Commentary & Analysis
It's a Beautiful Day in the Neighborhood
By Barbara Pellow August 9,
By WhatTheyThink Staff
Published: August 9, 2006
By Barbara Pellow August 9, 2006 -- Most of us grew up in the era of Mr. Rogers and remember him starting his show with: "It's a beautiful day in the neighborhood, A beautiful day for a neighbor. Would you be mine? Could you be mine?" Brenda Stewart, President of Reaching Neighbors, took that concept and decided to build a marketing services business around neighborhood relationships. Regardless of the type of small business, much of its opportunity is within a reasonable geographic proximity. Four years ago, Stewart found herself in an environment like many women. She had small children at home and wanted to spend time with them while still having a creative outlet for her talents. Both she and her husband Jim (now business partner) had been in prominent positions at ADVO. One of the nation's leading direct mail media companies with revenues of nearly $1.4 billion, ADVO reaches, on average, 67 million households weekly and 105 million households monthly. Stewart wanted to blend her current lifestyle with her extensive direct marketing background and build it into a marketing service business that focused on the neighborhood as a target market. According to Webster's dictionary, neighborhood is defined as "the people living near one another or a section lived in by neighbors and usually having distinguishing characteristics." The view at Reaching Neighbors is that regardless of the type of small business, much of its opportunity is within a reasonable geographic proximity. It is with the neighbors that know the small business person in the community where the he or she resides. The initial focus for Reaching Neighbors was the real estate market. According to Stewart, "Our approach was to get the real estate agent to adopt a neighborhood and build a relationship with that neighborhood over a 12-month period through an integrated direct marketing campaign." Reaching Neighbors would design the campaign for the agent and send postcards to the neighborhood. The postcards contained valuable information that would keep the agent "top of mind." Content included listings of everything from baseball schedules for the local high school team to day trips to stops on the Texas wine trail. She customized a unique campaign that reflected events and information targeted at the specific neighborhood the agent had adopted. The objective was to give the "neighborhood" valuable information so they would keep the postcard, and that kept the Realtor in front of the prospective home buyer, seller or recommender. Reaching Neighbors' business model was to deliver an integrated campaign at a cost of approximately $0.70 per postcard. Ninety-two percent of the initial Realtors that adopted a neighborhood and stayed with it for 12 months are still clients of Reaching Neighbors. Expanding the Marketing Services Model With a base campaign up and running, Stewart decided to extend the capabilities of the Reaching Neighbors site by establishing a more complex variable data model for "just listed" and "just sold" properties that put the power of personalization in the hands of the agent. She established a relationship with BlueStream to begin the delivery of more advanced capabilities. Bluestream is a turnkey system for marketing companies and printers with digital and offset print capabilities. Its web-to-print system enables marketing teams, agents and dealers to access collateral, direct marketing and ad creation online. With Bluestream, users can update, build and customize print material online within the context of client portals. In addition to Bluestream's web-to-print capabilities, the application enables one-to-one marketing and direct mail to be set up with a six-step process supported by a guided online help menu. Ninety-two percent of the initial Realtors that adopted a neighborhood and stayed with it for 12 months are still clients of Reaching Neighbors. Bluestream also has lead generation and reporting capabilities to support marketing activities. Its personalized web URL technology, DirectWeb, provides every recipient of a mail campaign with a personalized URL which, when viewed, provider the mailer with tracking and reporting on web site use, including information such as click-through rates, the number of responses from a Direct Mail campaign, and Google leads, integrating Direct Mail, Personalized Websites and e-mail for clients. In the Building Neighbors implementation, the real estate agent, leveraging Bluestream capabilities, can integrate names and addresses and images for a just listed/just sold campaign. They can also select the nearest 50, 100 or 150 homes--or the entire neighborhood--using geo-locator software that Bluestream integrated for the Reaching Neighbors application. Depending upon the neighborhood the agent decides to adopt, the monthly costs at $0.70 per card could range from $700 to $1,000 per month. When you contrast that with the commission on a $200,000-plus home, the ROI to the agent is clear. Future Market Opportunity The concept of a neighborhood is a horizontal market in the eyes of Reaching Neighbors. The local gas station has a need to promote its products and services to the neighborhood. The same is true of the local restaurant, grocery store, dress shop and sporting goods outlet. The infrastructure that Reaching Neighbors has deployed to meet the needs of Realtors is equally relevant to multiple different industry sectors. According to Stewart, "The key differentiator between us and other direct marketers is that we focus on developing a twelve-month program for the client versus simply producing a direct mail piece. It takes some time to see the full impact of a campaign, and we educate our clients about the need for consistent communication over the 12-month period. We understand what it takes to acquire and retain customers and are focused on helping the small business do just that." A Different Kind of Selling Because she realized she would need a unique selling approach, Stewart has established a network of sales people consisting of women who want to work part time out of their homes as independent contractors. Most importantly, these are women that understand the neighborhood and can communicate with the small business owner, because they buy the products and services the establishment sells. Reaching Neighbors has five full-time personnel that manage operations, design and sell, augmented by seven independent contractors resident in the Texas communities that Reaching Neighbors serves. Stewart started the firm four years ago out of her home. The company has doubled revenues every year since it was formed, and this year will exceed $1.5 million. When asked if the independent contractor sales model is working, Stewart said, "Our top sales person did $172,000 last quarter, and I categorize that as success." "The key differentiator between us and other direct marketers is that we focus on developing a twelve-month program for the client versus simply producing a direct mail piece." -- Brenda Stewart Stewart's vision is to take the program out nationally and set up a distribution network comprised of mothers that want to stay at home, but are looking for challenge as well as additional income. Printing Not a Core Competency Reaching Neighbors decided that printing was not its core competency. Instead, Stewart partners with local firms within the geographic markets served. She has strong relationships with digital color print service providers in Austin, San Antonio and Houston, and will soon be expanding to El Paso. Reaching Neighbors generates orders of between 100,000 and 120,000 postcards every month and forwards them to their print service provider network. In Summary Reaching Neighbors is a horizontally focused marketing services company driving digital color and direct mail through a marketing strategy targeted at helping small businesses. Reaching Neighbors educates the small business person on the value of persistency in communications, maintaining mind share with information that is valued by residents of a neighborhood. As Reaching Neighbors expands, it is indifferent relative to the type of business it supports in a true h orizontal marketing strategy. Stewart realizes that it’s a beautiful day when you target a neighborhood.