Why Marketers Should Replace Funnels For Flywheels

The Sales or Marketing Funnel has been all marketers’ playbook for a long time. It outlines the process by which a customer is taken on the sales journey from the initial Awareness all the way to Purchase stages. 

Throughout this Funnel, marketers start with a wide catchment of potential customers and filter down until they reach a refined number of buyers.  If you have been introduced to a new product’s name, its functions and features, followed by an irresistible promotion to buy it, you have been down one such Funnel.

Recently though, there has been talk of a new method that could change the way marketers work. It is by using the Flywheel. Developed by author Jim Collins in his book Good to Great, the Flywheel is essentially a circular flow with multiple sections that gains momentum through every cycle.

This article seeks to dissect both the old and new methodologies so you can walk away with a clearer idea of which works for your brand.

Significance of the Funnel

The first depiction of the Sales Funnel (or Purchasing Funnel) was developed by Elias St. Elmo Lewis in 1898 to map a customer’s journey from introduction to sales of a product or service. Lewis said that a typical customer will go through four major points of attention before making a purchase, which was referred to as the AIDA Model (Awareness, Interest, Desire, and Action)[1].

Over the years many variations of Funnels were improvised for their purposes, but all retained the AIDA Model at its core.

It is called a Funnel because marketers always start with a wide catchment of an audience which will reduce along the way. Those who fall off the Funnel could be chalked up to errors in behavior and timing. They will then be collected into another pool where another Funnel will be built to hopefully convert them. Marketers kept their focus on those who remain in the Funnel, ultimately leading to the trickled number that converts into sales.

One Way Street

Much like the incredibly successful Industrial Revolution circa 1760, the Funnel was built to resemble a production line. A process is set up like a conveyor belt where resources are inserted in one end and the finished product comes out the other. In this instance, the finished product would typically be a successful transaction.

There is very little one can do after the sale using the same production line. In order to revitalize a set of customers, a new Funnel needs to be created.

Customers are the Product

All the intricate components that make up the Funnel play their part in finding customers through a filtration model. Because the customer lies at the very end of the process, marketers are often more interested in finding ways to sell to them.

Therefore, customers are always the end-product of a Funnel. And because they don’t play a part in the marketers’ quest towards the end of the Funnel, marketers are rarely motivated with building relationships.

Game of Numbers

It is all about quantity, really. Always start with the widest possible list, and trickle down the stages to obtain the most possible candidates to buy their product. Because marketers rarely interact with customers on a personal level, it becomes harder to understand what they really want. Very little is known about those who fall off the Funnel midway, except that they are not interested in the product.

Any form of learning comes from running surveys with past customers, and focus group with a target audience who may or may not have heard about the brand. 

Significance of the Flywheel

A Flywheel is an incredibly huge and heavy wheel that takes a lot of effort to get moving. But after a while of repetitive minimal addition of force, the wheel starts to gain momentum. Eventually, the momentum generated by the wheel will feed into itself and get faster through each cycle.

Here’s how Brad Stone, author of the book The Everything Store: Jeff Bezos and the Age of Amazon[2], describes it:

Amazon started by providing low prices, which would lead to more customers. More customers will lead to more third-party resellers, which helps them spread the fixed cost of their servers and website operation. This ultimately allows them to further lower prices. Feeding any part of the wheel will only accelerate the loop.  

When Amazon bought Whole Foods, everyone thought it was a counter-intuitive move back into retail when the world is just getting serious with eCommerce. But this high-end grocery chain also served as part of their Flywheel as an additional distribution hub[3]. Whole Foods by itself doesn’t have to be profitable, as long as it serves the greater purpose.

The Roundabout

Getting the Flywheel to work isn’t that easy a task. In order for it to work, each spoke is required to transfer to another without breaking. The first struggle will be to create a Flywheel that makes sense to your organization.

The second problem is the patience required to get it moving. There is a certain satisfaction and assurance in starting with a larger pool of audience than a smaller one.

Somehow we want to believe that we are better at converting potential customers than the market average gives us credit for. That is why Funnels are more gratifying in the beginning.

The Flywheel, on the other hand, is a slow-starter. It requires us to focus on linking all the spokes in the wheel. But once it takes off, very little effort is required to get it moving faster.

Customers Are the Contributor

While businesses know we should put customers at the center of our strategies, few actually do so. The purpose of all businesses is to provide value to customers. And it would be ridiculous to not make them part of the planning process.

The Flywheel’s structure built around customers allow businesses to ask the right questions and seek out the right answers.  Changes and pivots can be applied faster and without the need for Focus Groups and Surveys. 

Conclusion

Unlike the Marketing Funnel, building a strong Flywheel incorporates different facets of the company, from Marketing, Sales and Customer Service. It sounds like a lot of work, and it really is. But it is a somewhat necessary evil for any company, as it addresses the crucial connections required in any successful business from the get-go.

Once set up and got running smoothly though, the Flywheel will continuously spin faster and faster without our help.


[1] “Purchase funnel – Wikipedia.” https://en.wikipedia.org/wiki/Purchase_funnel. Accessed 13 May. 2019.

[2] “The Everything Store: Jeff Bezos and the Age of Amazon: Brad Stone ….” https://www.amazon.com/Everything-Store-Jeff-Bezos-Amazon/dp/0316219282. Accessed 8 May. 2019.

[3] “The 1 Principle Jeff Bezos and Amazon Follow to Fuel Incredible Growth.” 28 Jun. 2017, https://www.inc.com/jeff-haden/the-1-principle-jeff-bezos-and-amazon-follow-to-fuel-incredible-growth.html. Accessed 8 May. 2019.

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