them 10-20% more over the life of the product. I know there may be other things that enter into the decision at times but I am speaking in general terms if everything else is equal.

When I started my career I was an engineer and a cost estimator. I learned that all prices were based on cost. Later when I was working on a marketing degree I learned that was not always true.  One huge example was in the liquor industry. I learned about a test someone did at one of the major brands. The liquor company sold three different price levels of whiskey. I don’t remember the exact price but they were something like $10, $15 and $20 per fifth.  As it turned out all three brands were exactly the same but they sold more of the $20 brand than the other two. That was because of the promotions and the perception the more expensive brand tasted better.

Everyone knows if a company is going to be successful their products have to be competitive, but, is price everything? If you are investing in stocks do you stay away from expensive stocks like Apple and invest in the cheaper stocks? I know several people that have done very well with Apple stock. If you are an end user what are you telling your suppliers when they learn you buy the lowest price only?

Trying Something New

I have been working for a couple of weeks setting up a new business (Scott Sharon Consulting) and I received a notice from Facebook this morning telling me I should post something telling people what I am doing with that, so here it is. Many of my friends and family have already seen this on the social media channels.

Some wise person once stated, “If you do something you love you will never work a day in your life”. I am one of the fortunate people that can honestly say I have proven that to be true. I have thoroughly enjoyed my career for the past 40+ years (including my military career) and I plan to keep on going as long as I am in good health and my mind works as well as it does now. I have worked on many exciting projects in my career that still excite me when I think about them. However, what I am most grateful for is the huge number of friends I have been blessed with all over the US and several other countries around the world. These friends are customers, suppliers, and even competitors. However, I have decided to do something a little different.

During my career, I have completed a huge number of consulting projects in many markets. I did not receive a contract and payment for some of them because I did many because my customers had a problem they wanted me to solve or they wanted me to develop a new product for them, plus I enjoyed doing it. However, I did get to provide some of the products I developed for my customers and others helped me sell more of my existing products. But some of the projects had nothing to do with my business.

While recently looking back and reviewing my career I realized that what I enjoyed most was the consulting projects. So, I’ve decided to concentrate more on that part of it. I’ve been involved mostly with signage, menu boards, displays, merchandisers, interactive displays and other communication systems. I have been working on the development of digital signage and menu boards, primarily for outdoor products, for many years. I have also been working on new applications and technology such as facial & retina recognization, geofencing, text and mobile phone ordering with developers, manufacturers and end users. Friends have asked me to get involved in some of these products and some are consulting projects.

Following is just one example of how I get involved in projects. About 20 years or more ago some friends from KFC developed a new restaurant design. I think it was when they introduced their buffet program. They had just completed retrofitting a restaurant in Louisville near their HQS. with the new design and they asked me to give them my evaluation of the design.

When I arrived the outside looked good but inside there were signs everywhere. There were many window signs, hanging banners and displays in every direction I looked. They had a huge menu board but they even made the soffit where it was mounted larger and put more signs and promotion boards there. They created what I refer to as “Information Overload”. There was so much to look at it was very confusing and the customers noticed very little of it. They also had most of the prepared food items out where they could be seen.

I developed what I call a 9 zone marketing communication plan for them. The plan told them the 9 important touch points where they should communicate with their customers. It told them what to say, where and how to say it and what to use. They eliminated over half of their signage and the restaurant looked and worked great. At the time they did not realize the most important communication tool they had was the actual hot food on display.

I recently found an outline of that plan which I would be happy to email anyone that wants to see it.

