If you have never heard of the “flywheel model” in marketing, let’s start by saying this – it represents an anti-thesis for the sales funnel. Unlike the funnel, the flywheel model puts customers at the center, making them happy and which, in turn, provides the company with recommendations and increased sales.
In this blog, we will try to answer why, due to the marketing flywheel model, it is worth leaving the old sales funnel and how to use it to create a positive user experience as your business grows, at the same time, and brings in more revenue. Let’s just first explain what the sales funnel is so that you can have the full picture of the flywheel model…
Sales Funnel Is the Foundation of Marketing
You started building a house without a project, you wasted time because the workers collided on the construction site, you lost money because the ceramicist did his share before the plumber, so now you have to break the tiles to install the pipes… The same thing happens when you start a marketing campaign without a sales funnel.
What is that famous sales funnel? It is a campaign plan. The sales funnel is a plan, construction of your campaign that consists of several parts. It is easiest to explain it with a practical example of selling a product. Once you understand the essence of the funnel, it will be clear to you why and how much money you spend, which parts of the campaign bring you profit, and which parts only spend without effect.
You posted ads on Google, Facebook, paid for banners on two websites, you also have an influencer who advertises you and you came to the conclusion that your sales are like this: Out of 1,000 people who saw the ad, 20 of them bought the product – that is 2 % of people. To clarify, a thousand people saw the ad – everything is clear there. How many people clicked on it depends on the quality of the ad and the target audience to which you show it. You have 200 people or 20 % of those who clicked and opened the ad. They read the content or offer and entered your site or closed it down and moved on.
There were 100 visits to your site (10 %) from the total number of people who saw the ad. With more advanced settings, you can also measure how long they stayed on the site – if they spent less than 30 seconds, it is likely that your site is inaccessible, unclear, or if they opened via mobile, it is not adapted for mobile. If you lose a lot of people in this part of the funnel, you will know that there is a problem with the site.
We came to the part where someone put the product in the cart. It is not clear to you how 10 out of 30 people (3 %) changed their minds. Well, you at least once bought online yourself, so you know that sometimes you click on the cart just to see the postage, options, total amount, etc., and give up. At the end of the funnel, we have 20 people left, i.e. 2 % – they are real customers. They, as marketers would say, ‘converted’. This is called the conversion rate, and it represents the ratio between the number of people who saw the ad and those who bought the product. In this case, 1,000 / 20 = 2 %.
What Percentage of Conversion Is Required for a Successful Campaign?
It depends on how much you earn. Earnings on a specific product are $ 100. The cost per click is $ 2 (whenever someone clicks on an ad whether to buy or not), you have 200 clicks times $ 2 – that is $ 400. That is how much a campaign costs you.
You sold 20 pieces of product at the end of the campaign, times $ 100, that is a total of $ 2,000. When you subtract $ 400 from that number, you come to a figure of $ 1,600. Those are your earnings. If your earnings per product are $ 100 and the cost per click is also $ 2, you will get $ 2,000 minus $ 400 for the 20 products sold out of 1,000 ad impressions. This is much clearer, right?
How to Analyze a Campaign?
You have sold, for example, 35 pieces of a given product. You need to see how your campaign went and how successful the advertising channels were. For example:
- On Google, out of 100 clicks on an ad, you had 9 customers – that is ideal. This means that a large number of your customers come from Google. You should strengthen this advertising channel.
- Facebook gives poor results – only 2 sales. Should you give up on this channel? No, give it another chance. Check how you set up your target group, maybe your ad is showing only to a specific audience. Change this filter to another, but similar target group and you will see that the results are better. If, despite all the corrections, you do not have good results, then your product is not for Facebook advertising. Cancel the ads there and transfer the funds to the selling channel that actually sells and leave Facebook for remarketing.
- A banner on a forum converts perfectly. The percentage is, say, 10 %, which means that there are people on this portal who are interested in and need your product. Increase advertising on this channel.
- The banner on a site you have chosen gives very bad results, e.g. 0.1 %. There seem to be a lot of people here who just read, but aren’t interested in shopping. No matter how much you invest in this channel, there will be no effect. Cancel it and switch funds to the converting channel.
- Influencer makes videos for children that parents watch with them and you have satisfying sales on this channel. Leave it for now and follow on. Make a video ad and try YouTube marketing.
What we mentioned in the second item, and it is very important to explain, is remarketing. These are people who visited your site, saw what it was about, but did not make a purchase. You collected them via Facebook Pixel and now, your ads are ‘chasing’ them. You will have a good conversion rate there.
Remarketing is always a good channel as people who have almost reached the end of the buying process are a ‘turned on’ audience and convert much more easily.
Advantages of Using Flywheel Model in Marketing
If you are a marketing professional, you probably know every detail of the marketing and sales funnel. But in case you aren’t, we explained it in detail in previous paragraphs. Funnels are nothing but mechanisms for turning potential customers into real ones. And that is that. That is the essence. What happens next is often not something that gets a lot of attention. At this exact moment, the flywheel model takes charge.
One of the biggest and most important benefits of using a flywheel model is that it helps focus on improving customer ‘journey’ even after they have completed a purchase. The point is – nurture them from the first moment they become customers until the stage when they become experts in the subject (gain expertise for your product and/or service) and brand advocates.
There is one universal image of a flywheel model that illustrates in the best way what we are talking about. We will describe it: the customer is in the center or heart of the wheel and each of the areas of focus around the center represents the way they are encouraged to become ‘champions’ in the business, which is the ultimate goal of the flywheel model.
The model also effectively identifies the causes of friction in marketing, sales, and services. Based on it, you can clearly see which activities speed up your flywheel, adding more and more momentum, or which activities slow you down. Finally, the model also describes in detail the impact of customer satisfaction on the success of your marketing strategy. In short – satisfied customers are equal to a larger number of customers.
