Embracing The Flywheel: Why Marketers Are Changing From Linear to Circular Model

Embracing The Flywheel: Go From Linear to Circular with Customer at the Center

A long time ago, the world believed that the earth was flat until it was proven to be round. For the longest time, monarchy and theocracy was the only form of governance, until the idea of democracy came into being. It would be fair to say that we tend to follow and believe in something until we know better.

From time immemorial, businesses have followed the funnel approach to attract prospects and convert them to customers. It’s the standard that’s been accepted worldwide, and there’s no denying that it has proven fruitful. However, does that mean there’s no better? Until a few years back, the marketing and sales team followed the sales funnel to get results and thought it was indeed the best way to go about it. Not anymore. An increasing number of businesses today are moving away from the funnel.

Where are they headed, you may ask? Marketers and sales professionals are now following the flywheel model to churn sales and revenue like never before. Before we decode the flywheel model for you, it’s important to understand why the funnel approach was failing.

The Shortcomings of the Funnel Approach

Customers are the end-goal of a funnel

For the unacquainted, the funnel approach relies on prospects and leads entering a funnel and then moving down its stages to finally become a customer for a brand. (Here’s a detailed article on the Sales Funnel and its Management)

A typical sales funnel has 4 stages at the end of which a purchase is made and you get a customer.

That’s where the funnel ends. It’s like a typical rom-com story. The girl and boy finally end up together and live happily after. We all know that’s not as simple right? What happens after you get a customer?

The funnel has no answer to that. It tells you nothing about handling a customer post-conversion to retain them or to leverage them for growth.

You keep starting over

AIDA Model

Source: Mail Munch

You build a great funnel strategy, create awesome marketing and sales collaterals, put all the effort to convert a bunch of leads into customers, only to realize that you have to start all over again with a new set of customers. Imagine playing an online game that doesn’t save your progress. So, every time you resume your game, you’ve got to start from the very beginning. Frustrating, right?

That’s how funnels can be. Each time you have a new set of leads, you have to go back to the starting point and repeat the same cycle.

The top of the funnel decides everything

If you look at the funnel, you’d notice that it is heavily reliant on how many leads enter at the top. The other stages become futile if the inflow at the top stops, right? This means that to keep your funnel up and running, you have to continuously get more and more leads.

As a result, you have to continuously invest in attracting leads, and engaging new audiences. Your advertising budgets can never be reduced because your sales team would need a new set to work with as soon it’s done with the older set. It completely disregards the possibility of not getting enough leads on top and what happens thereafter.

Only marketing and sales matters

You’d find new-age marketers talking about ‘pull strategy’ for their brand instead of ‘push strategy’. It is where prospects get attracted and approach the brand in the place of the brand reaching out to its target audience. However, in reality, very few brands are able to do that.

In fact, businesses keep investing in marketing, advertising, and sales and devoting higher budgets to those verticals over customer support or product development. You can’t really blame them though, the funnel doesn’t really take into account anything but marketing and sales. Hence, the verticals that focus on the customer journey post-purchase often get overlooked.

We are not the first ones to notice these drawbacks of the funnel approach. In fact, many models have been suggested as an antithesis to the funnel in the past. The one that struck out the most was the flywheel model. Let’s dig a little deeper into it.

Introducing the Flywheel Model: The New Age Growth and Revenue Model

The first-ever mention of the Flywheel Model was in Jim Collins’s bestseller, ‘Good to Great: Why Some Companies Make The Leap and Others Don’t’. In the book, he correlated growth and revenue generation efforts with James Watt’s Flywheel. According to him, marketing, sales, and revenue generation efforts are not one-off stunts that drive business growth, but continuous processes that require constant pushing and efforts just like moving a Flywheel.

Good to great jim collins

Source: Jim Collins

Let us elaborate. The flywheel was an energy-efficient machine developed by James Watt that relied on the momentum of the wheel to further keep it going.

