During the course of studying my Master of Science in Digital Marketing at NUI, Galway, I studied the concept of inbound marketing. The first thing that was made a priority, was coming to understand and being able to explain Hubspot‘s flywheel.
Inbound marketing is a marketing approach grounded in the idea of attraction. The provision of valuable offers and content will drive the right kind of traffic to your site, which can then be segmented into leads. This approach builds lasting, valuable relationships with customers when performed correctly.
HubSpot’s flywheel can therefore be best explained as the embodiment of an inbound marketing business model. Unlike a traditional marketing funnel, customer’s movement through their buying journey is cyclical.
It’s not enough to make a sale. You’ve got to delight customers time and time again. If you’re interested in an even more in-depth explanation of HubSpot’s flywheel – read on!
HubSpot’s Flywheel Explained
HubSpot’s flywheel is a business model that helps marketers to prioritize creating positive business relationships with customers to accelerate business growth. Hubspot states that at the forefront of its flywheel approach is the premise that company’s that flatter to deceive will fail . Align your success with that of your customer’s and you’ve got a winning formula.
HubSpot’s flywheel model is a metaphor for describing your company that’s all about building momentum. The positive energy you put into relationships with customers will spin the flywheel. The more energy imparted onto a flywheel the faster it turns. So by delighting customers, it stands to reason that you’ll acquire much more positive word of mouth, customer testimonials, and a better share of voice within your market. All of which helps your business grow faster.
Granted, that explanation is rather vague but you get the gist of what I’m saying. Optimize business operations to satisfy customers while decreasing barriers to customer success, and you’ll set your business up to grow faster. Satisfying customers is the key to generating momentum.
How HubSpot’s Flywheel Works on a Basic Level
HubSpot’s flywheel is powered by forces. It’s important to understand how a flywheel operates on its most basic level.
“Attract” is the initial phase. Next “Engage” and then “Delight”. The application of energy to each phase ensures that the flywheel spins with a minimum level of friction. Doing so transitions your customers from “strangers” to “promoters”.
Attraction needs the proposition of value. What can you give to customers that no one else can? Once you’ve figured that out, you can use content marketing, Search Engine Marketing (SEM), paid advertising techniques, social media marketing, and conversion rate optimization to win them over.
Next, you’ve got to make it easy for customers to speak to you. Don’t sell them anything. Instead, engage with them. During onboarding ask them what they need and like. Can you offer some form of personalization to sweeten the deal? Perhaps you can remove some excess touchpoints or use automation to improve the customer experience. Irrespective of what you do, prioritize providing superlative customer experiences during this phase.
Keep your customers satisfied. Your relationship doesn’t end once you’ve closed a sale, it has only just begun.
I’ll talk more about adding force to the flywheel later.
Flywheel vs Funnel – How the Flywheel Boosts Growth
The biggest draw of the flywheel is the emphasis it places on customer retention as well as satisfaction. Focus is always fixed to prioritize delivering the superb customer experience to generate future sales. With a funnel approach, you’re pouring effort and energy in to receive certain results without prioritizing the repeatability of the process.
That’s a problem because it ignores the fact that the people who have passed through a marketing funnel have the ability to influence those entering the funnel. This feat can be achieved through word-of-mouth marketing and earned social media. For example, someone buys a pair of shoes and leaves a positive review, making others happier to make the same purchase.
So the funnel approach is different to the flywheel model in that it does not recognize the ability of customers to influence one another at all stages of the sales cycle. So what does that mean? Well, if someone leaves your unhappy store and when asked how they found their experience they could stop others from visiting your store. For example, you buy a coffee from Cafe X and it tastes awful. Your friend has never tried Cafe X but has exciting plans to visit next week. You tell them about your experience, which leads to them deciding against the Cafe.
