At the 2018 INBOUND conference, HubSpot introduced the flywheel model, a new perspective on how to think about the buyer’s journey. This shift away from the funnel model is to address the shift in how buyers today make their purchasing decisions based on customer testimonials, reviews, and referrals.
The difference between the funnel and the flywheel methodologies is that the funnel addresses customer acquisition as a probability problem while the flywheel treats customer acquisition as a compounding opportunity.
The Buyer’s Journey Funnel
The concept of the funnel is frequently used as a tool to think about sales and marketing processes. A buyer’s journey funnel breaks down the buyer’s psychological phases in making purchase decisions.
The following are the three phases of the buyer’s journey in a funnel:
- Awareness: Refers to a buyer’s awareness of a problem or opportunity
- Consideration: Refers to a buyer’s consideration of methods, products, or services to resolve the problem or to capture the opportunity.
- Decision: Refers to a buyer’s decision on the solutions for the problem or opportunity.
The funnel assumes a percentage of loss from one stage to another and naturally guides sales and marketers to emphasize on broadening the awareness in hope to capture a percentage as buyers at the end of the funnel. The goal is to maximize the probability of acquiring the maximum number of new customers. The buyer’s journey funnel is a simple and most commonly used way to visualize buyers’ decision-making process.
The issue with funnel
While the buyer’s journey funnel wasn’t perfect, it had been largely effective in acquiring and growing customers. It explains the need to drive brand awareness within the targeted customer base, highlighting the importance of contents and inbound marketing.
However, the issue with the funnel is that once leads are converted to customers, it lacks the mechanism to keep these customers happy and coming back. When potential buyers nowadays are becoming numb to the massive overload of contents and beginning to trust more on customers reviews and referrals, the funnel begins to lose its effectiveness.
A New Approach
If customer testimonies and referrals become the key driver for growth, businesses need to have a compelling strategy to keep their existing customers satisfied and happy. The idea isn’t groundbreaking — every business knows that keeping its customers happy is important. The challenge has always been the allocation of resources between keeping existing customers happy and acquiring new customers.
This shift in the customer’s buying process presents a new opportunity because it resolved the prioritization dilemma between new and existing customers. The positive reinforcement between happy customers and growth creates a compound growth opportunity for businesses.
The Flywheel Model
The flywheel is a model on how to implement business operations that foster this positive reinforcement and compound growth. The flywheel attempts to align the marketing, sales, and customer service to work towards minimizing frictions that customers face.
The flywheel model is broken down into 3 circular reinforcement processes:
- Attract – Marketing: Create high-quality content to earn prospects’ attention and make it easy to understand the businesses and value propositions.
- Engage – Sales: Engage in buyers’ terms and preferred channels. Incentivize sales for overall customer success rather than the number of deals closed.
- Delight – Customer Service: Delight your customers by making their success as the top priority.
image credit: HubSpot
Ultimately, the goal is to prevent functional silos and make sure all businesses parties have a shared responsibility in keeping the customers happy regardless of the phases that the customers are in.
Is Flywheel Suitable for All?
Yes, in principle. The flywheel model is more applicable for mid and large businesses due to the number of employees and the operational complexity. Early stage ventures often have a single person or a small team for all marketing, sales, and customer service functions that they don’t have an alignment issue. For early and small ventures, a funnel may even be a better approach to acquire the first few initial customers. Nonetheless, regardless of the models that businesses choose to use, all businesses should be obsessed with making their customers as successful as possible.