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Is the marketing funnel really dead?

Updated: Sep 8, 2023

"The Funnel is. Dead. Long Live the Flywheel."
Brian Halligan, HubSpot CEO At B2B Marketing Lab’s Grow with Inbound, 2019

Did you catch Seth Godin at AdWorld talking about the marketing funnel last week?

We loved his take on seeing it as a megaphone instead - a megaphone you give to your customers/users so they can shout about your product/service. A genuine customer talking about their positive experience will always have a greater reach than a campaign constructed without customer insight.

So – what exactly is a marketing funnel?

A marketing funnel is the journey, or as our CEO Lou says, 'adventure', taken by your ideal customer or user, who goes from not knowing anything about your product or service to making a transaction or completing a call to action. Imagine a funnel shape, with a wide mouth to catch as many people as possible before sorting them through progressive stages of marketing. Only the people who really, really want what you are offering – potential repeat customers/users – end up at the bottom of the funnel. Funnels can be applicable across different areas of your organization. Sales teams often use a funnel shape, too. But why are they important?

Retention is key

Visual representation of a marketing funnel

Funnels are all about generating sustainable growth. To achieve sustainable growth, organizations need newly acquired customers/users to become repeat purchasers/users.

Today’s marketing funnel is an infinite loop with the aim of repeatable sales/actions, reflecting the newfound importance of retention for growth. The modern marketing funnel shows it’s important to take a holistic approach into account for the entire customer lifecycle. It's ultimately about improving your return on investment (ROI) – and retention is cheaper than acquisition.

It is 5-25x more expensive to acquire a new customer compared to retaining an existing one. So, for example, if your organization is a library – you're much better off retaining an existing patron than acquiring a new one. The expense isn't just about the cost. It could be the marketing costs involved in launching a campaign, it could be a resource cost of having people to run campaigns to bring in new patrons. What if you're a publisher looking to reach out to past authors and encourage them to publish again with you?
5% increase in customer retention can increase an organization's revenue by 25-95%
Retained customers buy and spend more than new customers – they really learn the value of the product or service. For example, people who use Apple products tend to really value them and the way they complement each other - they have really honed in on brand loyalty with an excellent tone of voice
Happy and loyal users/customers are more likely to refer friends and family - word of mouth is free

[Statistics source: Hubspot]

Enter the flywheel

Marketing funnels may not work in isolation because they only look at the part of the customer or user journey, not the continued journey (adventure!) you want to achieve. They are part of the bigger picture. The success of your organization in 2021 is now reliant on your ability to grow your marketing flywheel which encompasses the marketing funnel.

What is the flywheel?

The flywheel focuses on intentionally bringing your consumers/users on a journey to becoming your biggest fan, who will then refer and grow your business.

Yes, sales funnels can be part of this too, but that’s just to acquire a lead or purchase. Consumers or users purchasing, or completing an action, repurchasing or re-actioning, sharing your content, leaving testimonials, and referring your organization... this is the result of the flywheel.

The flywheel

“Unlike the funnel, the flywheel is remarkable at storing and releasing energy — and it turns out that’s pretty important when thinking about your business strategy. Invented by James Watt, the flywheel is simply a wheel that’s incredibly energy-efficient. The amount of energy it stores depends on how fast it spins, the amount of friction it encounters, and its size. Think of it like the wheels on a train or a car.”

[Source: Hubspot, 2021]

The flywheel is an evolution of the funnel, a necessary response to a rapidly changing process that is no longer as influenced by content marketing as it once was. It provides marketers, sales people and organization leaders alike the opportunity to shift focus and nurture their customers or users rather than forgetting them.

What's the most significant threat to your organization's growth? It's not your competition. It's bad customer care. It's poor experiences. Retaining existing customers/users is more cost-effective than finding and acquiring new ones. We're well aware of the quote that it's "5-25 times MORE expensive to acquire new customers/users than retain existing ones". At least the flywheel gives you a visual mapping and framework to put your customers and users at the core of what you do - across all departments. It's a great place to start building sustainable growth for your organization. 100% of our revenue in the last year has been from retention and word of mouth.
Lou Peck, CEO, The International Bunch, May 2021

How does a flywheel work in marketing?

The flywheel works on a basic principle, the more momentum you apply to it, the better results you’ll see. Three factors dictate how much momentum your flywheel contains:

  1. How fast you spin it

  2. How much friction it has

  3. How big the size of the flywheel is

The speed of the spin refers to the intensity of efforts and productivity of your transactions, service, and marketing departments, this includes any content that is relevant to the customer or user.

Friction means the difficulty your customer or user has to face to complete the call to action or use your product/service. The lesser the friction (such as poor customer service) the happier your customer and the smoother and faster it will run.

The size of the flywheel is all about the pool of users or customers you have.

As force and weight increase and friction decreases, the flywheel spins faster - much like how the wheels on a car work - and your organization grows, with the customer or user at the centre of it all.

With the flywheel, you use the momentum of your happy customers or users to drive referrals and repetitive behaviour, or completions of your calls to action.

Attract, engage, delight

Essentially, there are three parts to the flywheel model: ATTRACT, ENGAGE, DELIGHT.

As an inbound marketing methodology that puts customers or users first, the flywheel model seeks to attract, engage, and delight at every stage of their journey (or adventure!)

This means all teams are invested in the user experience, not just your marketing and sales force.

The result is a seamless and ultimately more positive experience for users and anyone else who interacts with your organization.

Here’s how this might look when it comes to assets:

  • Attract: Typical top-of-funnel content such as referrals, paid ads, videos, testimonials, broad educational content (Marketing Qualified Lead (MQL))

  • Engage: Interactive content, ‘how-to’s, email marketing, chatbots

  • Delight: Ongoing customer support, follow-ups, incentives to transact again or refer family or friends (Sales Qualified Lead (SQL))

Sound overwhelming? It doesn’t have to be. Any marketing team that knows its stuff will have strategies for all three, and be able to identify which stages of the customer/user journey meet the basic criteria to define your MQLs and SQLs to measure and report on what you’re doing.

Your organization will grow at a faster pace if you’re able to engage with and delight your existing customers/users. Earning their favour over and over again results in repetitive behaviour and positive recommendations – online and word of mouth – to colleagues and friends.

Which is better?

For us, it's all about the right combination. Marketing funnels don't work on their own because they are part of the bigger picture. By contrast, flywheels intentionally focus on turning your consumers into your biggest fans, facilitating your growth.

It all depends on the structure of your organization. It's incredibly important that your teams align with the customer at the core. So, rather than a funnel, we have found that flywheel can be a more accurate representation of what every organization needs to do to grow: reduce the friction between sales, marketing/communications, and the customer service team like the library team for a seamless consumer experience that helps accelerate growth while amplifying the results your products/services are generating!

You may be wondering, can you still use a marketing funnel? Of course! The funnel model is alive and well in 2021, and can still serve great purposes for a variety of industries, products and services. The flywheel is simply just a better and wider representation of how today’s businesses can grow.

HubSpot's VP of Marketing Jon Dick explains:

"We recognize that funnels aren’t going away. While the flywheel is a better metaphor for how today’s organizations grow, you will still have funnel-shaped charts and graphs representing the effectiveness of different processes within your company. You may use a funnel chart to improve a particular aspect of your business performance. Just remember, even though a process can easily be visualized as a funnel, it’s actually one piece of a larger flywheel.”

[Source: Hubspot, 2021]

During our webinar, 50% of attendees decided that the marketing funnel was “still holding on – just” and the other 50% decided that it was “still alive and kicking” – but what do you think?

Check out our other resources to inspire your work. Need support? Get in touch.


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