The more momentum the wheel has, the faster it would move. Collins took the idea of Flywheel to businesses wherein the momentum or the driving force was not the speed, or mass (i.e. the amount of effort you put in), but it was the happy customers that were generated out of your efforts that drove your business revenue.

Yes, you heard us right. Unlike the funnel, your customers are not the end goal in a Flywheel but the force that drives referrals and repeat sales. As a result, it keeps spinning. While there are no stages in the Flywheel, it does have three cyclical phases. Here’s what they are:

Phase 1: Attract

This phase of the Flywheel deals with complete strangers to attract them towards the brand. In this phase, the key is to create quality content that’s relevant to the target audience of the brand, such that they’d want to engage with it. While this content would include the traditional collaterals like ad campaigns, events, and gated content, it also includes content generated by your customers like referrals, testimonials, and reviews on third-party sites. All of these make a stranger ‘interested’ in the brand.

Phase 2: Engage

This phase includes all the efforts you take to build a relationship with a prospect to convert them into a paying customer.

Flywheel Model

Source: 310 Creative

Here both your sales and marketing teams get into the action. While the marketing team engages the prospect with the guiding content like ‘how-to’ resources and other online and offline engagement activities, your sales team builds a connection with the prospects through follow-up calls, chatbots, and other channels.

Phase 3: Delight

This phase of the Flywheel is unlike the funnel as it begins where the funnel ends–at your customers. In this phase, you build a relationship with your customers through exceptional customer service and support such that your customers turn into happy customers. Once you’ve built an experience for your customers that they cherish, they’d be willing to share it and promote your brand, thereby attracting new prospects to the brand and refueling your flywheel so that the process can go on. You could choose innumerable ways to delight your customers including referral discounts, reward programs, excellent return policies, and customer support. The key is to make your customer feel valued at all times.

delight customers in sales funnel

Source: Lead Fuze

Hope this clears out the fog around the Flywheel Model for you. We’re sure you’ve been able to visualize the difference between Flywheel and the Funnel. Here’s how the two vary from one another.

Differences Between the Flywheel Model and the Funnel Approach

Apart from the obvious contrast in the shape of the two models, there are 3 major characteristics that make the flywheel starkly different from the funnel:

The Show Goes On

Probably the most evident difference between the flywheel and the funnel–the flywheel is never-ending. The Flywheel changes the single sweep funnel approach to a cyclic process that fuels itself. Unlike the funnel, you don’t start over from scratch with new leads each time you convert a set of leads to customers. Rather, you leverage the fruits of your sweep to attract and engage newer prospects and the wheel goes on.

Customers are the fuel, not the Goal

Overcoming one of the major drawbacks of the funnel, the flywheel does not treat the customers as the end-point of the business growth efforts. Rather, in a flywheel, your customers are at the core of the efforts and drive and fuel the business. Your first set of happy customers is what gets the flywheel started–they begin your flywheel approach, not end it.

Funnel v/s Flywheel

Delight over Awareness

This is one key difference between the funnel and the flywheel that often gets overlooked. While there’s no denying that you put in efforts in a flywheel to attract prospects, it is not as crucial as delighting your existing customers. You see, as we discussed earlier, the funnel leaves you at the mercy of the number of new leads you get to grow. Without a lot of new leads to work with, your funnel will not work. Every month, this number can vary and is not entirely under your control. However, what’s completely under your control is how you treat your customers and make them feel. So, flywheel stresses more upon delighting your customers to make them your brand ambassadors so they can bring in the leads you need, instead of you traversing unknown avenues and looking for leads on your own.

Wrapping it up

All said and done, we’re not completely dismissing the funnel. It has been working for brands for a long time, and we don’t want you to completely let go of it. That being said, it’s maybe time for you to experiment with the flywheel and focus your efforts equally on customer services as you do on marketing and sales. You’d be surprised to see how exponential your growth would be once you let your customers be your advocates.