DECEMBER - 2020retailtechinsights.com8By Shahid Nizami, APAC Managing Director, HubSpot [NYSE: HUBS]Shahid NizamiWhy growth companies are adopting the flywheel over the marketing funnelIN MY OPINIONIn 1898, advertising executive Elias St. Elmo Lewis developed the concept of the marketing funnel. He conceptualized it by breaking down the buying journey into distinct stages: awareness, interest, desire, and action. Today, you can walk onto the marketing or sales floor of any modern office and chances are you'll see a funnel, hear people talking about a funnel, or be asked to draw a funnel yourself.Despite its 120-odd years of success, we have come to realize the funnel's one fatal flaw ­ it views customers as an afterthought, and fails to recognize how delighted customers can grow a business further.According to a report by HubSpot Research, 81 percent of buyers trust their families' and friends' recommendations over a company's business advice. Customer referrals and word-of-mouth have become one of the largest influences on the purchase process, meaning that marketing and sales professionals need to view customers not as an afterthought, but a driving force that is key to helping a business grow better.Keeping customers at the core of business decisionTo reflect the importance of customer obsession today, it is the concept of the flywheel that should be adopted instead. A funnel loses its momentum at its last stage (i.e. when someone becomes a customer). In contrast, flywheels leverage the momentum from customer interactions to keep spinning.Invented by Scottish inventor James Watt, the flywheel is simply a wheel that is incredibly energy-efficient. The amount of energy it stores depends on how fast it spins, the amount of friction it encounters, and its size. These can all be translated to a business' efforts in sales and marketing. When you think of your business as a flywheel instead of a funnel, you make very different decisions.Unlike the funnel, the flywheel considers the business's customers as a growth engine. Alignment across marketing, sales, and customer service is crucial in creating a positive customer experience to ensure that the flywheel keeps spinning and that a company's customers turn into advocates.On the other hand, when friction is present between these teams and processes, the customer experience suffers and the flywheel is prevented from spinning faster. The funnel depicts customers as an output, when in fact, they are an input, helping to grow the business through word-of-mouth.
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