Many businesses are shifting from the Funnel model to the Flywheel model due to the evolving consumer landscape and the increasing importance of customer experience in driving business growth. While the Funnel has traditionally been effective in converting leads into sales, its approach often results in a fragmented customer journey and does not prioritize ongoing customer engagement after the sale. Let’s explore this transition in greater detail and understand why the Flywheel is becoming the preferred choice for many businesses today.
The Funnel model has long been a staple in marketing and sales strategies. It operates on the principle of attracting a large number of potential customers (leads) and then guiding them through a narrowing path until some of them convert into paying customers. The typical Funnel process includes:
While this approach has proven successful in many cases, it inherently treats the customer journey as a linear process that ends at the point of sale. Once the sale is made, the customer is often seen as an outcome, with little emphasis on their post-purchase experience or continued engagement.
The Flywheel model, in contrast, puts the customer at the center of the business strategy. Instead of a linear progression, it views the customer journey as a continuous cycle where each interaction adds momentum to the business. Here’s how the Flywheel functions:
The Flywheel model places a strong emphasis on providing a seamless and enjoyable customer experience throughout the entire purchasing journey. Unlike the Funnel, where different business areas may work in silos, the Flywheel encourages a unified approach. This means marketing, sales, and customer service teams work together towards a common goal: delighting the customer.
A consistent and positive experience across all touchpoints can significantly enhance customer satisfaction. For instance, if a customer encounters an issue, the Flywheel ensures that the support team is fully aware of their history and preferences, leading to a quicker and more personalized resolution.
The Flywheel not only focuses on acquiring customers but also on retaining them and turning them into loyal advocates. By delivering a superior customer experience, businesses can foster long-term relationships, leading to higher customer retention rates. Studies show that even a 5% increase in customer retention can boost profits by 25-95%.
Loyal customers are more likely to make repeat purchases, reducing the need for constant new customer acquisition. They also tend to spend more over time, contributing to a higher customer lifetime value (CLV).
In today’s market, trust in companies is declining, and customers are more likely to rely on recommendations from friends and family. The Flywheel leverages this by encouraging satisfied customers to share their positive experiences, generating organic referrals and driving new business.
Word-of-mouth marketing is incredibly powerful. According to Nielsen, 92% of consumers trust recommendations from friends and family over any other type of advertising. By focusing on delighting customers, the Flywheel model creates enthusiastic brand advocates who willingly share their experiences, amplifying the business’s reach and reputation.
The Flywheel is designed to maintain and build momentum over time. Happy customers contribute to the Flywheel’s energy by leaving positive reviews, sharing their experiences, and making repeat purchases. This continuous cycle of engagement and advocacy helps sustain and accelerate business growth.
Unlike the Funnel, which often loses energy once a sale is made, the Flywheel gains momentum with each positive customer interaction. This perpetual motion drives sustainable growth, as each satisfied customer brings in new prospects through their endorsements.
Consumers today are more informed and have adapted to various purchasing methods. They often seek out reviews and recommendations before making decisions. The Flywheel model aligns with this behavior by focusing on building a strong, positive reputation through excellent customer experiences.
With the rise of digital platforms and social media, customers have access to a wealth of information and opinions. They are more likely to trust user-generated content and peer reviews over traditional marketing messages. The Flywheel capitalizes on this trend by prioritizing customer satisfaction and leveraging it to attract new customers.
In previous years, the Funnel has brought great successes in many businesses, but as time went on, customers learned to adapt to different purchasing methods. Today, trust in companies is hitting an all-time low. Rather than trusting the company for all of its information, customer referrals and word-of-mouth have become some of the most influential parts of purchasing decisions. As many as 81% of customers are trusting their friends’ and families’ advice before trusting any companies’ advice. Browsing around on review sites or asking close contacts for recommendations before making any purchases has become an essential step for many today. This leaves an immense untapped area of potential that the Funnel cannot reach.
In comparison, Flywheel focuses every part of the business on enhancing the customer experience. When the business focuses on a great customer experience, it reaps the benefits of its customers’ powerful testimonials as customers are more likely to become loyal to the brand and to share the experience within their social circle or online. This can help drive awareness, interest and lead to sales. Not to mention, just having a 5% customer retention rate can boost profits up to 25-95%. This then helps to add more momentum to your business’s growth, which is another key part where the Funnel lacks.
Ultimately, the goal for the two models is to convert as many leads as possible into sales, but the key difference is what happens to these customers after they have made their purchases and how this can contribute to the business. With all these differences in mind, it is quite apparent that the Flywheel model is more suitable for today’s consumer landscape. This is not to say that the Funnel should be discarded completely as each business functions differently and both models can benefit businesses in different areas, but it would be beneficial to review how switching to a Flywheel can help grow your business.
If you would like to learn how to move your business from a Funnel to a Flywheel, schedule a call with our consultant today to find out how!
