Few kinds of signage match the popularity of channel letters. They appear more sophisticated than the average boxy cabinet sign and work well in many building situations. Shopping mall stores, banks, boutiques, large building exteriors and more can use this kind of sign. Channel letters are the perfect solution around some restrictive sign ordinances that either ban pylon street signs or restrict them to small square footage limits. Individual channel letters can be made very large and readable from long distances, such as across a large parking lot. This is the reason why channel letters are the preferred signage choice for strip shopping centers and malls.

Channel letters can show exposed neon or have trim-capped colored acrylic faces, even with ornate vinyl decoration. Channel letters can be backlit in a halo-lighting configuration. Neon is the most often used lighting source for channel letters. New technologies like LEDs (light emitting diodes) and fiber optics are creating new possibilities. Channel letters can be combined with other sign making methods for more complex designs.

Channel letters can be mounted to a raceway structure or flush to the building. A raceway provides convenience and ease of installation, holding transformers and other electrical components. A raceway will also minimize the number of wall penetrations needed for electrical power. Flush mounting has the advantage of a cleaner appearance and may be recommended in certain situations.

Channel letters have some design restrictions. Simple, bold letter styles are best to use for channel letters of average size. Lettering based on thin, serifed fonts or delicate scripts may require exceptionally large sizes to accomodate neon tubing and other hardware.