Flywheel marketing was first introduced in 2001 by Good to Great author Jim Collins, who likened the strategy to a flywheel. For those unaware, a flywheel is a mechanical device designed to store rotational energy in an efficient way. It can be difficult to spin at first, but once momentum is built, the flywheel can perpetuate its own motion and spin by itself. Flywheel marketing has become a critical component of growth for platform business models.
Aspect
Explanation
Concept
Flywheel Marketing is a modern marketing approach that focuses on creating a momentum-driven system to attract, engage, and retain customers. It draws its inspiration from the physical concept of a flywheel, which, when spun continuously, gains energy and becomes self-sustaining. In the context of marketing, the flywheel represents the continuous cycle of attracting, engaging, and delighting customers to drive business growth. It places a strong emphasis on customer satisfaction and loyalty as key drivers of growth.
Key Principles
Flywheel marketing is guided by several key principles: – Customer-Centricity: Placing the customer at the center of all marketing efforts, with a focus on delivering exceptional value and experiences. – Continuous Momentum: Like a physical flywheel, marketing efforts should aim to build and maintain momentum over time, becoming more efficient as they spin. – Minimizing Friction: Identifying and reducing points of friction in the customer journey to create a smoother and more enjoyable experience. – Data-Driven Decision Making: Utilizing data and analytics to understand customer behavior, preferences, and pain points to make informed marketing decisions.
Components
The flywheel marketing model typically consists of three main components: – Attract: The first stage involves attracting potential customers through various marketing channels, including content marketing, social media, SEO, and paid advertising. The goal is to generate leads and create brand awareness. – Engage: Once leads are acquired, the focus shifts to engaging them effectively. This stage includes personalized email marketing, nurturing campaigns, and interactive content to move leads further down the funnel. – Delight: After converting leads into customers, the emphasis is on delivering exceptional post-purchase experiences. This includes customer support, loyalty programs, and content that adds value to the customer’s journey. Delighted customers are more likely to become promoters who refer others and contribute to organic growth.
Application
Flywheel marketing can be applied across various industries and business models: – E-commerce: Online retailers use flywheel marketing to attract shoppers, provide personalized recommendations, and retain loyal customers through seamless experiences. – SaaS Companies: Software-as-a-Service (SaaS) providers focus on continuous engagement and customer success to reduce churn and drive expansion revenue. – Service-Based Businesses: Service providers, such as consulting firms or agencies, use flywheel marketing to attract clients, engage them with valuable insights, and build long-term relationships.
Benefits
Flywheel marketing offers several benefits: – Sustainable Growth: By continuously adding momentum, businesses can achieve sustainable and self-reinforcing growth. – Cost Efficiency: As the flywheel gains speed, it becomes more efficient, reducing customer acquisition costs over time. – Customer Loyalty: Prioritizing customer satisfaction and post-purchase experiences leads to higher customer retention and advocacy.
Challenges
Challenges associated with flywheel marketing include: – Initial Momentum: Building momentum in the early stages can be challenging and may require significant upfront effort. – Data Management: Effective use of data requires robust data collection, management, and analytics capabilities. – Adaptation: Flywheel strategies need to adapt to changing customer preferences and market dynamics to remain effective.
Real-World Application
HubSpot, a leading inbound marketing and sales software company, popularized the flywheel marketing concept and uses it extensively in its own marketing strategies. – Retail companies often employ flywheel marketing to create seamless online shopping experiences and retain customers through loyalty programs.
Table of Contents
Amazon: The Mother of All Flywheels
Understanding flywheel marketing
Flywheel marketing is a model that helps explain the momentum that results when an organization unites around delivering a superior customer experience.
In the context of business, Collins noted there was “no single killer innovation, no solitary lucky break, no miracle moment; rather, the process resembles relentlessly pushing a giant, heavy flywheel, turn upon turn, building momentum until a point of breakthrough and beyond.”
Unlike the traditional marketing funnel, flywheel marketing suggests the sales process is never truly complete. The wheel will slow down to reflect a disconnect between sales and customer success and speed up to reflect improvements in customer experience and conversion rate.
