How to dramatically lower your customer acquisition costs? Move from funnels to flywheels

Want to dig in deep? 

Enjoy this brief history of customer-centric marketing models.

Want the bottom line? 

Scroll down to the 5 key takeaways and examples of how successful SaaS startups create effective experiences throughout their customer journey.

The first time that a business owner referred to the “voice of the customer” was in 1909. Harry Gordon Selfridge, trained his staff to acknowledge that “The customer is always right”. With this approach and a fine collection of classy items the owner of the high-end Selfridges department store in London built a retail empire.


Selfridges may have personally known that customers may not always be right. In fact, they can often be wrong and ever-so-often – obnoxious. However, he understood the fundamental truth: his customers are the driving force of his business – they are the true rainmakers.


Today, it’s a given. The customer centric approach is constantly developing with new buzz words alongside new data driven tools. The latest, is in HubSpot’s recent launch of its Service Hub and the use of the Flywheel to describe our customers as the driving force of our business. This isn’t just a ‘customer equals revenue’ approach but rather proving the exponential marketing force of a satisfied customer. Especially one who onboards new customers thanks to their word of mouth. Customers are the force that keeps the Flywheel turning.


So, is the Flywheel an important add-on to our marketing jargon or another buzz? With my passion to word of mouth marketing, strategies and history I hopped on a quick marketer’s journey to understand the Flywheel’s true contribution.


Why funnels are just not enough.

One of the most used structures are the sales and marketing funnels. This structure reflects a flow we need to “push” our customer through. There is a nearly complete and unnatural separation between the sales and marketing funnels as they are often viewed side by side or one on top of the other. However, in reality marketing tends to nurture sales throughout the process. Therefore, the natural progression is a more intertwined relationship between the two.


The marketing funnels reflect the customers’ expressed state of mind: Awareness, interest, intent, consideration and purchase. This funnel reflects whether our customer moved to the next buying stage and the percentage of those who did. As marketers, our job is to move prospects to the next stage of the funnel. Once we discover what would make a visitor become aware, interested and so on, and why our customer would move to the next stage we hit the jackpot and grow.


Do you know the experience funnel?

An alternative way to add a more customer centric approach to the funnels is through the experience funnel. This funnel enables us to discuss the experience the related feelings that each stage requires to move our customer on to the next stage. Since experiences are what sticks and change our state of mind – once we uncover the experiences that moves the needle in each phase and apply the right marketing activity or content that generate the experience – we are on the fast track to success and scale.


For example, many Saas companies share easily digestible informative insights or industry trends to educate the market regarding an alternative solution – their solution. But why do informative insights and trends create awareness? (Top of the funnel)


Take for example the ultra-successful marketing of SaaS company, Datorama. They share a simple insight like 62% of brands will take their programmatic trading in-house by 2022 and this insight creates an experience that leads to awareness. What experience is that?? The experience of feeling smart and insightful. And that feeling, can be relived over and over – and generate a deeper connection to the brand that generated it.


Picture this: An analyst preparing coffee at the office kitchen and shares this: “But you know that by 2022 62% of brands will take their programmatic trading in-house so why don’t we start now?” How smart does this person appear to be? Imagine this analyst repeating his insights at a big strategic meeting. How much attention could they draw from just one insight? How much would this person appreciate the source that helped him shine? Would they go back for more?


And then came the buyer’s journey.

Once the marketing world embraced intelligent measuring tools the buyer’s journey was added to its jargon relatively fast. Buyer journeys are more detailed than the legacy funnels and reflect every measurable touch point a business’s audience needs to travel on the way to turning into a customer. The uniqueness of the journey is in the ability to dive into, test and optimize the path a prospect takes to becoming a customer as well as the acceptance that a purchase and a relationship is a journey.


Buyer journeys put our focus on observing and treating the customer throughout the stages in which we obtain their attention and acquire their trust. They also test and measure experiences at every touch point that will move our customers to act.


How do we use customer journeys as a means of attracting new customers? Thanks to big data that can be sliced and diced we see a ripple effect emerge in some cases from the last touch points of the customer acquisition. Psychologists refer to this as cognitive dissonance where the buyer justifies his decisions through positive conversations about his action. We refer to it as word of mouth.


The journey rounds up into a Flywheel

The flywheel puts even more energy, focus and actions on customers as the main force that attracts more buyers at all stages of the buyer’s journey.  The reference itself of a wheel vs a linear journey – says it all.


The immersion that is created by satisfied customers and their words is the businesses most valuable driving force. Why? Because un knowingly they take a large part of a businesses’ customer acquisition process on themselves. The great outcome is not just in lower attention towards customer acquisition but also in (much) lower costs – The flywheels’ energy makes it happen. Btw, before the flywheel buzz we called it earned media.


So, if the customer is yet again the center and key driving force of our business what exactly has changed?


  1. In a world where low touch sales are gaining more and more momentum, every engagement that is lost between the seller and the customer can be gained by engagements of customers and their peers. So, let the flywheel turn.
  2. All of the business’s divisions focus on the customer. From the core of the products, to sales and success. Nearly every team needs to bear in mind the experience they create. Every experience counts, and every experience can make your marketing efforts cost less.
  3. We align our business values with our customers values – for real – to create an experience that makes them feel welcomed, understood and taken care of.
  4. A systematic customer success approach and team are one of the most important drivers of a business – its practicing and not just preaching about the importance to keep a customer happy. And, also serves the flywheel. How do we know it’s true?

Growing companies like Totango, Optimove offer tool to practice this approach. And, the great Hubspot has recently launched its Service Hub.

  1. The most successful and confident businesses are here to delight – but not necessarily please. They focus on building a business that is true to their vision and mission. They offer the best possible product and customer journey to prove their actions speak louder than their words. Once they master their journey it closes into the flywheel. Not because we are here to please our customer but rather because we are here to do our best. And that, will affect our most relevant audience. And that audience, will talk to their most relevant peers. Boom.

A great example of the Flywheel at work is the experience Lusha creates for its customers. Once a user adds their chrome extension and starts using the platform their dashboards show that within hours to days more and more users from the same company join the party. Lusha is totally focused on delighting their customers rather than pleasing them. Their value is spot on though their packages are structured, simple and very suitable to most of their target audience. Therefore, they rarely agree to customize offers unless it’s proven to make sense and can be scaled.

Bottom line


So, what does it take to move to a more customer-centric marketing model? As usual – Intention, a plan and focus. Delighting not pleasing. And an understanding that the world is round, the wheels keep turning and so does the Flywheel.

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