Digital menu board basics, Part 3

by Scott Sharon * • 26 Nov 2008

“Digital menu board basics” is a white paper in four parts. You may also want to read Part 1, Part 2 & Part 4. Some of the comments I make in this section are just common sense but in view of the many mistakes I have seen I will mention them. Since the start of the digital signage industry, there have been many companies enter the business and several have filed for bankruptcy and some more than once. As in most new industries, there is a shortage of expertise and many unqualified people are selling digital signage systems, so be careful.
Some of the digital signage suppliers have made little investment to enter the industry and simply contract everything out. If they sub everything out and have no value to add to your project, you will be paying extra and receive delayed and poor service. Be careful with someone that tells you they do everything. Make sure the supplier you choose will be around for a while and can back up their warranties. Also, make sure the warranties are backed up by the original equipment manufacturers and will be honored if your supplier disappears or defaults.
Designing your digital signage system requires the cooperative effort of your marketing department and the IT department. It may be best if driven by marketing with the assistance of the IT department. First, you should understand all the capabilities of a digital system. This may require at least a small test. When you have a good idea of what you want the system to do you can design the system and set up a plan with objectives and goals.
A test is a waste of time and money unless you have a proper plan with clear objectives and a method of measuring success. When you have a good understanding of what you want your system to do then you can design it. Without clear specifications and guidelines in your RFP, the proposals you receive will be so different you can not make accurate cost comparisons and may lead to serious mistakes. If you are not careful the lowest priced system will end up costing the most. If you aren’t sure how to do this it is critical to get unbiased assistance.

Digital menu board basics, Part 2

by Scott Sharon * • 31 Oct 2018

“Digital menu board basics” is a white paper in four parts. You should also read Part 1, Part 3 & Part 4.

Can you use digital boards to build or improve your brand? Your brand is your promise to your customer. It tells them what they can expect from your products and services, and it differentiates your offering from your competitor’s. Your brand is derived from who you are, who you want to be and who people perceive you to be. Is your brand promise resonating with consumers? In other words, does the customer experience equal their expectation? If you are the innovative maverick in your industry your customers should see you that way. Keep in mind you can’t be all things to all people. Who you are should be based on what your target customers want you to be. You should be who you want to be vs. who you are in the eyes of your customers and potential customers. A marketer’s job is to create and build a brand identity, not just to sell products. How well you do that will have a positive or negative effect on sales now and in the future. Your image should represent what the brand stands for and imply a promise to customers.

What is your plan to drive traffic and build your brand? First, do your research to identify what habits, perceptions or beliefs your customers have of the brand and develop a plan to build, change or reinforce them today. It usually takes one to three years to show significant results. Review the visual aspects of your brand first. Does the look and feel of your promotional materials accurately and effectively reflect your brand? It’s difficult to sell a high-quality product with homemade-looking marketing materials. In the mind of consumers, quality materials equal quality product. Digital menu boards will show your customers you are innovative and up to date with technology even if you want an “old fashion” look. They also make it easier to make the changes you learn from your research.

Here is an example: Several years ago one of the major restaurant brands asked me to review one of their prototype restaurants where they made some significant interior design changes. The first thing I noticed when I entered the restaurant was the increased amount of graphics and images inside. They even added some soffits to increase the space for graphics. Although everything was very nicely done it simply did not work. Too many graphics and too much information simply increase clutter, create confusion and cause your customers to tune it all out. It creates what I refer to as information overload.

Approximately five years later the same brand asked me to review a new prototype restaurant with all digital menu boards. The difference was so dramatic it shocked me. All the graphics clutter was removed and everything was placed on the digital boards. It made a significant improvement in the perception customers had when they entered the restaurant and made the graphics and information much more effective.

If you feel your design is ineffective or out-of-date, consider updating it by retaining key design elements that still work, while shedding those that don’t. The key is to make your brand look current without losing its original appeal, and thus customers. Ensure all pricing, ordering information, product lists and product specs are up-to-date. Delete anything no longer relevant or accurate. If you’re advertising on the internet, make sure there are no elapsed limited-time offers being advertised. This is especially important when using affiliate advertising. Often affiliates will use old ads and/or links to offers no longer valid. This not only confuses and aggravates consumers but also reflects negatively on your brand.

Digital menu board design criteria: To make effective use of the extra capabilities of digital menu boards you must first understand how your customers use menu boards. You should have a different strategy for your indoor boards than you do for your drive-thru boards. Although the same customers may alternately use indoor and drive-thru service they will have different needs for each. Design the menu boards to fit your customer’s needs. At the drive-thru speed of service and convenience is very important without making customers feel rushed. Service and communication are more important for indoor boards.

Perceived wait time is very important. If you can occupy your customers while they are in line the perceived wait time is much less and it improves your customer’s experience. Research shows most of your customers will know what they want before they see your menu board (that number may be slightly lower inside than in the drive-thru). Plus, the more information you have in the “order zone” the more confusion it causes and it decreases the likelihood any of it will be read and retained.