The flywheel business model feeds on this energy. Therefore it’s always attracting, engaging, and delighting customers. Resulting in greater customer satisfaction, less churn, and increased profitability. It’s not enough to delight customers at the initial point of sale. Instead, the flywheel preaches satisfying them constantly at all touchpoints even after a deal has been struck to maximize the growth potential of customers, which the funnel tends to ignore.
Flywheel Marketing using Inbound Marketing Strategies
The core tenet behind flywheel marketing is therefore straightforward. Every action you take must ensure that the flywheel spins faster. To achieve this feat, you must engage in different types of customer-driven marketing practices. Of course, this fact depends upon the stages of the flywheel customers find themselves. Let’s take a look at the forces which can be applied to the flywheel throughout each stage.
Attract – Build Trust Through Accessibility
Hubspot state that during the attract phase you’re trying to make your company as accessible to customers as possible. Lure them in. Provide useful information and marketing offers to do so but don’t be too pushy or sales-oriented. Build trust with your customers as if they were your friend using the social selling approach. This can be achieved using forces such as content marketing, SEO, social media marketing, CRO, and more.
Engage – Making Closing a Solution not a Sale
To engage your customers, HubSpot recommends making it incredibly easy to buy and communicate with you using their preferred channels at their convenience. Again, don’t get too bogged down in closing. Yes, keep it solution-oriented but also try to endear your business to customers. This can be achieved through email personalization, lead nurturing, segmenting audiences, and speeding up repetitive processes using automation. For example, not having to input login details every time.
Delight – Customer Satisfaction Leads to Faster Growth
Put simply, happy customers lead to more customers: Churn decreases meaning customer retention increases, while customer renewals increase and so does overall revenue. You’ll also benefit from WOM and eWOM as customers tell their friends and family how great your offerings are. HubSpot suggests providing a knowledgebase, chatbots, proactive customer service, loyalty marketing, customer surveys, and multi-channel communication as means to keep customers satisfied with your service.
So in a nutshell, you apply the above forces to keep customers satisfied and encourage your business to grow.
Inbound Marketing and the Inbound Methodology
Inbound marketing and content creation is a fine example of a flywheel approach to satisfying customers as a means to enhance growth. Inbound revolves around what a business can do to attract customers to its offerings. Take Hubspot, the provider of inbound marketing, sales, and CRM software to its customers
HubSpot is recognized by many as being the thought leader in inbound marketing. That’ll tell you how effective the company’s flywheel business model truly is.
What is Inbound Marketing? What is Inbound? What’s Going on!
Inbound marketing is the process of attracting customers to what you’re selling through the provision of value . It’s not pushy or overly sales-oriented. Instead, it focuses on helping customers access useful information and marketing offers.
Inbound is now widely recognized as a mindset. It has its flaws, but I’ll talk about its criticisms later. Right now I want to discuss the inbound philosophy HubSpot promotes so vehemently. In a video posted back in 2019 HubSpot refers to the Inbound philosophy as being “customer-centric” and “human”.
The flywheel is the business model that supports such a business strategy because it serves to build and harness the power of business relationships. Crucially, it does so in ways traditional business strategies cannot.
That’s because the flywheel champions the customer and makes them the hero within their buying journey. What does that mean? Well, it just means that customer’s challenges and obstacles are solved. Hence a flywheel marketer seeks to eliminate obstacles to customer success and then profit from the positive relationships born thereafter.
In contrast, the stereotypical funnels approach to sales is much more results-oriented. The focus is firmly fixed on ensuring financial KPIs are met. Essentially, it’s very cutthroat and there’s little to no compassion shown to customers.
HubSpot describes the inbound methodology as customers as it helps the parent company grow fast, but its happy also boost growth dramatically.
Inbound vs Outbound Marketing
Inbound marketing’s business methodology revolves around the idea of attracting customers through the provision of value and the process of satisfying their individual needs. Conversely, outbound marketing is a methodology that needs the pushing of offerings to sales-qualified leads.
