The sales funnel is coming of age: the flywheel

Like so many things in life, the sales funnel has evolved. Although many online marketers have only heard of it since the rise of online marketing, it is one of the oldest (and most successful) sales models in the world. But now it is being replaced.

In this article, we look at the latest developments in the market and explain why the ‘sales funnel’ is being – and should be – replaced by the ‘flywheel’.

The sales funnel explained briefly

The sales funnel has a long history. It was conceived in 1898 as part of the development of the AIDA formula:

• Attention
• Interest
• Desire
• Action.

This marked the beginning of the journey from prospective customer to customer. At the same time, the formula also forms a cornerstone of modern online marketing thinking: the so-called customer journey through the sales funnel. Using this, marketing – or a specific marketing strategy – is explained in a clear and tangible way, so that the AIDA formula can be used to identify errors and weaknesses and, where possible, to optimise the strategy.

So far, online marketing has worked flawlessly using this system. In the context of digitalisation, trust in traditional sources such as television or print editions of magazines has begun to wane. The online marketing of the future will instead take place within the framework of a new form of word-of-mouth. Recommendations from trusted friends and acquaintances are having a greater impact than ever before. The principle of ‘recommendations from friends’ has evolved into influencer marketing. This embodies the ‘funnel’ like no other sales channel: first, a target audience is addressed through images, videos and text, and their core interests (e.g. fashion, food, music…) are catered for. These are grouped into ‘extended interests’, meaning that products and services which might appeal to this group of people with core interests are promoted within the influencers’ posts. As these ‘digital friends’ and ‘stars’ use such products themselves, a desire to own them develops among the consumer group until a purchase is made.

The funnel therefore works as follows: 1. Grab attention (Attention), 2. Generate interest (Interest), 3. Create a desire (Desire) and 4. Prompt action (Action). — Hence: the AIDA principle.

The problem with the sales funnel in (online) marketing

Arguably the biggest problem with the sales funnel is its linear nature. Consumers and prospective customers rarely enter the purchasing process simply because they have been caught the attention of an advert. Unlike traditional advertising formats, many people have become immune to them. Barkers and print media operating on a ‘scattergun’ approach have long since become obsolete. Instead, prospective customers are now engaging at other stages of the traditional AIDA model, entering the funnel (apparently) at any time or jumping back and forth between the different stages.

In both the B2B and B2C sectors, customers are faced with a vast amount of knowledge and information. They can find comprehensive information about products and companies online and seek confirmation from colleagues and friends. Prospective customers, so to speak, create their own funnel and move through it of their own accord. Whether they ultimately make a purchase is no longer guaranteed by the ‘sales funnel’.

Furthermore, the sales funnel cannot absorb any new momentum. As a result, leverage and momentum are lost. What does this mean? — Let’s say a potential customer sees an advert for a kitchen appliance in a paid Google Ad. They then search for relevant online articles to find out more. They then purchase the product from an online shop or their trusted electrical retailer. They have thus passed completely through the sales funnel and the sales process itself is complete. The downside of this approach is that the customer is what is known as a ‘one-off customer’. According to the funnel principle, you would now have to attract them from scratch to turn them into a customer again. So ‘the momentum’ is lost.

In summary, this means that the funnel has to be restarted again and again after a certain period of time. This costs not only money, but also time – and consequently, customers.

The sales funnel becomes a flywheel – a fresh take on online marketing

However, the constant design and use of various funnels does not only have disadvantages. After years of building up so-called inbound marketing via funnel systems, companies can point to a number of key advantages over outbound marketing: backlinks to websites, social media followers and evergreen content. Consequently, without necessarily intending to, a permanent stream of content has been created that can continuously attract new customers. The funnel system has thus been automated.

In theory, entire marketing departments could retire, given that new customers are constantly being generated thanks to automated processes. — But that is where the fallacy lies. At some point, it simply comes to an end. You cannot generate new customers in the long term simply by running the same funnel systems over and over again. Instead, existing customers must be encouraged to refer further customers or to remain active as buyers themselves on a regular basis.

What is needed, then, is a cycle. Like that of a flywheel.

The Reinvention of the Flywheel

In principle, the concept of the flywheel is already ‘somewhat older’ and can be traced back to the mechanical flywheel. It was invented around 200 years ago. James Watt incorporated it into his steam engine at the time. This made it possible to achieve the highest levels of efficiency, as well as to capture and store energy.

In marketing, the use of a flywheel is just as revolutionary as it was 200 years ago. It captures, stores and unleashes a greater concentration of your own energy in the form of traffic, leads, sign-ups, new customers and the enthusiasm of existing ones. The system operates on the metaphor of pressure and momentum. In this context, energy loss refers to the loss of users and customers, which simultaneously counteracts momentum and slows growth considerably.

The flywheel is kept turning by the application of force. The more adjusting screws are attached to the wheel, the more force can be applied. This is how speed is achieved. Unlike the sales funnel, the flywheel does not ‘push’ customers through a process, but integrates them into a cycle. Furthermore, the funnel cannot help companies to effectively capitalise on the growth generated by their customers.

The Flywheel system inspires customers. Customers and visitors are encouraged to act as brand ambassadors through word-of-mouth, which ultimately gives the wheel further momentum and drive. The key difference, then, is that the Flywheel focuses on the entire customer experience and the relationship with the customer.

Other decisions made by the Flywheel

The slightly modified flywheel model devised by marketing legend Brian Halligan explains how modern marketing works today:

In the first third of the cycle, potential customers are attracted in line with the inbound marketing process. This covers the ‘Attention and Interest’ stages of the AIDA formula. The aim of this initial process is to build a relationship of trust with the customer.

The following modules can be used here:

• The cornerstone of inbound marketing: the content required could be a blog, a podcast, a video channel or even a membership scheme. The content should be carefully crafted and always focus on the potential customer’s problem or need.

• SEO: Without optimising your content, you won’t attract visitors to your website or, more generally, to your business – and consequently, no potential customers either. This is another reason why high-quality content is key here, as it forms the basis on which inbound links can then be built.

• Nothing works without social media: customers need to be able to come across the product by chance. Regularly updating social media channels is essential here.

• Involving influencers! These new faces of marketing are hugely important for establishing and maintaining close contact with specific (!!!) target audiences.

• Affiliate marketing and paid adverts as reach boosters.

The Flywheel is where the proactive phase takes place, with the aim of building a lasting relationship with the potential customer. ‘Call to action’ is the magic word here. This could, for example, be a newsletter sent by email or a Facebook message. Through constant contact, the visitor gradually becomes a customer.

In the traditional sales funnel, this would be the end of the process. In the flywheel model, however, the customer is encouraged – through sustained enthusiasm and involvement in content production – to attract more (and different) customers or to remain a loyal customer themselves. In principle, the flywheel describes the basis of successful referral marketing. If existing customers are encouraged to participate in the marketing cycle on an ongoing basis, they can inform other people through the content and thus, metaphorically speaking, keep the flywheel turning ever further and ever faster, just like the old-fashioned flywheel.

Final thoughts: What does this mean for you?

You are a client of an online marketing company (ideally Golden Web Age):

A key hallmark of a good (online) marketing strategy is that it is designed for the medium to long term. This means that, whilst care is taken not to lose sight of the latest methods and trends and to update the strategy accordingly, it is important to understand that customers are attracted in a sustainable (!) way.

So ask yourself how your website, your promotional campaigns and so on can generate customers in the long term, and what needs to be done to achieve this. This will enable you to grasp every marketing strategy in its entirety right from the start.