Hub and Spoke: A Customer Marketing Strategy for the Rest of Us

by James on February 22, 2010

I have a number of what I call bottom drawer clients. These are usually small projects, projects you can fit in a bottom drawer, for very small businesses without a lot of resources. I don’t make much from these clients but I learn a lot working with them, so it’s not completely gratuitous, and they are nice people who appreciate my help.

My bias, and therefore my approach to their marketing, is that a customer marketing strategy, and especially marketing to best customers, is more important than prospect marketing.

Delight your customers and they will:

  • Stay longer,
  • Buy more from you,
  • Buy without being bribed,
  • Cost you less to service, and
  • Bring in prospects just like them.

Don’t delight them and you have to focus on prospects to keep refilling the leaky bucket.

The implication for small or micro businesses, and frankly for medium and large businesses as well, is that marketing effort should be focused on sustaining and building the business you already have, that customer marketing should be your primary marketing strategy.

The Hub and Spoke Customer Marketing Strategy

Generally, my work for these micro clients revolves around building a website and providing a customer marketing strategy they can understand, afford and execute. I call the approach I use the Hub and Spoke Customer Marketing Strategy.

The Hub

In the hub and spoke customer marketing strategy, the web site becomes the hub around which the other marketing activities, the spokes, rotate.

If you own a retail store you might think that the store is the hub. As nice as it is, your store delivers functional benefits, which creates mutual value, but your store doesn’t add value. What your store is selling and your customers are buying is probably not that different from what they can find elsewhere. Don’t think of your store as the hub, it’s a spoke.

As a spoke, you can use your store to identify your best customers, I’m sure your sales staff already know who these people are, and draw them into your hub, your web site. This is where even the smallest businesses can create incremental value, value that goes beyond functional benefits, which builds a relationship between your store and the people who care and who matter.

Why is this important?

Your best customers, while a small percentage overall, deliver a large percentage of your sales and profit. They are also a large portion of the category’s sales and profits, which makes them your competitors’ prospects. Creating a relationship with them, that’s built on incremental value, is how even the smallest business can generate loyalty and competitive insulation. Your web site is the ideal place to do this. This is much harder to do on a spoke-by-spoke basis.

The Spokes

Spokes are the activities, the channels, the tactics you use to connect with customers. Advertising is a spoke. So is Social Media. Each spoke works, with varying degrees of efficiency and accuracy, to draw your best customers into the hub, into the web site.

Spokes provide a conduit through which you deliver value to your best customers. Note this, “deliver value to,” not receive value from. Your best customers are already giving you lots of value and they know it. With the Hub and Spoke Strategy, emails and newsletters are not fliers in electronic form, they describe, inform, entertain, reveal, and uncover new information and insights about the products and services that interest your best customers. They create additional value.

With an apology to George,

“All Spokes are created equal but some spokes are more equal than others.”

You will quickly see that some spokes are better than others at connecting with your customers. For example, advertising is an efficient way to get a simple message to lots of people. But advertising is a unidirectional medium and it’s not very accurate. It’s, frankly, better suited to prospect marketing. And the Hub and Spoke Strategy is a customer marketing strategy.

Now aren’t you relieved. You knew you couldn’t afford advertising, now you know it doesn’t matter because it isn’t the best tactic for you.

Social media on the other hand is not very efficient at delivering a simple message to lots of people. Social Media is very efficient at establishing and sustaining complex, value-rich relationships with your best customers. For example, use Social Media to draw your best customers into your web site where you can create additional value for them. They will appreciate it and be more than willing to exchange value for the value they receive.

With the Hub and Spoke Customer Marketing Strategy you aren’t trying to create relationships with everyone. Everyone doesn’t want to have a relationship with your store, brand, product, service, etc.. But your best customers will. So choose the spokes that are most effective delivering value to them.

The Hub and Spoke Customer Marketing Strategy is simple to understand, inexpensive to execute and it creates value, for you and your customers, that’s immediate and sustainable. Consider using this approach for your marketing plan.

{ 1 comment… read it below or add one }

Jay Baer February 26, 2010 at 7:30 am

Excellent post James. Thanks for the heads up.
.-= Jay Baer´s last blog ..Do You Know Your Customers Enough to be a Social Media Hit? =-.

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