It’s very important for customers to read your menu boards. It’s your last opportunity to influence their purchasing decision before they make a purchase and increase the likelihood they will return. Most of your customers return or don’t return, because of past experience. Your goal should be to create an experience that brings them back.

When I first started in the digital menu board business my advice was to change only one or two panels of the current boards to digital. I designed an LCD panel that would replace one or more of the existing panels easily. Because of developments in the industry since then, I no longer advise that. Based on new cost, capabilities, and reliability, it would now be a better investment to replace the complete board with digital. However, the board should have a limited amount of animated or moving copy. Too much movement makes it too confusing for your customers and defeats the purpose of moving content. There should be a goal for each panel, such as help to make the ordering decision, trade up or increase ticket, introduce new items and build the brand. It should have a positive effect on the customer’s experience.

Small copy, information on toppers, adders and misc. signs are not easily read in the drive-thru. Digital menu boards will eliminate the need for these and make the ordering decision easier and faster. The feeling of being rushed is increased when a customer doesn’t know what they want and there is a car behind them. Those who feel rushed are less likely to be satisfied with the experience and brand. As with your current boards, there should be separate, clearly identified sections on the boards for different categories of products. Rather than just “present” information, the boards need to merchandise and promote your products. The products should look real and stimulate the appetite.

Is a digital menu board tsunami heading for QSRs?


by Scott Sharon
Vertigo Group USA

I was in the traditional menu board business most of my 30-plus year career. During that time I have designed and sold menu board systems to most of the major QSRs and several smaller chains. I was very excited when I first started learning about using TV screens as menu boards because it made so much sense.

The first indoor digital menu board I designed (I believe it was the very first in the industry) and sold was for an Arby’s franchisee in Richmond, Va., who owned 14 Arby’s restaurants around Richmond, and whose average sales were double the average of all the other Arby’s restaurants in the chain.

This early digital board consisted of four to six of the old 26-inch CRT TV screens, each connected to old style 8-track continuous loop video cassette players. As you can imagine, this board was very large and heavy, but it worked great. We recorded movies of the food and menu board copy on the cassettes to playback. We installed these in all 14 Arby’s restaurants.

Several years later when flat screen TVs became popular and the restaurants started installing Internet access I was convinced every major chain would have digital menu boards within five years. That was over 10 years ago. That’s why I got out of the traditional menu board business and started my own digital menu board business. I did not want to keep selling my customers old technology. I was prepared for the great future I expected to happen with this exciting new technology.

Most of my current customers agreed with me, and several started testing digital menu boards. The consensus of opinion was if the new boards increased sales by at least 5 percent they would roll them out to their systems. Almost all the tests were successful and several chains, such as McDonald’s, Popeye’s Fried Chicken and a couple others, started rolling the boards out to their systems. Unfortunately, this start-up of the industry happened a little too quickly. The software was very difficult to use, and the choices of hardware were very limited and expensive. Although we all agreed the value was there we had to wait for further improvements.

Since that time all the needed improvements have been made. In fact, the technology has surpassed the needs of the QSR market. There are many more choices of hardware and software available, all at a lower cost. The software is very easy to use and has many more capabilities. Digital menu boards are very popular in Europe and Asia. Many of the U.S. chains that have restaurants in Europe and Asia are using digital boards there and have been for several years. Tim Horton’s in Canada rolled out indoor and drive-thru digital boards to all their restaurants, and they love them. But still, no rollouts in the United States.

We have always been early adopters of new technology in this country, so I had to learn why none here have made the switch. Recently I met with the major chains to find out why. I asked them what was holding them back and what would have to happen for them to roll out digital menu boards into their systems. They all believed digital boards were a good idea and agreed they would do it eventually, but none were sure when. I received very similar answers from every company. Following is what I learned about why there have been no major rollouts:

  1. Most of the major QRS chains have been testing digital boards for several years. I have observed most of the tests and been involved in some. None are testing the full capabilities of digital boards, although some are more than others. We in the digital signage industry have done a very poor job of teaching our customers all the ways they can use the technology to increase their sales and their margins. I’m always shocked when I learn that some don’t even know what they are testing for. One testing team told me they were testing just to see if they worked.

