What it actually means.
Proximity is the distance between the person doing the search and your business location. It's one of the three pillars of local search ranking Google publicly acknowledges (the other two are Relevance and Prominence).
Proximity is the factor you can't change. Your address is your address. What you can do is make sure every other signal is optimized so that when you're within plausible range of a searcher, you outrank competitors at similar distances. You also build hyperlocal pages targeting nearby cities so Google has a reason to surface you to searchers slightly outside your immediate area.
Proximity is calibrated by query. 'Dentist' has a tight proximity radius (Google assumes you want one close). 'Cosmetic dentist specializing in veneers' has a much wider radius (Google assumes you'll travel for it). Knowing which queries have which radius shapes your content strategy.
Related terms.
Relevance
How well your business profile and website match what the searcher is asking for, the first of Google's three main local ranking factors.
Read definitionProminence
How well-known and trusted your business is across the web, the third of Google's three main local ranking factors.
Read definitionService-area business
A business that travels to customers rather than serving them at a fixed storefront, like plumbers, locksmiths, and mobile pet groomers.
Read definition