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Neighborhood Marketing Tactics

Use your creativity and marketing smarts to attract a loyal following of local businesspeople and residents.
January 11, 2005
URL: http://www.entrepreneur.com/article/75352

As a small-business owner, one of the most effective ways for you to compete with big-name, big-budget companies is to unleash the power that's right in your own backyard. Your secret weapon? Neighborhood marketing--and building an effective strategy is crucial to your success.

Let's talk about what neighborhood marketing is. It's a way to run your business, a philosophy that focuses on satisfying your customers at a higher level. Neighborhood marketing is a system that concentrates on building your business from the inside out, and never farther than a five- to 10-minute drive from your company's front door. It takes what you create within the four walls of your business and serves it up as a "concentrate" in high doses to those who can have the greatest impact on your business.

The neighborhood marketing philosophy is one that keeps you focused on the tools you already have at your fingertips: your employees, your products and services, and a database of your customers and internal merchandising strategies. By developing these areas to make them the best they can be and leveraging these tools just within your neighborhood, you'll be able to take your company to new heights and grow your sales consistently.

Why concentrate your strategy on customers who live and work no more than a five- to 10-minute drive from your location? That's where the overwhelming majority of your best customer's come from. If you have any doubts, just ask each of your customers' for their zip code for the next 7 days. Then plot them on a zip code map (easily found in most phone books). The proof will be right there before your eyes.

Understanding the importance of your marketing area will also help you realize that using mass media to advertise your business shouldn't even be an option for you. While the allure of TV and radio ads can be intriguing, for neighborhood businesses, it's often the fastest path to bankruptcy. Mass media covers an enormous amount of geography, which you're paying for. So why reach out to those who will never drive the distance to see you?

Getting Started

So where do you start? As obvious as it may seem, you begin by being a good neighbor yourself. Maintain the appearance of your business-keep it clean and professional. Be sure your location is meticulously maintained and looks like a place you're proud to pull up to each day. A business that is unkempt or untidy gives customers the impression that this is how you'll conduct your business. First impressions really do count.

Next, look for opportunities to get involved in neighborhood functions, like sponsoring a little league team. Consider having a customer appreciation party. Think of yourself as running the general store of years past, where the owner knew the names, birthdays, anniversaries, fortunes and misfortunes of each and every customer. These general store owners were involved in their communities, churches, local festivals, fundraising events and the like.

Seek out neighborhood gatherings and figure out how you can get involved. Imagine dropping by a neighborhood block party with a case of free refreshments courtesy of your company. How about sponsoring an activity for the children at one of these events? Show you care about the firefighters and police officers in your area by sponsoring a discount day especially for them. These kinds of activities are what ignite the buzz within your neighborhood.

Focusing on your neighborhood requires a focus on those that are new to your area-don't miss an opportunity to welcome new neighbors. Did you know that the average American moves every 5 years? That means that as many as 20 percent of your current customers will move in the next 12 months--and that many new people will be moving in. So buy a list of the new residents that move into your market area each month, and send them a coupon for a free product or service to familiarize them with your company.

Whether you operate a restaurant, flower shop, dental office, dry cleaners or some other neighborhood business, new neighbors can be an important element of your neighborhood-marketing plan. New movers will spend more money on products and services during the first 60 days than an established resident will spend in 2 years. They're also open to trying new product and service providers during this all-important "habit forming" stage. In some industries, redemption rates on new neighbor programs can run strongly into the double digits.

Just ask Ray Villaman, a Dryers Ice Cream shop franchisee in Oakland, California. "We consistently pull a 20 percent redemption rate on our new neighbor program," says Villaman. "This is something we do on a regular basis with new neighbors--we always give them a free sundae at no cost to them at all. It isn't long before we notice their faces again and again with repeat business."

While marketing to new neighbors often translates to just a few hundred names each month, over the course of a year, that can mean several hundred new faces that come into your business. Make your new-neighbor offer compelling, and you can reap huge rewards from this profitable group.

Developing Ideas

One of the most effective things you can do is create excitement about your business. And that doesn't have to be expensive. Think of low-cost things you can do that will create a buzz about your business, things that will get people talking.

Here's a great example: I had a friend who once owned a small café that only had about 20 tables. One of the tables was close to the door, and no one ever wanted to sit there. One day, my friend decided to label the table "the worst table in the house." Best of all, if you opted to sit there, he'd take 50 percent off your entire bill.

Did he see results? You bet. His brainstorm created a buzz about his café. Within a week, people in the neighborhood were talking about his café and the table they'd sat at last night where they got their dinner for half price. There were some evenings when people would wait as long as 45 minutes to get that table. This type of internal marketing is what fuels word-of-mouth advertising within your neighborhood, and it doesn't take big advertising dollars to do it.

If you lack the creativity to develop these neighborhood marketing ideas on your own, don't worry, there are resources you can turn to for help. One of the best I've found is Tom Feltenstein's book on the topic, Tom Feltenstein's Encyclopedia of 401 Proven Killer Promotional Tactics.

The bottom line is, you don't need to have a huge advertising budget or hire an advertising agency to help you compete with big budget companies and win. Neighborhood marketing is about competing in the trenches that exist within your own backyard. It's about relationships, creativity, great merchandising, great employees, and knowing your customers and exceeding their expectations. Effective neighborhood marketing tactics are at the core of the most successful small businesses in the country-and many of the billion-dollar companies that have made it, too. The successful delivery of this is a lot harder than writing a check to place an ad, but without adopting its principals, there's no reason to be in business.


Brad Kent is the president and CEO of SmartleadsUSA LLC, a specialty list and direct mail services company in Palm Harbor, Florida.