Installing digital menu boards and using them the same way you use traditional boards is like purchasing a mobile phone, hanging it on your wall and leaving it there. Simply switching a few of the panels over to digital is the same thing.

  1. The testing companies typically use their current traditional menu board suppliers to supply the digital boards and do the test. Although I admire supplier loyalty, this may not always be the best decision. It is critical for the QSR chains to get the assistance of digital menu board experts to help them “think out of the box” and teach them the full capabilities of digital menu boards. Would you go to the Post Office to get them to help develop a new e-mail system?
  2. Top management at McDonald’s, Burger King and Yum! Brands have all recently made the statement, “we will not switch to digital menu boards until a reliable and reasonable cost outdoor display has been developed.” This makes sense because 50-70 percent of their sales come from the drive-thru. This is why I have spent the last three years working on the development of such a drive-thru display. When I started my research all the outdoor displays were manufactured by smaller companies. Typically they would purchase an outdoor open frame screen and rebuild it. They replaced all the lighting with brighter lamps to stand up to the sunlight. They applied treatments to the glass and built waterproof environmental enclosures with air conditioning and heating units to protect the screen and player. There were several companies doing this in very small quantities. The finished product had several markups and a lot of extra costs. Also, they only gave a one year warranty on the finished product.

It became evident to me the only way to build an outdoor display at a reasonable cost was for the major LCD manufacturers to build the complete product in their factory in larger quantities and provide a decent warranty. I’m very happy to report there is now one or more of the major manufacturers that produce the outdoor boards the QSR market needs.

In conclusion, I do believe the digital menu board tsunami is ready to start. It’s taken a long time, a lot of money, a lot of work and some of my colleagues are no longer around to share in it, but indoor and outdoor digital menu boards have been fully developed and tested. We have proven they will increase your sales by more than 5 percent and eliminate your annual menu board graphics cost.

So the wave is ready to start, and the first trickles have started — how long before the flood?

How do we keep up with technology changes?

 | by Scott Sharon
How do we keep up with technology changes?

Several days ago I had a meeting with some of my old friends at Yum! Brands to discuss outdoor digital menu boards and order confirmation units. Most of my meetings are with people that know very little about digital menu boards, so I have to spend a lot of time giving them an update or education. However, I consider Yum! Brands to be one of the most knowledgeable QSR chains on digital menu boards because they have been testing them longer than most other chains and have learned a lot.

As we progressed through the 90-minute meeting, we started discussing the benefits and problems with digital menu boards. I was surprised by the number of items they mentioned as problems that I did not consider problems. During the meeting, I simply assumed they had been misinformed.

It wasn’t until I was in my car driving away that I realized our few differences were simply a matter of timing. They were stating problems that existed a year or more ago but have since been corrected or improved. I realized that some of the equipment they had in the field was several years old, which brings me to my point: Keeping up with changes in this industry is difficult because they happen very quickly. How do we keep up with all these changes, and more importantly, how do we keep our customers up to date?

It would clear up a lot of confusion and help our industry grow more quickly if there was a way to keep all of us and our customers up to date on improvements and important new developments. I’m not talking about all of the ads and marketing campaigns we see almost every day. It should be something on a weekly or as needed basis that is generic and factual that lists all the important developments and improvements industry-wide. Something we can forward to our customers regularly to keep them up to date.

Does anyone have any ideas?

How do you add value to generic products?

 | by Scott Sharon
How do you add value to generic products?

When I first started my career designing and manufacturing menu boards more than 30 years ago, adding value was a given. We designed, engineered and fabricated them from basic raw materials. When the design was complete we added up all the raw material, direct labor, manufacturing burden and tooling to get a total cost. We added a markup (usually around 50 percent) to cover overhead and profit. That gave us our selling price. This process added our value to the product. If we did this process well and had good customer service, we were successful.

The process is totally different with today’s digital menu boards. We purchase LCD screens, players and maybe even the software developed and manufactured by someone else. Even the smaller items such as mounting brackets and cables are manufactured by someone else. We are referred to as Value Added Resellers or integrators, not manufacturers. So, where do we add our value in this process, and how do we cover it in our price? Our value is determined by how well we design our digital menu board systems, the quality of the products we choose and how well we manage our projects: how well it satisfies our customer’s needs and at what cost.