When the flywheel is in motion, so to speak, clients are retained and will recommend a product or service to others via word-of-mouth marketing. Since the focus is on customer retention, flywheel marketing is relevant to any business regardless of industry, size, or type.
The four stages of flywheel marketing
Like the traditional marketing funnel, flywheel marketing comprises several stages:
1 – Activation
In the first stage of flywheel marketing, the business endeavors to attract new customers in several ways.
Typically, this encompasses a high-converting website showcasing the relevant expertise and case studies. Some businesses will also choose to entice leads with coupons, discounts, or free trials and track the results of their efforts.
2 – Adoption
Once a customer has been acquired, the business must determine how to keep them coming back. In the second stage, newly acquired customers start using the product or service and are constantly searching for more value.
Product tutorials and walkthroughs can be used to foster a sense of realization among consumers that the product they are using is precisely what they need.
3 – Adoration
The adoration stage focuses on creating users who love products and services and look forward to using them regularly. For the business, the best possible outcome is a cohort of customers who act as brand ambassadors and set the stage for brand advocacy.
Customer adoration can be facilitated by:
Sharing resources via social media or a newsletter, such as a free webinar.
Conducting surveys to determine which product features fans would love to see incorporated.
Compelling customers to upgrade to premium plans and reap the hidden benefits.
4 – Advocacy
During the advocacy stage, happy and satisfied customers become brand advocates via user testimonials, reviews, referrals, and user-generated content. Each is a potential source of new leads, with brand advocates essentially acting as a marketing team for the business itself.
While many brand advocates will need no motivation to speak well of a product or service, affiliate programs and other rewards can help incentivize some users to help keep the flywheel spinning.
Examples
E-commerce Business: An online retailer focuses on delivering an exceptional shopping experience. They offer personalized product recommendations, easy returns, and loyalty rewards to keep customers engaged. Satisfied customers share their positive experiences through reviews and referrals, attracting more shoppers.
Software as a Service (SaaS) Company: A SaaS company invests in creating comprehensive onboarding materials and tutorials for new users. They continuously improve the user interface and add features based on customer feedback. Happy customers become advocates, referring the software to other businesses.
Fitness App: A fitness app offers a free trial with personalized workout plans and nutrition guides. Users who complete the trial successfully are encouraged to subscribe to a premium plan for advanced features. Satisfied subscribers share their progress on social media, attracting more users to try the app.
Hotel Chain: A hotel chain focuses on providing top-notch guest experiences, including concierge services, room customization, and loyalty programs. Delighted guests leave positive reviews and refer friends and family, leading to more bookings.
Consulting Firm: A consulting firm offers free webinars and resources on industry-specific challenges. Attendees of these webinars are invited to schedule one-on-one consultations. Clients who benefit from the consultations become advocates and provide testimonials for the firm’s website and marketing materials.
Subscription Box Service: A subscription box service curates monthly boxes based on individual preferences and feedback. Subscribers who share unboxing experiences on social media and refer friends receive discounts on their subscriptions, incentivizing advocacy.
Automotive Manufacturer: An automobile manufacturer prioritizes customer satisfaction by offering regular maintenance, excellent customer support, and loyalty programs. Happy car owners become brand advocates, sharing their positive experiences and influencing others’ car purchase decisions.
Restaurant Chain: A restaurant chain consistently delivers high-quality meals, excellent service, and a loyalty program. Satisfied diners leave positive reviews and refer friends and family, driving more foot traffic to the restaurant locations.
Online Learning Platform: An online learning platform provides free introductory courses and encourages learners to upgrade to premium plans. Students who excel and achieve certifications become advocates by showcasing their accomplishments on professional networks and recommending the platform to peers.
Digital Marketing Agency: A digital marketing agency offers educational resources, such as blogs, webinars, and whitepapers, to help businesses improve their online presence. Clients who experience significant growth in their online visibility become advocates, providing testimonials and referrals.