An Example of Inbound Marketing and an Example of Outbound Marketing
When you Google search “where to find the best boots for hiking” and click on a search result, that company has successfully used SEO and content for inbound. In contrast, if a company rings your business trying to sell you hiking boots, that’s outbound marketing in action.
Inbound attracts, outbound pushes.
The Reality of Inbound and Outbound Marketing
Thus far inbound marketing has been hailed as an all-conquering marketing methodology. It’s focused on attracting customers by solving their pain points and works exceptionally well with a flywheel model. It’s low cost and provides proven results. So, what’s not to love?
You Need Outbound Marketing to Achieve Optimal Growth
Outbound marketing is incredibly useful, meaning you’re weakening your business by ignoring that fact. Here’s an example that should make what I’m saying crystal clear.
So, I think HubSpot is the thought leader in inbound marketing. They provide courses, e-books, blog posts, videos -you name it! And yet, HubSpot uses outbound sales processes to attract customers. Let’s take a look at why that is.
Why Inbound and Outbound Marketing Compliment Each Other
Inbound is all about attraction and the formation of positive customer relationships by satisfying customers. The downside of that fact is simple: time. It takes a long time to effectively create an inbound marketing strategy.
You’ve got to perform a SWOT analysis of your current inbound efforts, spend a long time gathering data on your customers, map the buyer’s journey, and then plan using SMART objectives. That’s all early doors stuff when it comes to implementing an inbound strategy. You’ve still got to go and create enough content to become an expert in the eyes of Google and build your brand’s equity. Then you’ll need software, to maintain, and of course, improve content. It’s worth it but it takes time.
The beauty of outbound is that it doesn’t take as long and can also be really helpful to customers. For instance, if you’ve invented the groundbreaking facial dubbing technology, it would be pretty smart to find qualified leads (SQLs) who you wouldn’t be able to reach using inbound means.
It makes sense. You can have the best offering in the world, but if SQLs with high potential customer lifetime values don’t know about it you’ve already lost. That’s why HubSpot uses both inbound and outbound means of reaching out to customers to peak their interest in HubSpot’s offerings.
Two Alternative Business Flywheel Templates & Examples
HubSpot isn’t the only company to come up with a flywheel template. There are in fact many companies out there that have made a flywheel template that better their individual business strategy and goals.
Product-Led Flywheel Growth Strategies
A product-led growth flywheel is extremely useful for businesses that distinguish themselves through a superior product experience. Zoom is an example of one such company, the communications giant operates using a freemium business model meaning the key to marketing its offering is an unbeatable product. Overall, SaaS providers tend to benefit more from a product-led flywheel as the competition is fierce and all competitors are offering a similar customer experience.
Using the Flywheel for eCommerce
Amazon used the flywheel strategy to stunning effect as they are now the largest company in the world and Jeffrey Bezos has more money than he’ll ever need. Amazon holds over 50% of the US’ eCommerce market share , which is absurd if you actually stop and think about it. Amazon flywheel marketing is simple yet effective for growth.
The online marketplace did everything it could to give customers a superb UX, and then kept users, new and old, coming back for more by constantly lowering prices. Making Amazon’s flywheel spin faster and faster on its own with less and less input from the company. Amazon’s market cap is outrageous at $1.6 trillion and the company is constantly investing in new ventures backboned by its constant flywheel inspired growth.
Other Companies Using the Flywheel Effect
The Flywheel Effect | Force vs Friction
Back in November 2018, the Harvard Business Review published an article with the co-founder of HubSpot, Brian Halligan. Halligan and his fellow co-founder Dharmesh Shah have a super book on inbound marketing that I really enjoyed reading if you’re interested.
Anyway, the key point within the article is that the Sales funnel is outdated. The digital age has made it so that it’s impossible to get away with failing to satisfy customers with word of mount becoming more and more important. Halligan talks about how failing to satisfy customers causes the flywheel to lose energy, meaning lost customers work against growth. And the same goes for satisfying customers increasing growth.
