Achieving Growth by Design
The Sales Funnel or the Flywheel?
Long Live the Sales Funnel.
There is hardly any digital marketing or online salesperson that hasn’t heard of the conversion funnel. You may call it the sales funnel, marketing funnel, revenue funnel, or sales pipeline.
It is a model designed to visualize the buyer’s journey from the moment they become aware of a brand or product to the moment they make a purchase decision in its favor. The concept was first introduced in 1898 by Elias Elmo Lewis and has become ubiquitous all around the marketing world. Google Trend suggests it may even be enjoying growing interest in recent times.
Why a Funnel Though?
The purchase journey is visualized as a tapered funnel because it starts by attracting a lot of people at the top, but only a few make a purchase at the end. Although there’s a continuous drop-off at every stage of the funnel, constant experimentation and iterations can help with optimizing and improving conversion.
There are several variations to the sales funnel. it is therefore important to note that every organization should create its funnel in line with its business model. If you sell toilet paper, for example, your funnel should be short and straightforward. On the other hand, if you sell mortgages, the purchase decision is a bit more complicated, and you may need a longer funnel to properly optimize your sales process. In general, there are 3 stages of the sales funnel:
1. Top of the Funnel (TOFU) — here, people first become aware of your product or service. Your brand awareness activities fit in here.
2. Middle of the Funnel (MOFU) — here, people show some interest in what you have to offer. They may have filled out a form on your website, for example, giving you a lead. Your goal here is to get more Sales Qualified Leads (SQL) — people who have a higher propensity to purchase — using lead nurturing and scoring.
3. Bottom of the Funnel (BOFU) — This is where you convert leads to customers. You should deploy tactics to encourage repeat purchases, create customer loyalty and get your customers to ultimately become advocates for your brand.
Although the sales funnel has been a very helpful tool, it has been with us for about a hundred and twenty-four years now. And there’s a growing movement to find a replacement that speaks more to our modern realities.
Welcome To the Flywheel
The flywheel is a dynamic model that was developed by HubSpot in 2018. HubSpot believes that the flywheel in its very design unites sales, marketing, and service — something the funnel hasn’t quite achieved.
The idea of the flywheel is a mechanical concept, which explains how a machine can sustain movement or momentum from stored energy.
With the funnel, there’s a lot of resources spent on customers that drop off along the way. The lead scoring process tends to eliminate potential customers who are not quite ready yet — but could be ready tomorrow. The protagonists for the flywheel call this ‘lost energy’ and have designed the flywheel as a more sustainable and energy-efficient system just like the mechanical flywheel.
The pitfalls of the funnel include the fact that it is a linear model, and the customer is an output of this process. There’s no way to visualize how the drop-offs or the converted customer brings value back to the funnel. Most marketers therefore ruthlessly focus on conversions and have no playbook on what to do next. Growth occurs by expanding the top of the funnel to capture more leads — this means more money is spent to drive awareness.
65% of the average company’s business comes from existing customers.
With the flywheel, customers are the most important input and never drop off the spinning wheel once they enter the system. The energy from satisfied customers constantly drives the wheel. Growth is the axle that the flywheel turns around, and promoters are the driving force that keeps it moving.
The wheel works by applying force (implementing the right marketing tactics to get your wheel moving) and removing friction (which may include poor internal processes and a silo mentality between departments). The focus is on customer satisfaction and support as they serve as the drivers of business growth.
Like the funnel, the flywheel consists of 3 stages:
1. Attract — here you earn people’s attention, not force it using content marketing, SEO, etc.
2. Engage — the focus here is opening relationships not closing deals website and email personalization, market automation, etc.
3. Delight — here you help, support, and empower customers to reach their goals.
See a summary in the image here.
Is the Shift Worth It?
Many marketers have argued that this shift is only a change in semantics. Some others have embraced both, using the funnel for strategic planning and the flywheel for more tactical operations.
At the heart of it, the flywheel is more customer-centric, has a less salesy approach, more integrated, especially embracing customer experience as part of marketing. Every department in the organization is geared towards applying more force at the right touchpoints and removing the most friction just so the customer enjoys a frictionless experience.
“Dollars flow where the friction is low.” — Brian Halligan, CEO, HubSpot.
Thinking about it, most of the businesses we celebrate today are those that have successfully removed some form of friction from the buyer’s experience. Facebook removes friction from making friends online; Airbnb, from getting a less expensive place to stay on a trip; Amazon, from buying anything anywhere, etc.
What friction is your business removing from your customer’s path? And how well is it doing compared to the competition?
The Universe Tells Its Own Stories
What do you get when you cross the sales funnel, the flywheel, and an atom?
I had a weird idea that may very well change how you see the buyer’s journey forever, to be published soon.
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