The Flywheel

How the flywheel drives business growth and customer delight.

Talk to any business owner or executive and ask them how their industry has changed over the past several years, and chances are they’ll mention their customers. Today, customers are skeptical, knowledgeable, and have bigger expectations than ever before. And one of those expectations is that businesses should care about more than transactions.  

When companies make short-term decisions that sacrifice long-term relationships, compromise their values, and mislead, customers use their influence to share that information quickly and widely.  

At HubSpot, we believe there is a better way to grow — a way to grow better. Companies that align their success with their customers, not only scale, but create delight, loyalty, and love from the people who matter most. When companies grow better, they meet even the highest of customer expectations, and the result is a better business, better relationships, and a better path to growth. 

To grow better, your organization needs to deliver a remarkable customer experience – that’s where the flywheel comes into play.

What Is the Flywheel?

The Flywheel is a model adapted by HubSpot to explain the momentum you gain when you align your entire organization around delivering a remarkable customer experience. It 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.

Other models think of customers as an 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, you make different decisions and adjust your strategy. To show you what we mean, let us first explain how the flywheel works.

HubSpot-English-Flywheel-Jul-27-2020-04-17-18-68-PM

 

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. Forces are programs and strategies you implement to speed up your flywheel. For example, inbound marketing, a freemium model, frictionless selling, a customer referral program, paid advertising, and investing in your customer service team are all forces. By focusing on how you can make your customers successful, they’re more likely to relay their success to potential customers.

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.  Friction is anything that slows down your flywheel. For example, poor internal processes, lack of communication between teams, or misalignment between your customers and your employees. 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 become a force that spins your 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. When you use the inbound methodology as a foundation, the three phases of your flywheel are attract, engage, and delight. By applying force to these three phases, you can provide an amazing customer experience. 

HubSpot-English-Inbound-Methodology

For example, in the attract phase, you attract visitors with useful content and eliminate barriers as they try to learn about your company.  The key is to earn people's attention, not force it. Some forces you can apply are content marketing, search engine optimization, social media marketing, social selling, targeted paid advertising, and conversion rate optimization.

In the engage phase, you make it easy to shop and buy from you by enabling buyers to engage with you on their preferred timeline and channels. Focus on opening relationships, not just closing deals. Some forces include website and email personalization, database segmentation, marketing automation, lead nurturing, multichannel communication (chat, phone, messaging, email), sales automation, lead scoring, and try before you buy programs.

And finally, in the delight phase, you help, support, and empower customers to reach their goals. Remember, customer success is your success. Some forces you can leverage are self-service (Knowledge base, chatbot), proactive customer service, multichannel availability (chat, messaging, phone, email), ticketing systems, automated onboarding, customer feedback surveys, and loyalty programs.

Companies that choose to use the flywheel model over other models 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.

The Flywheel vs. the Funnel

I know what you’re thinking: What about the funnel? For years, companies have structured their business strategies around the funnel — and it worked. But the funnel failed 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 why the flywheel is so important.

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.

We recognize that funnels aren’t going away. While the flywheel is a better metaphor for how today’s organizations grow, you will still have funnel-shaped charts and graphs representing the effectiveness of different processes within your company. You may use a funnel chart to improve a particular aspect of your business performance. Just remember, even though a process can easily be visualized as a funnel, it’s actually one piece of a larger flywheel.

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.

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.

Next Steps

If you’re ready to grow better with the inbound methodology and the flywheel, the HubSpot’s Platform provides you with the tools you need.

It unifies the marketing, sales, and service view of the customer.  Each custom record is accessible by all customer-facing teams allowing you to track each individual contact from the very first touch. And by combining a CRM, marketing automation, and service management in one platform, it provides you with the tools you need to add force and remove friction from your flywheel.