Last year, proximity marketing leads brought Prince William Home Improvement $1 million in sales. Pictured are Scott Holtzhauer, owner (at right), and Greg Sliger, general manager.
Credit: Photo: Max Hirshfeld Last year, proximity marketing leads brought Prince William Home Improvement $1 million in sales. Pictured are Scott Holtzhauer, owner (at right), and Greg Sliger, general manager.

Typically, proximity or radius marketing has meant putting a sign on the lawn at the jobsite and making the rounds of the closest neighbors by one means or another. That could be by door hangers, canvassers, direct mail, phone contact, or some combination of these approaches.

That's still the essence of the technique. But radius marketing today is broader and more sophisticated than it used to be.

Yes, it's “micro-marketing around your happy customers,” as Tim Musch, business development manager for MarketSharp, producer of sales and marketing software, puts it. But that concept goes well beyond the jobsite and includes targeting what Musch calls “people of like kind,” that is, your kind of customer. “We find that just being in a neighborhood automatically selects the people demographically,” he says.

The mere fact that your customer and his neighbors know one another, and that your company's work is visible and complete, confers a familiarity that can make for high-quality leads. There's a “trust factor” involved, explains home improvement industry sales consultant and trainer Rick Grosso. “If you did the house next door or down the street and those people are happy, trust is an ingredient in the sale. It becomes almost like a referral,” he adds.

Low Cost, High Interest That observation is borne out by the results Scott Holtzhauer gets with the proximity marketing he does around every job completed by his firm, Prince William Home Improvement, in Woodbridge, Va. Last year, his radius marketing leads ranked second in net sales volume produced, just behind canvassing leads. “I would say they're of a little less quality than a previous customer or referral lead, but better than any other form of inbound lead source,” Holtzhauer says. His numbers prove it. Prince William Home Improvement closed a third of its radius marketing leads last year, behind only previous customers (61%) and referrals (52%).

Another advantage? Proximity lead costs tend to be lower than average lead costs. The cost of proximity leads ran about 12% of the net job last year, Holtzhauer says, when loaded with the cost of mailers, lists, and personnel involved — including a manager, telemarketers, and canvassers. Musch says proximity lead cost for contractors using his software and lists averages around $225 per sale. Rich Harshaw, owner of Monopolize Your Marketplace, a company that handles a range of marketing programs for home improvement contractors, cites $300 as the typical cost of a multi-part radius mailing that generally garners two or more leads.

Getting It Done Thanks in large part to technology, proximity marketing today is easier and more practical than ever before. Contractors have ready access to computers, software, and lists that can precisely target streets and blocks. There are more options, too. You can develop and manage the program in-house, outsource the whole thing to a third party, or farm out just parts of it. Whatever the approach, there are some key points that are necessary for radius marketing to be effective.

The hardest part of proximity marketing is simply taking that next step beyond the satisfied customer and doing it, contractors say. “We all get so busy,” says Scott Fairbanks, owner of Fairbanks Construction, Ocala, Fla., who runs a very successful radius marketing program. Before he had a system, Fairbanks says that his company would pick one or two proximity marketing options, say they were going to do it, then “get into the grind and it would fall by the wayside.”

Often, Harshaw says, contractors will have all the elements in place. “But when it comes down to it, they have to get Judy in the office to get the time to do it, and it doesn't get done.”

Radius marketing must be a priority for someone in the office, not an afterthought. There are many tasks to accomplish: choose the target, schedule the canvassing/calls/mailing, source the list, coordinate among departments, follow up. Holtzhauer found the effort took off when he hired someone specifically to handle the program. “If you don't do it, you put this thing on the back burner. If you dedicate yourself to it, it pays for itself.”