The SignTraker Sign Installer Fuel Survey Results Are In!
The long-awaited SignTraker fuel survey results are in!
SignTraker Owners Use Various Methods to Address Increasing Costs
The SignTraker Fuel Survey
SignTraker Technologies recently surveyed its SignTraker Licensees across the United States and Canada. The objective of the survey was to determine how real estate sign company owners were responding to increases in fuel prices, since fuel is the largest variable expense that owners face, second only to staffing.
To put the problem in context:
- The price of gasoline in the United States increased from approximately $2.17 per gallon in June of 2020, to more than double that to $5.03 per gallon in June 2022, an increase of 131%. (Source: US Dept. of Energy, Retail Gasoline Prices https://bit.ly/3IRwpDX ; reformulated varieties required in California were approximately $.40 more per gallon).
- The price of diesel fuel in the United States increased from approximately $2.41 per gallon in June of 2020, to more than double that to $5.75 per gallon in June 2022, an increase of approximately 139% (Source: US Dept. of Energy, Ultra Low Sulfur Diesel, https://bit.ly/3yV2DJU).
In general, to recoup (or even just offset) these operating costs, real estate sign installation companies have limited options:
- Raise their base installation price, or
- Keep their pricing the same but apply a fuel surcharge.
However, our survey revealed that real estate sign installation companies also worked to constrain their expense base using a variety of creative means, usually by looking at where and how they offer their services. Actions they took included:
- Restricting their standard service areas, limiting the areas they will provide service. In these situations, the real estate agent requesting a sign installation will find that service is no longer available. This was generally applied to areas that were formerly “extended” service areas.
- Restricting their days-of-week service for some service areas, for example, servicing some areas on a Monday/ Wednesday/ Friday basis, or even just a Tuesday-Friday schedule, instead of what was formerly daily service. The objective of this strategy is to increase the real estate sign installation company’s overall placement density, which in simple terms is the frequency of sign placements per hour. By servicing each area less frequently, the number of installations completed per hour on the days the area is serviced is increased—resulting in more installations per trip, on average. In this case, the real estate agent requesting a sign installation will find that they may have to wait two or more days for their real estate sign installation to be completed.
Complicating Factors: Inflation and Labor
Several respondents interviewed after the survey also indicated that general inflation pressures were affecting their businesses, including the ability to retain labor. Inflation was manifesting itself in increased expenses related to:
- Vehicle maintenance (repairs, oil changes, parts, tires, and other routine maintenance).
- Rent/ warehousing (of agent sign panels).
- Labor costs (Covid compliance/regulation, hourly wages, and insurance).
To address these problems, most companies resorted to the measures noted previously. Three companies went so far as to limit specific types of services, and in particular, rider swaps.
Where sign companies would previously place and exchange an “Under Contract” with a “Sold” rider for a modest fee, they are simply not doing them because there is not enough time (labor) to get everything done. A real estate agent requesting a rider swap would find that they would just have to do this swap themselves.
The Survey Results
We asked our member Licensees what adjustments they made in response to these factors:
- 79% raised their basic installation prices.
- The average price increase was 12.3%
- Of these respondents, about 1/4 (23%) raised their price two times since August ’21.
- Most raised prices in the fall of 2021, when gas prices began trending in the $3.50/gal range, and before the availability of SignTraker’s Fuel Surcharge feature.
- 6% applied a Fuel Surcharge. 
- The average surcharge was $3.10, or 5.1% of their basic installation price
- The surcharge was applied to all jobs in 96% of cases
- The surcharge was applied to only extended service areas in 4% of cases
- The average surcharge applied to extended services areas was 7.5%
- 8% raised prices AND applied a Fuel Surcharge. The most common explanations provided were:
- The price increase was attributed to inflation.
- The Fuel Surcharge was attributed to the cost of fuel.
- 7% did not raise prices. The most common explanations provided were:
- They did not want to upset customers.
- Competitive pressure.
- 23% said they planned on raising rates again (or for the first time), and/or applying a Fuel Surcharge, if fuel prices and/or inflation pressures continued .
Generally, those installers that had already raised their basic installation prices in the face of inflation pressures in late 2021 did not also apply a Fuel Surcharge when that capability became available. However, if inflation pressures persisted, these respondents indicated an inclination to apply a fuel surcharge rather than raising basic installation pricing again.
Of those that raised prices, their price increase was slightly above the rate of inflation, although based on SignTraker internal data it is known that most installers had not raised any prices in at least a year—meaning, the 12.3% average price increase placed them behind the inflation curve, which as of this writing (July 2022) is running at approximately 9.1% per year, when food and fuel are included.
Of those that applied a fuel surcharge alone, the average increase of 5.1% in net pricing placed them similarly behind the inflation curve, but even more so. This suggests that that raising their basic installation prices would ultimately be inevitable, and most likely in the range of 10 and 15%, as occurred in the businesses that already did so.
So, although many sign installation companies are raising prices, it appears that they are not maintaining pace with inflation. The result is that their customers (real estate agents and their brokerages), are actually enjoying lower prices  when inflation is included in the equation.
 The Fuel Surcharge can be set in SignTraker as a flat rate per service, a percentage of current Extended Area Surcharges, or a combination of both.
 At the time of the survey, annual US inflation rate was 5.9%, excluding food and fuel (Source: U.S. Bureau of Labor Statistics, https://bit.ly/3IRfyB5. With food and fuel, annual inflation exceeded 8.8% at the time of the survey).
 The range of installation prices throughout the US and Canada of the respondents (in adjusted US dollars) was $35 (low) and $74 (high):
- The average (or mean) price was approximately $52
- The median price was approximately $51
SignTraker Technologies LLC is a privately held sign installation software company located in Gaithersburg, MD. The company supplies cloud-based mobile software, consulting, and durable products to companies and real estate firms interested in providing a superior ordering and sign marketing experience for their stakeholders. For additional information, contact email@example.com.