Flywheel vs funnel: what’s really the best strategy for business leaders today?
We’re living in a world where customer journeys and expectations are constantly changing. Today’s consumers expect more from the businesses they work with. They want to see a commitment to customer-centric care from every company, no matter how small.
Unfortunately, the old-fashioned sales funnel strategy doesn’t always support this new world view. Funnels are all about pushing customers through the customer journey as quickly as possible. They focus on a race to the bottom, rather than delighting customers.
As customer experiences become increasingly essential to growing brands, sales and marketing teams are beginning to explore a new approach: the flywheel model.
Here’s what you need to know about the funnel vs the flywheel.
What is a Sales Funnel?
The sales funnel is the classic visualization of how most companies have looked at the customer journey for decades. Marketing teams and sales professionals pour people into the “top” of the funnel, generating awareness and demand.
They then use a variety of outbound and inbound marketing strategies to push customers towards the bottom of the funnel, where they make a purchase. There are several steps involved in the average sales funnel. At the top of the funnel, the target market is wider, as companies focus on generating as many prospects as possible.
As we progress through the stages of the sales funnel, it gets narrower, as prospects are validated, engaged, and converted into paying customers. Though sales funnels are a little outdated in today’s world, they can still be a valuable tool to the sales and marketing team.
When you create a sales funnel, you ensure you can deliver relevant and timely messaging, support, and guidance to customers through each “essential” stage of their purchasing journey.
How Does a Sales Funnel Work? Sales Funnel Stages
Building a sales funnel means investing in distinct strategies intended to engage customers through specific stages of their buyer journey. In the early years, the sales funnel was a lot more simplistic, focusing only on the path to purchase. However, some companies have expanded their sales funnel in recent years to include additional steps.
Common sales funnel stages include:
- Awareness: Populated by the largest number of prospects, the awareness stage is where customers have discovered a problem they want to solve. This is where companies invest in inbound marketing techniques to create interest in their brand.
- Interest: During the initial interactions with a company, customers begin to develop interest in a product or service. They spend more time getting to know the company, learning about its products, and understanding its unique selling points.
- Evaluation: Armed with the knowledge gained during the interest stage, prospects will start to evaluate your products and services, comparing them with other options on the market. They may reach out to your sales or customer service team with specific queries.
- Negotiation and decision: At this stage, the customer makes the decision to purchase your product or service. They may attempt to negotiate a deal with your sales professional, which is where sales teams jump in to handle the conversation.
- Sale: At the bottom of the sales funnel, customers make a purchase, and officially become a buyer. They may sign up for a subscription or make a single purchase. They’ll then usually be moved into the onboarding stage.
- Customer retention: After the sale is over, the customer success teams takes charge to ensure the loyalty and continued retention of the customer. They encourage the buyer to keep investing in the product or solution, and ensure they make the most of their purchase.
What is a Sales Flywheel?
So, what is a sales flywheel?
Similar to a sales funnel, a sales flywheel recognizes the multiple stages involved in a customer journey. However, with a flywheel, the focus is less on simply converting customers, and more on generating momentum through an excellent customer experience.
With the sales flywheel, companies concentrate on not only capturing customers, but nurturing every prospect, and turning happy customers into advocates for their brand. With a flywheel, much of a company’s effort is focused on customer retention and advocacy, rather than the initial conversion.
One of the biggest benefits of the flywheel model is it puts customer experience at the center of everything. With this approach, companies can generate more value from every customer they convert, increasing customer lifetime value, customer retention, and opportunities for growth.
The model also effectively identifies frictions in marketing, sales, and services strategy. You can see which activities are propelling your flywheel, and which are slowing you down, by monitoring customer satisfaction rates and collecting feedback.
How Does the Sales Flywheel Work?
The sales flywheel combines sales and marketing with customer service and word of mouth to generate momentum. To get the flywheel spinning, the sales and marketing team need to invest in strategies to not only acquire, but connect with customers.
Once you’ve acquired customers with your inbound marketing efforts, you commit to ensuring their success and happiness. This means offering excellent onboarding strategies, customer support, educational materials and more to customers throughout their post-purchase journey.
Ensuring the happiness of your existing customers makes them a force for your flywheel, as they either continue to buy from you, or promote your brand for you on social media and other channels. Usually, the flywheel consists of 3 stages:
- Attract: During the attract journey, you reduce the friction to purchase by connecting to customers through useful content. The key is to earn people’s attention with valuable content marketing campaigns, webinars, social media marketing, and so on.
- Engage: In the engage phase, companies build on working relationships with their target audience. This could mean sending personalized messages to their email address, using segmentation in marketing campaigns, and leveraging multi-channel communication. The goal is to increase the connection customers feel with your business.
- Delight: Finally, the delight phase is focused on helping, supporting, and empowering customers to reach their goals. This could mean using onboarding strategies to boost customer success, generating feedback with surveys, and creating loyalty programs. An effective delight stage helps to boost customer retention, and create advocacy for your brand.
Flywheel vs Funnel: What’s the Difference?
The main difference between the flywheel and funnel in the sales landscape is the focus area.
With a sales funnel, the focus is almost consistently on earning conversions. Companies focus on generating as many sales as possible, and consider engagement and customer delight an afterthought.
Unfortunately, this process isn’t always effective in today’s sales landscape. Today’s consumers are more in control of the sales process. They conduct more research into each business, and the support they’ll get from that company than ever before. This makes it much harder to effectively convert customers with just the right sales strategy or landing page.
A flywheel model shifts the focus to customer satisfaction. You concentrate on delighting, engaging, and delivering value to the customer at every stage of their journey, to ensure long-term loyalty.
In the flywheel model, every action taken by the teams in your company influence each other. Your marketing efforts impact how many prospects move through your sales process. Your sales strategy influences how many prospects will become happy customers. Finally, your support and service team influence whether your customers become promoters, helping your marketing team.
The flywheel model works because it helps to reduce friction in the buying process, and generate trust between consumers and their audience. This is crucial at a time, when 81% of customers trust friend and family member recommendations more than businesses.
With a flywheel, you constantly invest in the momentum of your company’s growth, by transforming prospects into not just sales, but valuable members of your sales and marketing community.
Flywheel vs Funnel: Which is Best?
There’s still some scope in the sales landscape for funnels to deliver exceptional results. However, companies will need to expand their sales funnels beyond traditional levels, to focus more closely on customer retention, and renewal.
The flywheel model represents a powerful alternative to the old-fashioned sales funnel strategy. It allows companies to rethink their approach to connecting with customers, in a way that helps to drive growth momentum. Instead of focusing on a constant “downward push” towards conversion, companies with a flywheel model concentrate on delighting their customers.
By focusing on customer needs and success, companies using the flywheel model can improve their chances of not only accessing new leads, but also retaining more of their existing customers. In today’s competitive world, a shift to the flywheel approach may be the best way to ensure your company can stay one step ahead of the competition.
Learn more about how to build your own sales flywheel with direct guidance from the experts at Hard Skill Exchange. Sign up today to transform your sales strategy.
