Spin The Flywheel–How To Use Flywheel Model For Your Growth

How to use the flywheel model

Spin The Flywheel–How To Use Flywheel Model For Your Growth

“You’ve got to stay ahead of the game to be able to stay in it.”

Kate Moss’s statement has become rather popular in the present times, especially in the business world. The phrase “keeping up with the times” is now replaced by “staying ahead of the times” and for good reason. In today’s world, if you’re not evolving, you’re not going to survive for long. As a result, businesses today are letting go of the age-old funnel approach for customer acquisition and adopting the Flywheel Model.

For those who’re reading the name for the first time, do give our introductory article on ‘Embracing the Flywheel Model’ a glance before going ahead with this one. The previous article covers why it’s wise to move from linear to a circular approach. Not just that, it also covers the basics and phases of the Flywheel model.

If you’re acquainted with the Flywheel Model and looking to adopt it for your business, you’ve come to the right place. We’re not here to simply preach about great things like the Flywheel model but to break it down for you into easy steps that you can use to apply the model to your business.

Funnel to flywheel

Source: Yodelpop

Here’s a step-by-step guide to implementing the Flywheel in any business, irrespective of the company size, industry, or any other factor. This guide works for each and every model if executed right.

Steps to Convert Your Marketing and Sales Funnel to Flywheel

Step 1: Map all your funnel strategies to the Flywheel phases.

Many people are sceptical about using the funnel because they feel that all their existing strategies and activities would have to be replaced and they’d have to start from scratch. However, that’s definitely not the case. In fact, almost each and every strategy that you use for lead generation, conversion, upselling that you use in the funnel can be applied in the Flywheel too. All you need to do is to map it to the right phase of the Flywheel.

As you may be aware, the Flywheel has three key phases, namely, Attract, Engage, and Delight. Mapping strategies to phases allows you to put more focused efforts depending on the goal of the phase. Here’s how:

  • Attract: In this phase, the goal is to allure prospects in such a way that they’d want to know more and engage with the brand. This phase is also for building awareness and brand image within the target audience of the brand. This means that it would include all the content and marketing efforts you have at the top of your funnel. These include a blog, social media marketing, paid advertising, webinars. Each and every lead generation effort that’s there at the top of your funnel gets included in the attract phase.
  • Engage: The goal of this phase is to build a bond with leads such that they become a paying customer. If you map it to the funnel, all the strategies that your sales team uses to take a lead from the interest stage to the action stage fall under this phase. These would include sale offers, discounts, sales calls, email marketing, and more.
  • Delight: This phase of the Flywheel Model may not have many of your existing strategies as this is a phase that the funnel approach overlooks. In this phase, the goal is to provide exceptional customer support to your customers such that they become brand ambassadors and promote your brand, thereby getting you new leads. If you have strategies like Referral System, Feedback Portal, Testimonial marketing, then they would fall under this phase.

Step 2: Measure one key metric for each phase.

This is probably the easiest step in the process of adopting the Flywheel. Yet, most people are unable to get it right. In the process of making their Flywheel approach effective, brands end up measuring too many metrics and take hasty decisions based on all of them. When you use the Flywheel, add multiple strategies to it, and focus on multiple parts of a lead’s journey to a customer and henceforth, there are too many things you can measure. While some numbers that you see can be reassuring, others might be disheartening too. Therefore, it’s key to fall back on one major metric that defines your goal and gives you a bigger picture of whether or not you’re headed in the right direction.

How to choose that metric, you may ask? That’s quite simple. Just find the metric that matches the goal for a phase. Here’s how.

