The growing success of inbound marketing has changed the way marketing, sales and customer service teams interact with customers. According to Invesp, a properly executed inbound marketing strategy is ten times more effective for lead conversion than an outbound strategy.
Yet many companies overwhelmingly rely on the marketing funnel to put this inbound strategy into action, guiding marketing, sales and service efforts from quarter to quarter. While the marketing funnel works to a certain extent, it has become outdated very quickly due to dramatic shifts in consumer purchasing behaviour. But there’s a new and improved model for a customer’s purchasing journey: the flywheel.
Before we look at the flywheel, we need to establish what the marketing funnel is and how it works.
What Is The Marketing Funnel?
The marketing funnel, also known as the sales funnel, describes the different stages a customer goes through before, during and leading up to their purchase.
When a customer enters through the top of the funnel, they are furthest away from their purchasing decision. For example, the customer might be browsing your website for the first time at this point.
According to the funnel, this is the right opportunity for your marketing team to attract your buyer persona in the early stages of their buyer’s journey, through content marketing like blog posts and social media content.
When a customer moves down the funnel, they are getting closer to their purchasing decision. Any qualified prospects are handed off to your sales team, where they engage with them in order to build trust. The customer would be speaking to a sales associate in this instance.
After the customer has purchased your product or service, they begin to leave at the bottom of the funnel. Before they leave, your customer service team are left to delight customers so that they provide a good review or even a positive testimonial of your business.
The marketing funnel is structured in a way that means once a customer has left, the focus is placed on the next customer entering the funnel. This system is challenged by the flywheel.
What Is The Flywheel Model?
In marketing, the flywheel focuses on the momentum gained when your entire business is aligned around delivering an outstanding customer experience.
Developed by HubSpot, this model is based on the flywheel invented by James Watt in his steam engine over 200 years ago. Watt’s flywheel was very efficient at capturing, storing and releasing energy.
The amount of energy that could be stored depended on three factors: how fast the wheel spins, the amount of friction the wheel encounters and the size of the wheel.
Customers are essential to improving these factors, as they bring the energy that propels the wheel. The speed of your flywheel increases with strategies like customer referral programs and paid advertising, while friction can be reduced by improving customer interaction and communication between teams.
By working together, the marketing, sales and service teams can continue to attract, engage and delight customers repeatedly so that the flywheel not only spins but grows.
The marketing funnel envisions a customer as an outcome, and so all the energy spent acquiring the customer is wasted as they leave the funnel.
Whereas the flywheel puts the customer at the centre, building momentum by applying force where it is needed the most, towards great experiences with customers. Happy customers will provide referrals that bring in more customers and increased sales.
Why Are Businesses Switching From The Marketing Funnel To The Flywheel Model?
- The marketing funnel has become outdated
At the time, the marketing funnel was able to represent how buyers learnt about products, through marketing materials that they found (or were sent), as well as speaking to salespeople.
While many of these processes remain the same, there are more avenues in which potential customers can gain information. With newfound scepticism and knowledge, people are making purchasing decisions differently in this day and age.
People read third-party reviews, search for answers on social media and ask their networks for advice. The flywheel is a much better method than the traditional funnel to account for these factors, especially when it comes to word-of-mouth. Research by HubSpot shows that 81% of buyers trust recommendations from their friends and family over advice from a business.
- The marketing funnel is based on a linear sales approach
For leads that don’t follow a linear sales process, or aren’t ready to purchase, the marketing funnel pushes them out of the funnel.
But in the flywheel, that prospect who isn’t ready to purchase can remain in the wheel. Instead of having a starting point and endpoint, each prospect is given the opportunity of becoming a long-time customer.
If it works out, prospects can continue to support your brand by buying products or services from your business. Taking the time and energy to build relationships with customers will help a company grow faster with greater efficiency.
- The marketing funnel presents the customer as output
As briefly mentioned before, the marketing funnel presents a customer as input and output for a business.
The top of the funnel is widened to gather as many leads as possible. This is to make up for people leaving the funnel – leads that fail to make a purchase and customers that have already made a sale.
Meanwhile, the flywheel puts the customer at the centre of its inbound strategy. All business teams make an effort to provide a great experience for the customer during their buyer’s journey. When a customer makes a purchase, they can remain in the wheel if they choose to do so, promoting your product or service further to the people around them.
- The marketing funnel causes friction in the buying process
Friction is exasperated in the marketing funnel as customers are handed off between teams who only specialise in particular stages of the inbound methodology.
Being shuffled from marketing to sales to customer service can result in more unpleasant customer experiences than your business can afford. As one of the main concerns of the flywheel is to reduce friction, every team needs to attract, engage and delight customers.
According to the Moments of Trust report by LinkedIn, 90% of marketing and sales professionals agree that when initiatives and messages are aligned, the customer experience is positively impacted.
When all teams are aligned to work on every stage of the inbound methodology, you can provide a great experience for everyone that interacts with your business.
- The marketing funnel struggles to maintain momentum
Another problem with the marketing funnel is that it fails to capture and continue the momentum. While leads that enter the funnel increase the momentum, this is only temporary as momentum is lost every time a customer leaves the funnel.
However, the flywheel model takes into account the importance of maintaining momentum by providing a great product and customer experience. As the delight of current customers has a substantial impact on attracting new prospects, the unified and cyclical approach that appears in the flywheel method allows momentum to continue and grow.
Our Final Say
For many years, companies have structured their business strategies around the marketing funnel and it works to a certain extent. Yet with no improvements being made to match changing consumer habits, customers are not considered the driving force towards a business’ growth and success.
The flywheel was developed to challenge this thinking, understanding that modern consumers make their own purchasing decisions through the information they’ve gathered. Businesses are responsible for providing this information and helping customers along the way.
That’s not to say the marketing funnel is completely useless. It can help improve a specific aspect of your business performance, but the flywheel highlights the effectiveness of these different processes working together in unison, which is how modern organisations grow.
Making a complete shift towards the flywheel can be daunting, so continue operating under the marketing funnel for now and make changes along the way. Over time, the relationship curated between your business teams and leads through the flywheel model will result in more customers.
Whether you stick with the marketing funnel or gradually switch to the flywheel, acquiring business from your prospects all comes down to three stages of the inbound methodology: attract, engage and delight!
At Floodmaker, we offer e-commerce businesses a wide range of services, such as content creation and paid search, to help them with their inbound marketing strategy. Visit our website today to learn more!