Direct Marketing VS Bigger Signage

Often I am ask by marketing students to compare different types of advertising a marketing. Once, I was ask a Case Study Question; Which is better Direct Mail Marketing or a Bigger Sign on your business? Well, I said I will answer your question if you give me more details.

Such as where would I be sending these direct mail pieces? Was my business on a major thoroughfare? Where did my customer base currently come from? What is my target market? What type of signage is out there now and what is the sign made out of?

Well the student who asked the question gave up and withdrew they question so I began to carefully construct a creative scenario. Okay, my business is a car wash on the busiest street in town and 80% of my customers come from a 10-mile radius, which spans 20,000 people in two zip codes plus one more zip code of PO Boxes.

My current sign is wood and decaying, the new city sign ordinance implemented last year due to lobbying by the Chamber of Commerce allows for triple the size and a higher pole out front. The new sign I want costs $4,000 and I get no trade in value for the old sign, its basically fire wood.

In this case I choose to cut down my direct mail for the year by 4 mailings. Currently I do eight per year of the 10-mile radius at $1,000 each. Instead I will do only 4 mailings and build my sign. So what does this say about, which is the better way to advertise? It says they are both good and you should consider this in 2006.