Types of Flywheels
The Flywheel Marketing Model is a concept that emphasizes the continuous momentum and growth generated by delighting customers. It envisions marketing as a self-reinforcing cycle that starts with attracting, engaging, and delighting customers, which in turn fuels business growth. Here are examples of strategies and implications within the Flywheel Marketing Model:
Flywheel Marketing Strategy
Description
Implications
Example
Customer-Centric Approach
Prioritizing customer needs and satisfaction in every aspect of your business, from product development to customer support, to create loyal and enthusiastic customers.
– Encourages repeat business and referrals through delighted customers. – Builds a positive brand reputation and trust. – Reduces churn and increases customer lifetime value.
Example: An e-commerce company offers hassle-free returns, outstanding customer support, and personalized recommendations to create a customer-centric experience.
Personalization
Using data and customer insights to tailor marketing messages, content, and product recommendations to individual preferences and behaviors.
– Increases customer engagement and conversion rates. – Enhances the customer experience and satisfaction. – Boosts cross-selling and upselling opportunities.
Example: An online streaming service uses viewer data to recommend personalized playlists and content based on a user’s music taste and watching history.
Customer Feedback Loop
Establishing mechanisms for collecting, analyzing, and acting upon customer feedback and suggestions to continuously improve products and services.
– Drives product and service enhancements aligned with customer needs. – Demonstrates responsiveness and commitment to customer satisfaction. – Fosters a sense of ownership and loyalty among customers.
Example: A software company regularly gathers user feedback and implements feature updates and improvements based on customer input, leading to a more robust and user-friendly product.
Referral Marketing
Encouraging satisfied customers to refer friends, family, or colleagues to your business through referral programs, incentives, or rewards.
– Expands the customer base through word-of-mouth referrals. – Reduces customer acquisition costs. – Leverages the trust and credibility of existing customers.
Example: A ride-sharing platform offers referral credits to users who refer new riders or drivers to the service, incentivizing them to spread the word about the platform.
Continuous Learning
Cultivating a culture of continuous learning and improvement within your organization to adapt to evolving customer preferences and market dynamics.
– Enables agility and adaptability in responding to changing customer needs. – Drives innovation and keeps the business ahead of competitors. – Positions the business as a leader in its industry.
Example: A fashion retailer conducts regular market research, trend analysis, and competitor benchmarking to stay updated on the latest fashion trends and customer preferences.
Key takeaways:
Flywheel marketing is a cyclical and self-sustaining marketing model that generates a steady stream of qualified leads
The flywheel marketing sales process is never truly complete. The wheel slows down to reflect a disconnect between sales and customer success and speeds up as a result of improvements in customer experience and conversion rate.
Flywheel marketing consists of four stages: activation, adoption, adoration, and advocacy. Each stage helps the business attract qualified leads and turn them into brand advocates that will promote its products and services.
Key Highlights:
Introduction to Flywheel Marketing: Flywheel marketing, introduced by Jim Collins, is a model that compares business growth to a flywheel’s momentum. It emphasizes delivering an excellent customer experience and has become essential for platform business models.
Momentum in Customer Experience: Flywheel marketing focuses on building momentum by consistently delivering superior customer experiences. It contrasts with the traditional marketing funnel and emphasizes that the sales process is ongoing.
Relevance to All Businesses: Flywheel marketing’s emphasis on customer retention and word-of-mouth marketing makes it applicable to businesses of all sizes and industries.
Four Stages of Flywheel Marketing:
Activation: Attracting new customers through high-converting websites and various incentives like discounts or free trials.
Adoption: Ensuring customers find ongoing value in the product or service, often through tutorials and personalized experiences.
Adoration: Creating loyal customers who become brand advocates through resources, surveys, and premium plan upgrades.
Advocacy: Satisfied customers actively promote the brand through testimonials, reviews, referrals, and user-generated content.
Self-Sustaining Model: Flywheel marketing is cyclical and self-sustaining, generating a consistent flow of qualified leads as customers progress through the stages and become advocates.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
interaction with a brand until they become a paid customer and beyond.
Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