Below are some tips and tricks for effectively using the flywheel model to provide a great user experience. Read them carefully…
5 Ways to Use the Flywheel Model to Provide a Better Customer Experience
If you are convinced that your business needs to make a change, addressing the challenges associated with the above should be at the top of your list of priorities. Fortunately, you probably already have what it takes to make your own flywheel for your business to thrive. Just go back to your sales funnel for a moment and review which parts can fit into which stage of the flywheel and get started.
The following are important steps to take advantage of the flywheel model and optimize the user experience…
Step 1: Re-Educate Yourself About the Different Stages of the Flywheel
You will, of course, have to adjust the stages of your flywheel. There are several variations, but we will take the following as an example:
- Phase 1: Activation
At this stage, you want to make it easier for non-users (or evaluators) to become new users (or beginners).
The goal is to convince potential customers of the value of your product or service. One of the best strategies for this is to build a website, and then launch that Internet presentation, which will show your expertise, give examples of product use, provide useful tips, and add value. By doing so, you will get the opportunity to gather users’ emails with a set of features that can save a lot of time handling these emails and are provided by platforms such as VerticalResponse. Other ways include giving free trial versions or creating free plans (packages).
- Phase 2: Adoption
In the adoption phase, you find ways to ensure that your customers come back to you, making your solution first on the list when they face a specific need or task. This is the stage where you need to focus on making beginners regular users, who now fully accept your products or services and who are now looking for other (perhaps more valuable) offers from you.
Find new and interesting ways to attract new customers and make them come back to you while encouraging the feeling that your products are exactly what they need. These are the ways to do so:
- Create detailed product guides and instructions
- Highlight new or neglected product or service features
- Phase 3: Worship
The worship phase is what converts regular users into people who truly enjoy your products and services and look forward to their regular use.
Here are some examples of how to make customers feel affection for your product:
- Share useful posts and success stories
- Use surveys and feedback forms; ask about the features or benefits your customers would like to see
- Encourage customers to upgrade to premium plans and take advantage of hidden benefits
- Phase 4: Advocacy
The final stage means that your customers are now helping you reach new customers and, at the same time, helping you to raise awareness and bring people into your network.
This phase often relies on testimonials, reviews, and user-generated content. You can also consider encouraging customers to represent your products, such as launching affiliate programs, reward systems, etc.
Step 2: Set the Appropriate Metrics for Each Flywheel Phase
Set some concrete metrics for each step of the flywheel now that you know where you need to focus your resources.
Using the same example, your indicators should include the following:
- Activation: new qualified potential customers; new trial registrations or initial sales per month
- Adoption: how many customers have achieved value (compared to the total number of new customers); the number of customers who complete the process
- Worship: retention rates; average revenue per user; lifetime value (LV)
- Advocacy: new leads recruited by current customers; registration for an affiliate program
Step 3: Accurately Identify and Fix Critical Areas (Friction Areas) On Your Flywheel
After identifying the KPI (Key Performance Indicators), pay attention to the areas that can cause friction on your flywheel. Look for things that can slow down the pace of gaining new leads, retain loyal customers, and prevent current customers from leaving your brand.
Here are a few areas of friction you might want to fix based on each of the phases in our model:
- optimizing campaigns to retarget potential customers
- website security (potential customers will most likely not want to buy from you if you have an unsafe website)
- coordination of teams (marketing, sales, and customer service representatives should be harmonized with new promotions, functions, announcements)
- the existence of consistent and efficient writing of advertisements on your pages, blogs, and knowledge bases
- regular updating of embedded and demo files
- ease of upgrading (e.g. from Free plan to Pro plan)
- improving the personalization of your content
- ease of getting support (live chat)
- ease of recovery and billing
- application of new product benefits based on surveys and feedback forms
This phase includes only ease of sharing products or content that promote your product (e.g. encouraging content or reviews currently generated by users).
Step 4: Conduct CRO Tests and Experiments
Conversion rate optimization (CRO) will always be a continuous process for your business. There are several primary elements that fall into this task, so you will be constantly reviewing, testing, and refining them.
Let different and frequent CRO tests become your habit. See which campaigns best drive sales or nurture current customers, or even encourage customers to recommend your business. You will always want to look back at your flywheel phases and increase those KPIs and areas of possible friction that you have previously identified. Experiment with different processes and campaigns that could improve results for each phase.
Some examples of CRO tests for each phase include:
- Activation: testing different examples of landing pages and designs that make the most purchases or registrations
- Adoption: experimenting with putting a few neglected features as the main ones to upgrade
- Worship: experimenting with one-click feedback or detailed survey forms on a page
- Advocacy: testing different styles of sales promotion awards
Step 5: Monitor and Evaluate Your Results
As with the regular flow of sales, you need to constantly monitor and evaluate your flywheel model. Periodically review the strategies and indicators you set at the beginning of the campaign, and make changes as needed. Another benefit of the flywheel model over the marketing and sales funnel is that it helps protect and secure the wheel of your business (attracting customers, nurturing, and encouraging referrals), and helps to add momentum and encourage stable conversions.
A quick test of whether you are hitting those goals and growing faster than before or not is also important. Ensure customer satisfaction, follow customer recommendations, check sales and cross-selling, and find any loopholes that may affect your business.
Thanks to Justin and Dave from Urban Splatter for their precious help to create this research regarding this publication.
The flywheel model can be the most important model that modern companies can adopt because it puts customers at the center of every business operation that moves the company forward. While this can take time and change, the process pays off if you can enjoy the constant growth driven by consumers and fans of the brand.