We add value by providing great customer service and training our customers on how to get the most value from their systems. This is an area where I feel many of us are still falling short. I have evaluated many of the systems out there, and I find very few end-users that are utilizing the full capabilities of their systems, so they aren’t obtaining the full value. If we all do a better job of increasing our customer’s ROI on digital menu boards, it would be a tremendous boost to the industry.

I have worked with several of the traditional menu board manufacturers, helping them convert to digital boards. They all have a difficult time with determining how much markup to add to their products. Many still believe they need to get the 50 percent I mentioned in the first paragraph. However, I don’t think that’s practical as a reseller because it’s too difficult to add that much value to the process. Also, if they take advantage of all the engineering, programming, warranty, marketing and service support the manufacturers and distributors provide, their overhead would be much lower and less markup would be needed.

The companies entering this industry from the Audio/Video and IT industry don’t have as many problems converting because their process does not change as much; I think, however, that their lack of menu board experience helps even things out.

Are all digital menu boards the same?

 | by Scott Sharon
Are all digital menu boards the same?

In the past few months, I have attended several major trade shows to see what’s new and visit with my friendly competitors to see how they are doing. I know almost all my competitors and have many good friends in the industry (digital menu boards). I learned several things, but one stood out more than the others.

Everyone wants to be unique, and we all promote our product differences and unique advantages to set us apart from our competitors. That was easy to do with the old traditional boards because we all had slightly different manufacturing methods, methods of displaying the content and unique designs. The boards were designed and built from scratch, and so we could use our design and manufacturing advantages to set our products apart.

This is much more difficult to do with digital menu boards because the hardware is much more generic. When I walk down the show aisles, all the digital boards look exactly the same to me. The only noticeable differences are in the content. However, every supplier promotes their unique differences and advantages. A great example of this is one supplier offered a choice of decorative frames that could be placed over the LCD display to make it look different. If you are a prospective customer you have to ask yourself, “How can they all be different and all be the best?”

The answer is there is very little difference, if any, between each supplier’s digital boards. There are slight differences in the quality of the displays used, features of the software, capabilities of the players and ease of use, but all suppliers have access to the same or equal components and can assemble the components any way the customer wants. The only real difference is the capability of the supplier to assemble these components in the manner that best meets the customer’s needs and provide the best service.

What’s happening in the digital menu board industry?

 | by Scott Sharon
What's happening in the digital menu board industry?

I have heard many rumors, read news articles and press releases about major deals being made in the digital menu board industry. I also set up my Google Alerts to “Digital Menu Boards,” so I receive all the Web news on the subject. It seems like every day I read about some company switching to digital menu boards, and they talk about why they selected their supplier. So, since I predicted many large chains would be switching to digital menu boards soon, and I want to prove myself right, I have been doing a lot of research on the subject.

I have many friends in the industry and when I discuss these events with them I find the facts to be a lot less “exciting” than what I read. We all know how these stories get started. As an example, I have read articles where someone states they have been selected as the digital menu board supplier for a major chain and they lead you to believe they are doing a major rollout. When I do the research I learn they received an order from a franchisee in that chain for a few of their sites to test. Although I consider this to be good news, I have found little evidence that my prediction has come true.

Most of the people I know in the industry stated their digital menu board business dropped during the downturn in the economy but has recently picked up. However, almost all of the business has been from small chains or single-unit operators.

Also, many of the new startup chains are using digital menu boards, which makes a lot of sense. They don’t have the huge investment in their current menu board programs they would need to replace. It makes sense to them to start out with digital boards rather than switching later.

On the bad news side, one of the startup chains started out with digital menu boards and stopped using them. I have not yet learned why. Some of the large chains are using more digital menu boards in Europe and Asia than they are here, but when people read about it they think it includes the United States.

It’s much more difficult to get information directly from the large chains about large-scale commitments they have made because they tend to want to keep it quiet. I have heard recent rumors that two or three of the major QSR chains (I can’t mention any names) have made some commitments, but it’s not for system-wide rollouts. Typically it’s only for new corporate sites and a few of the new franchisee-owned sites. I still believe my prediction will come true, but I’m still waiting.