Have you ever wondered why in spite of structuring your business in the widely used Sales Funnel Model, there seems to be something that restricts your company’s growth? The answer might be the Funnel Model itself.
The times have changed, and today, the funnel model is dwarfing businesses’ growth potential more than ever. Today, the third-party review sites, peer to peer recommendation, content in the company’s social media, word of mouth plays a significant role in customer’s buying decision and therefore are the primary factors of which the Flywheel model is based on. Unlike the funnel, the flywheel uses the delighted customers’ momentum to bring in more sales, thereby making them the driving force of the continuous sales cycle.
Understanding the Sales Funnel
The inception of the sales funnel was in 1898 when the advertising hall of famer E.ST. Elmo Lewis developed a sales tool that theoretically explains a customer’s journey from the brand obscurity to them making the purchase. The funnel historically is made of different sections culminating in a paying customer.
Awareness – At the top funnel exists the “awareness stage,” where the main motto is to reach as much audience as possible, popular strategy used for awareness are TV ads, radio ads, newspaper ads, also display ads in internet etc
Interest – Immediately after comes the “Interest stage,” focusing on influencing the audience into prospects and finally to make sales. Here, now aware prospects are fed with the product information and are made ready for the sale.
Decision – The “Action stage” is the final stage of this growth model. where the prospect becomes the customer and performs the sale.
These sections were placed diligently, starting from creating awareness to an audience to their eventual conversion, and after a successful conversion the process runs once again from the scratch.
The Problem with the Funnel.
In spite of being a long-standing business model that educated businesses in the sales process and provided a structure for implementation, there always was something off even at its inception. Please make no mistake about it, the sales funnel is a phenomenal insight to have, but we are saying that it is not without its limitations. These limitations have businesses stuck under a glass ceiling or, worse, killed them.
Some of the major Funnel problems that cannot be ignored
- The funnel has mapped the customer’s journey to be linear, which is not at all the case, at least not in this age of information and global connectivity. Now, people don’t always first see your awareness content, then move on to the knowledge stage that you have set up, so on and so forth. There are multiple paths a prospect might take to reach a purchase stage. The customer journey today is not sequential, nor it is singular.
- The sales funnel structure implies that the sale is the end, and the customer is the end product. This is a bit anticlimactic. All the time spent, energy exhausted, and resources used up seem to be on the higher end to lose the customer. The cost of acquisition is greater than the cost attained during the sales, so to lose customers after exerting this much effort cannot be afforded.
- Another major issue with the funnel recommended structure is that it facilitates each of your company’s teams (such as the Marketing team, sales team, service team and operation team – to name a few) siloed from the other. This can result in delayed processing of any one team or a team acquiring an annoyed customer from the other team (having their work cut out for them). These could result in the customer having a bad journey and mindset never to come back again.
Hubspot and the Flywheel model
Hubspot is a CRM platform with software aiming to help businesses acquire and retain their customers. Hubspot uses the inbound methodology for this process of reaching out to customers who are actively seeking solutions for their needs. Identifying your customer goals and their expectations from your brand will foster a good relationship with both parties (business and your customers). Much of Hubspot’s efficiency is due to the circular growth model it came up with called the Flywheel model.
In the Flywheel model, the customer is not seen as an end product, the afterthought or as just an output; but as an accelerant or as the source that could bind the sales model’s head and tail moving the cycle continuously.
The analogy is because, not unlike the real world flywheel that is energy efficient invented by James Watt, the Sales flywheel model uses its happy customer momentum to keep the cycle moving, thus not wasting the huge amount of work put in the customer acquisition process.
A customer centric growth model
An accurate way to define the flywheel sales model is that it is a growth model powered by the customer rather than (just) for the customer. Here the customer is everything. The whole model of flywheel is designed around creating a delightful experience for the customer. In flywheel even after the customer makes the sales, their journey is not finished. After a successful sale, the satisfied customer is followed up by the service team or other experience-enhancing strategy such as a beneficial referral program making the customer part of the business. The three parts of flywheel that verbalize this customer-centric cycle’s core ideology are Attract, engage and delight.
Attract, the first phase is where strangers whose need can be resolved by your business are attracted through tools such as content marketing, SEO, social media marketing, social selling, target paid advertising and conversion rate optimization.
Engage phase comes next; here, an authentic relationship is built with the brought in prospect. This is done through strategies such as website and email personalization, database segmentation, marketing automation, lead nurturing, using multiple communication to engage (chat, call, emails), sales automation, lead scoring and trail/ sample program.
Delight is the next objective in the cycle, giving the customers to solve their needs using your valuable product. And when the customer is delighted by the solution and by the journey they have been through, care is taken to use their delight to spin the wheel once more, creating a self-sustainable sales cycle. Some of the tools that will help get the users satisfaction to power the wheel are chatbots, proactive customer service, multichannel availability, ticketing system, automated onboarding, customer feedback surveys, and loyalty programs.
Advantages of the Flywheel model
The effectiveness of the flywheel sales model depends on factors such as the speed that is imposed, the amount of friction it has to deal with and how big the whole process is. Therefore any business that addresses all the three deciding factors are meant to have the most success.
Recognizing the multiple paths a customer takes to reach the sale, business with the flywheel approach invests in the third-party review sites, peer to peer recommendation, content in the company’s social media, word of mouth plays; leaving no stones unturned. This limits businesses from encountering any ambiguity.
And while a customer is involved in a business that employs the flywheel sales model, he/she is guided by all of its internal teams through the journey. The model enables the marketing, sales, operation and services teams to work together to avoid any confusion/ wait time that is common with the traditional linear approach.
Adios sales funnel
The funnel has been the long-standing growth program that educated salespeople and businesses alike to grow their sales. Despite having holes in the model, it was not a complete failure. But the recent development in customers’ mindset demands a new model that is tailor-made to help them reach their goals and solve their needs. Enter Hubspot‘s flywheel sales model that checks all these requirements.
In contrast to the funnel, the flywheel does not have a linear expectation of customer journey; it recognizes the multiple paths today’s consumer takes and builds personalized journeys for each of the customers. Also all of your company’s internal teams like management, sales, service and operations work together sharing the customer’s data, making it the onus of all teams to provide the customer with a wholesome experience and the flywheel sales model do not see customers as the end point of the model but as the centre and source that would run the cycle self sufficiently.