Halligan talks about how consistent inbound marketing has enabled HubSpot to create positive momentum . He says that their marketing department could take “a month” away from their roles and the company would still grow due to the flywheel effect.
Force application causes the flywheel to spin faster. Back when information wasn’t as accessible online, Halligan says Sales was the best means of applying force. However, since 2005 there has been a strong shift toward marketing. That’s because customers and sales reps now possess the same amount of information courtesy of the internet.
Exceptional content marketers could attract customers to win the day. However, in contemporary times that’s no longer enough – customer satisfaction is what’s needed now. Specifically, delighting current customers is the best way to get new customers and retain existing ones.
Friction is the opposite of force where the flywheel effect is concerned. Customers who leave your company cause friction that results in even more customers leaving your company. So you need to limit it at all costs.
Luckily, according to Halligan, eliminating friction is easy. You just have to listen to your customers and improve your service to better solve their pain points. Of course, it’s not that simple but it’s the general premise. Social listening tools could be hugely beneficial here, customer surveys, and analyzing third party reviews.
To reduce Flywheel friction Halligan suggests:
- Using automation to speed up the customer journey as much as possible
- Investing in making the customer experience seamless and delightful
- Training employees to become better-rounded problem-solvers thus reducing handoffs and reductions friction as handoffs delay the sales cycle
HubSpot – Frequently Asked Questions
Question: What is (the Meaning of) HubSpot’s Flywheel?
Answer: A flywheel is a business and marketing metaphor that conveys how creating a positive customer experience helps a business grow. Just like spinning a flywheel makes it gain momentum, so does customer satisfaction. The more satisfied customers become, the greater the momentum. Meaning customers won’t churn (think centrifugal force) and leads as well as sales will increase thus forcing the business to grow.
Question: What is the Flywheel Approach?
Answer: A flywheel business model is an approach that uses the power of customer satisfaction to accelerate business growth. If you think of customers, you should realize they’re more than just potential sales. They’ve got oceans of untapped potential as brand advocates, which business people tend to ignore for one reason or another. In short, the flywheel approach uses satisfied customers to help a business get more customers and grow quicker.
Question: What is the Flywheel in Inbound Marketing?
Answer: The flywheel in inbound marketing is a way of thinking about how you’re going to attract customers, the essence of inbound, but then go one step further to prevent them from churning. The strategies that help businesses achieve those feats within the flywheel are “Engage” and “Delight”. An inbound philosophy when combined with the flywheel is all about building momentum to create trust and credibility.
Customers will then look at a business as genuinely interested in helping them, as they’re supported across every touchpoint throughout their customer journey. During inbound marketing, the flywheel is the idea that once you attract customers you must continuously strive to satisfy their needs to earn positive word of mouth, referrals, and so on.
Question: What’s a Customer Flywheel?
Answer: It’s a metaphor for increasing the number of satisfied customers thus decreasing churn and benefiting overall business outcomes. A customer within the flywheel is kept in play through business momentum. The discussed earlier, the flywheel spins and slows due to forces. Positive forces, such as content marketing and multi-channel communication, make the flywheel spin faster. Negative forces, examples include poor customer service and failure to fix UX issues, cause the flywheel to lose momentum.
Hence negative forces cause friction, which causes the flywheel to slow. As the flywheel slows, customers must fall off and that’s not good because it leads to negative WOM, eWOM, and other forms of social media earned that slow the flywheel’s momentum even further.
Overall, the flywheel is a tremendous metaphor when trying to understand business growth. Happy customers make more happy customers, so building a business that strives to satisfy customers makes total sense. The flywheel also caters to customers that don’t follow a linear sales cycle . That means you can still close deals with customers who would have traditionally been deemed unqualified and therefore discarded from the marketing funnel. What’s more, it’s a super way of building and maintaining customer relationships. Overall, HubSpot’s flywheel is worth it.