From Marketing Powers Activate: Think Locally: Effective Prospecting Through Neighborhood Marketing

Submitted by support on Fri, 07/02/2010 - 00:00

Article re-posted from Marketing Powers Activate.

By Eric Cosway, EVP and Chief Marketing Officer, QuantumDigital

With the growth of social media and online marketing in recent years, many marketers have turned away from direct mail campaigns, arguing that mass mailings are no longer an effective way to market to prospects. They believe that targeted emails and Facebook fan pages are the way to reach new customers in today’s marketplace. But, I contend that direct mail is becoming an integral part of today’s multi-channel direct marketing efforts and can be a cost effective way to grow your prospect database. Marketers are already starting to use this medium to direct traffic online to Web sites and social networking sites—and even to initiate mobile text marketing campaigns.

In reality, it only makes sense for companies with a local presence to target customers that are located in close geographical proximity to them. Tom Feltenstein, author and top local marketing proponent, advocates targeting your marketing efforts to specific neighborhoods, “making sure your message is delivered only to people most likely to be your customers — those within 10 miles or 10 minutes of your door.”

Neighborhood marketing is an easy way to focus on those prospects that live or work in close physical proximity to a location or the area a business serves, and direct mail is an effective way to reach them.

What is neighborhood marketing?
“Neighborhood marketing” refers to the practice of targeting specific prospects in a particular neighborhood with a targeted postcard or other mail piece. Instead of being limited to blasting direct mail pieces to thousands of prospects in a particular ZIP code, new technologies are making it easier to segment and target specific audiences based on location and demographics—allowing marketers to control exactly to whom and where they send direct mail pieces. The ability to precisely target specific audiences is helping marketers cut costs while increasing the effectiveness of marketing campaigns.

For example, placing a personalized, targeted marketing message via post card or letter in front of the neighbors of the location where you’ve just completed a successful job allows you to advertise your business to other potential customers in the neighborhood. Everyone notices when a neighbor landscapes their yard or installs a new pool, so it makes sense to use that as an opportunity to tell them about your services.

Who is it good for?
Companies that provide home services such as roofers, plumbers, HVAC specialists, remodelers, window replacement companies, realtors and landscapers could all benefit from a neighborhood marketing campaign. Businesses focused on consumers in a specific geographic area such as a dry cleaner, restaurant or real estate agent can also use neighborhood marketing to prospect for customers in their particular geographic region.

As in the example above, by targeting areas surrounding a recently completed transaction, a business can identify new prospects and obtain referral business. In this case, the physical address of the original transaction can be used as the point of reference when introducing a product or service to those neighborhood prospects.

In the case of a dry cleaner, house cleaning or restaurant delivery service, the business can let the local community know that they are in the area through a neighborhood marketing campaign, offering a coupon for a discount on services or other similar offer.

Local prospecting campaigns such as the ones described above can easily be automated when digital print technologies are integrated with corporate databases. For example, when a job is completed, a new record of the transaction could trigger a mailing to prospects located within a specific radius of the job site. Responses to the mailing would automatically generate warm lead notifications, enabling them to quickly follow up on a new prospect. Reports can be automatically generated to show how their direct mail campaign is doing, enabling the marketer to make quick tweaks to the program to increase effectiveness.

Best practices for neighborhood marketing mail piece design
Successful direct mail campaigns include a clear call to action on all direct mail pieces. In addition, the piece should clearly (and noticeably) promote a strong offer for those who choose to respond. Believe it or not, many people send out direct mail without an attractive offer. Including a short customer testimonial is another effective tactic for a successful neighborhood marketing campaign. Simply utilizing these best practices can lead to campaigns with response rates in the 5-6% range. Adding personalization can increase response rates even further by making the piece more relevant to the recipient.

Metrics to measure ROI
By leveraging a strong call to action to drive a prospect to a company’s Web site, the company can collect additional prospect data, enabling them to follow up on warm leads and even nurture leads that aren’t yet ready to convert.

Simple Web site traffic analytics can provide information about the prospects and what they are interested in. Online coupon redemption and Web surveys enable the company to develop a more detailed database and to subsequently create more relevant and personalized follow-up campaigns.

Neighborhood marketing provides a cost-effective way to generate referrals and obtain new customers in the geographic area that many companies serve and should be a component of their integrated marketing efforts.