  • Attract: As the goal here is to attract your target audience into becoming prospects for your brand, the key metrics is leads. These could be social media leads, website traffic, and even webinar registrations.  Any person that you are able to get interested in your content becomes a lead and that’s your key metric for this phase.
  • Engage: Here the goal is to convert, right? Invariably, the key metric becomes your conversion rate. The higher it is, irrespective of the source, the better your ‘Engage’ phase is performing.
  • Delight: This can get tricky. You may wonder how can one measure delight? Since the goal of the phase is to deliver happy customers, how would you measure happiness? Well, you don’t have to. You have to measure the result of what a happy customer does to your business. You measure the churn. The churn of your Flywheel includes how much revenue or growth you’ve gotten from your existing customer base. This is essentially a summation of the renewals and successful referrals that you get.

Step 3: Add efforts to the delight phase.

As discussed earlier, delight is the phase of the Flywheel that’s missing from the funnel. Needless to say, that means that you would have to add more value, and strategy to enhance your existing customer support. This could include providing exceptional customer service, adding easy customer support channels, including an automated helpdesk chatbot. Not just that, you could go a step further by offering discounts, and special treatment to your customers to make them feel that you care for them. Additionally, you can give them a referral and renewal bonus as an incentive.

However, just adding these efforts would not do the trick. There needs to be a change in perception too. You’d realize that a lot of your existing tactics could be made more customer-centric if only you change your attitude and perspective towards it. Here’s how Hubspot maximized delight in their funnel.

They identified tasks from their marketing, sales, and service teams and made them more customer-first.

Hubspot flywheel technique
Hubspot flywheel technique

Source: Hubspot

Step 4: Reduce as much friction you can from the Flywheel.

You would probably remember from our previous article that Flywheel requires continuous momentum that’s driven by the delight phase. However, a negative force that deaccelerates the Flywheel is the friction in your processes. Every hurdle that your lead faces, every discomfort that your customer has, adds to this friction. Therefore it becomes imperative that you minimize all possibilities of friction in your flywheel for it to keep spinning and generating momentum.

There are two key ways to reduce friction. First, you need to identify all the hurdles that are there in your Flywheel. These could include website navigation, payment issues, and even customer support waiting time. Once, you know where your customers or leads are struggling, you try to eliminate those hurdles. Here’s how we did it for one of our clients at Prismbiz.

Back in 2017, our client which was a product-based brand was looking to reduce friction from their sales process. Diving into their existing process, we realized that their greatest challenge was their pricing system. Since it was a sales-driven business, the sales team drove the pricing completely wherein each team member had the liberty to get customers at the prices they decided. Apart from the base fare, the sales team members were free to add margins as per their will and offer discounts as per their choice–as long as they got conversions. This meant every quote that was sent had to be generated and prepared from scratch thereby increasing the turnaround time for sending it, which would often make the prospect impatient and sceptical, and they’d go ahead with a competitor.

Friction v/s force

Source: Weidert

The solution was rather straightforward. As we got involved in the process, we brought in a standard pricing system where we categorized each product into levels based on the technology used in them. Then we set a standard margin and discount percent for each level such that it covered all costs. Once implemented, the pricing was streamlined, customers would get their quotation for the products within 24 hours, maximizing delight and therefore increasing conversions.

Changing the existing processes to remove hurdles is one way to go about it. However, that’s not all.

Apart from taking care of known obstacles, you must also pace up existing processes to increase the momentum. Here you first identify all the possible steps of your customer journey and then check whether or not you can automate it. For instance, you could add an IVR to provide more focused customer support. Or add a chatbot on your website to help leads.

Summing it up

Every business has its own way of functioning and its own approaches to get leads and customers. Hence, Attract, Engage and Delight phases are a part of every customer’s journey. Hence, for any business, the above steps can work well in adopting the flywheel model. Once you start practising Flywheel, you’d realize that you would be able to get more inbound leads through your customers. That’s what the core of the Flywheel is.

The customers that are at the centre of a Flywheel are not just sources of revenue, but those of growth. The Flywheel helps you realize the value of this core and narrow your efforts in building value for your customers. Trust us, if your product or service is worth talking about, you’d not even have to push your customers for promoting your brand. They’d be happy to do it.

michael leboeuf

Source: AZ Quotes

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

flywheel 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

Source: Growth Rocket

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.