The Flywheel

How moving from the funnel to a flywheel drives business growth and customer delight

Walk onto the marketing or sales floor of any modern office and chances are you’ll see a funnel, hear people talking about a funnel, or be asked to draw a funnel yourself. For years, companies have structured their business strategies around the funnel — and it worked. But recently, the funnel has begun to fail marketers, salespeople, and business leaders alike. Today, customer referrals and word-of-mouth have become the largest influence on the purchase process, which means the funnel has one major flaw: It views customers as an afterthought, not a driving force. You see, funnels produce customers but don’t consider how those customers can help you grow. That’s where the flywheel comes into play. 

What Is the Flywheel?

Unlike the funnel, the flywheel is remarkable at storing and releasing energy — and it turns out that’s pretty important when thinking about your business strategy. Invented by James Watt, the flywheel is simply a wheel that’s incredibly energy-efficient. The amount of energy it stores depends on how fast it spins, the amount of friction it encounters, and its size. Think of it like the wheels on a train or a car.

This energy is especially helpful when thinking about how customers can help your business grow.

Think about it: What happens to customers in the funnel? They’re the outcome — nothing more, nothing less. All of the energy you spent acquiring that customer is wasted, leaving you at square one.

With the flywheel, you use the momentum of your happy customers to drive referrals and repeat sales. Basically, your business keeps spinning.

This isn’t a marketing ploy. We’re not debating jargon. And we’re definitely not redefining the same process.

When you think about your business as a flywheel instead of a funnel, you make different decisions and adjust your strategy. To show you what we mean, let us first explain how the flywheel works.

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How It Works

As we mentioned above, the amount of energy, or momentum, your flywheel contains depends on three things:

  1. How fast you spin it
  2. How much friction there is
  3. How big it is

The most successful companies will adjust their business strategies to address all three. The speed of your flywheel increases when you add force to areas that have the biggest impact — like your customer service team. By focusing on how you can make your customers successful, they’re more likely to relay their success to potential customers.

Remember, every business is different, and the way you design your flywheel is dependent on your business model. Figure out the teams and areas of your business that have the biggest impact on growth. Personalize your flywheel by leveraging those insights and applying force to those areas.

Since you’re applying force to your flywheel, you also need to make sure nothing is opposing it — that means eliminating friction from your business strategy. You can reduce friction by looking at how your teams are structured, why customers are churning, and where prospects are getting stuck in the buyer’s journey. Are all your teams aligned or are they operating in silos? Is your pricing straightforward or is it cluttered with confusing fees? Do you allow prospects to connect with you how, when, and where they want or are they forced to follow your strict process?

The more you increase speed and decrease friction, the more you will create promoters of your business. And all those promoters make for one big flywheel.

 

The Inbound Methodology and the Flywheel

You might be wondering how the inbound methodology fits into all of this. At HubSpot, we believe so strongly in this shift that we've realigned our entire company around the flywheel. We’ve even redesigned the inbound methodology to teach you how to use the flywheel model to grow your business.

That’s why the new inbound methodology is a circle. It focuses on how to build a flywheel that attracts, engages, and delights — creating an inbound business that puts customers first. Using the inbound methodology, you align all of your teams so they can attract, engage, and delight. You do this by applying more force and reducing friction to your flywheel and providing an amazing experience throughout the entire customer journey.

Companies that choose to use the flywheel model over the typical funnel have a huge advantage because they aren’t the only ones helping their business grow — their customers are helping them grow as well.

That’s a much more efficient way to attract new customers and retain existing ones.

The flywheel also helps eliminate friction and reduce clumsy handoffs between teams. In the funnel model, customers are often shuffled from marketing to sales to customer service. This can lead to a pretty unpleasant customer experience. But with the flywheel model, the onus is on every team in the entire company to attract, engage, and delight customers. When all of your teams are aligned around the inbound methodology, you can provide a more holistic, delightful experience to anyone who interacts with your business.

Why You Should Care

The flywheel model is a more comprehensive, unified way of representing the forces affecting your company’s growth.

The actions taken by each team at your company impact each other. Your marketing inputs affect how quickly prospects move through your sales process. Your sales motion affects how likely it is prospects will become happy and successful customers. And of course, your support and service activities impact whether your customers become promoters — people who recommend you to their colleagues — or warn their networks to stay away.

Today, 57% of B2B purchase processes are completed before buyers ever reach out to vendors. And buyers aren’t looking to your company’s marketing materials to make that decision: Third-party review sites, peer-to-peer recommendations, and word-of-mouth play a bigger role in buying decisions than ever before. At the same time, overall trust in businesses is plummeting: 81% of buyers trust their families’ and friends’ recommendations more than companies’ business advice, and 55% report trusting the businesses they buy from less than they used to.

Conversations happen in more places, among more people, than ever before. The funnel was a good representation of how buyers used to learn about products — they found (or were sent) marketing materials, they had to speak to salespeople to find out more information, and then they became customers.

But that’s not how people make decisions today. They ask their networks for advice, they search for mentions of your company on social media, and you bet they’re reading third-party review sites.

The traditional funnel doesn’t account for any of these factors. And because they’re linear, funnels don’t reveal the momentum you build through a great product and customer experience, nor the drag you experience when your processes start to slow down growth.

The flywheel is the mental model that brings these forces together. Removing friction from your internal processes means you can spin your flywheel — and grow — faster. And most importantly, when paired with the inbound methodology, the flywheel reveals the importance of the customer experience. The “delight” stage powers the “attract” stage of the inbound methodology, because of course how you treat your customers affects what prospects hear about you.

Simply put, the flywheel is a more comprehensive look at where your business is growing fastest, and it reveals your biggest areas of opportunity.

 

The Flywheel and HubSpot

The journey from funnel to flywheel didn’t happen at HubSpot overnight — in fact, it took years, and our work still isn’t done. Here’s how Jon Dick, VP of Marketing at HubSpot, explains how we’ve been adapting our business to be more customer — and flywheel — friendly:

“Here at HubSpot, our flywheels represents a circular process where customers feed growth. We’ve invested more in customer marketing, more in customer advocacy, and more in creating delightful onboarding for new customers. We’ve also invested in an integrations ecosystem that helps customers do more with HubSpot and creates real value for people who adopt our suite of software.

Friction kills flywheels. We’ve made investments that systematically target our biggest points of friction: Great free software as an entry point, channels that help people connect now instead of later, a sales process that solves for prospects, and a broad range of customer education.”

In 2018 and beyond, the biggest threat to your company’s growth isn’t your competitors. It’s a bad customer experience.

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That's why companies need to put their customers first and do more than just grow — they need to grow better. At HubSpot, growing better means remembering that your customers are people first, not numbers on a spreadsheet — so interact with them how and when they want. It's placing customers at the center of your business and valuing relationships, not just deals. Growing better is applying force to the strongest areas of your business and eliminating any friction that gets in the way — especially if it has a negative impact on your customers.

If your company is difficult to navigate or relies on less-than-honest tactics, don’t be surprised when people start walking out the door. But if you take the time to invest in transparent, easy-to-understand processes that truly serve your customers, you just might find yourself at the top.