The Keys to Developing the Perfect Flywheel
for B2B SaaS
If you’re researching how to market your software business, you’ve probably heard of a flywheel. Still, you might be wondering what a flywheel is and how you can use it to grow your business. Here, we’ll break down what a marketing flywheel is, how you can develop one for your business, and how it compares to the traditional marketing funnel.
What is a Flywheel?
A marketing flywheel is an alternative to the marketing funnel. Whereas the funnel sees customers as the end result or afterthought of a process, the flywheel centers them as a key component of an ongoing cycle. Though the exact steps of a flywheel vary depending on a company’s strategy, most start when the customer first notices the product, then proceed to engage with the customer at every part of their journey.
Most importantly, however, the flywheel acknowledges customers as the main driver of growth. Flywheel models seek to please and delight the customer at every turn so they become avid brand advocates. It also emphasizes the customer's ability to build momentum and encourages it to continue past their purchase.
Flywheels vs. Funnels
While funnels think of customers as an afterthought—a process’ end result—the flywheel shifts focus towards the customers at every stage of the process. The flywheel model also thinks about customers in terms of longevity and loyalty, whereas the funnel tends to pigeonhole them into one-time purchasers.
A flywheel wants to turn customers into evangelists—people who will advocate for your brand because they love it so much. This newer model conceives of customers as propellers for growth, active agents whose thoughts and feelings should be at the forefront of every decision. It encourages you to ask, “What’s most convenient for the customer?”
Additionally, while the funnel considers each stage of the process disconnected from the others, the flywheel conceives of them as feeding into each other. Whereas the funnel regards each department—marketing, sales, customer success—as its own step, the flywheel acknowledges the collaboration between the departments. While marketers will still be more involved with attracting and the sales force more involved with engaging, the flywheel focuses on the customer experience across cohesive and aligned departments.
However, the most important difference between the flywheel and the funnel is that the flywheel takes into account the modern consumer’s customer experience. The funnel is built on traditional marketing strategies, which work less and less often. No one really sees an ad on TV or drives past a billboard and thinks “I need what they’re selling.” Instead, the modern consumer realizes they need something specific, then they go looking for it. They’ll ask their friends and social media followers for recommendations, they’ll look up customer reviews, they’ll find the product themselves. In fact, the Harvard Business Review found that 57% of business-to-business purchases are decided on before they even reach out to the seller.
Since the funnel acknowledges the customer as a driving force in sales, it’s able to focus on inbound marketing and better accommodate the modern consumer’s immunity to traditional marketing techniques. By focusing on creating the most fulfilling customer experience you can, you reduce the number of reasons for not recommending your product.
How the Flywheel Works
Momentum & Preventing Slow-Downs
The flywheel’s driving force is called “momentum” or “energy,” like in physics. Also similar to their scientific counterparts, the amount of momentum a flywheel contains is based on the force you exert on it, how much friction there is, and how large it is.
We’re using “force” to mean any strategies you implement to speed up the flywheel. These can include customer referral programs, advertising, customer experience strategies, and anything else which contributes to the spokes of your flywheel.
“Friction” refers to any factors that could make things more difficult. Communication failings between your sales team and your marketing team is one example of friction. Another could be a poor workflow. Friction is anything that comes between you and your plan’s execution.
To reduce friction, you should evaluate these problems and take strides to solve them. For example, are the handoffs between marketing and sales too slow or vague? Are your teams speaking to customers with different messaging? Are there too many barriers to adequate communication, or is the structure lacking?
The size of your flywheel literally refers to its scope—how much the strategy covers, how many people it involves, etc. Naturally, larger flywheels may take longer to develop and implement than smaller ones.
You’ll want to consider these factors when deciding how fast you need your flywheel to move. If you work in a fast-paced market, you might need to prioritize speed more than someone in a slower market.
The Phases
Once you’ve taken your momentum into account, you’ll want to think about your phases. The Flywheel Hubspot popularized has three parts: Attract, Engage, and Delight. Though Appcues prefers a different model: Evaluators, Beginners, Regulars, and Champions. Though these seem pretty different, they both cover three broad strokes: garnering attention, engaging prospects, and fostering the customer relationship. Whatever phases your flywheel utilizes, you’ll need to complete those three steps. Remember the main goal of the flywheel is to create long-term, repeat customers. At each stage, you need to prioritize the customer experience, but that goal looks different at each stage.
When you’re attracting the customer’s attention, you want to be unobtrusive and focus on eliminating barriers. You can do this with useful and/or entertaining content that addresses their most pressing concerns or questions. You can do this through well-written blog posts, well-crafted social media content, well-strategized search engine optimization, and delighting current customers into leaving positive reviews.
These features can also bleed into your engagement phase, though here you want to focus more on building customer relationships. In this segment, you’ll want to make it as easy as possible for customers to find and purchase what they need. You can achieve this by implementing a variety of strategies from email personalization to database automation—many of which you can streamline further utilizing marketing and sales automation.
Then you’ll move on to fostering that relationship further after the purchase. First and foremost, the service team should make sure the customer experience is smooth and stress-free. There are numerous strategies you can use to your advantage here. Self-service is becoming an increasingly popular option available through chatbots and articles about how to troubleshoot your product. It’s also highly recommended that you provide customer service through multiple channels so customers can utilize whatever they feel most comfortable with.
Developing a Flywheel
Now let’s get into creating a flywheel strategy that works for your software business.
Step 1: Set Your Stages
As mentioned previously, there are numerous different versions of the flywheel. You can adopt Hubspot’s or Appcues’, or you can use them as starting points for your own. If you make your own, remember you’ll need to have at least one stage for attracting interest, one for engaging with that interest, and one for fostering a customer relationship.
When creating your stages, take into account what your ideal customer journey looks like, and what that customer would realistically think and need at each phase of that journey. This should help you determine what you need to focus on and accomplish at each phase.
If you’re using a pre-existing flywheel, you should familiarize yourself with each stage and develop specific strategies or qualifications for them.
Step 2: Determine Metrics
For each flywheel stage, you’ll need to determine which metrics you’ll need to measure. This will help you determine what goals to hit and when you’re hitting them. Remember to focus on what you need to accomplish for each stage. For instance, if you’re using Appcues’ flywheel, you should spend the Activate stage focusing on new trial sign-ups, initial sales, and/or product-qualified leads.
You may decide to include more metrics if there’s something specific you’re looking for—such as how your leads found your product. In this example, you may also keep track of who found your product from Google searches, YouTube videos, or social media.
Step 3: Minimize Friction
No system is perfect, but you can take strides to eliminate almost all of your friction. Friction may take a different form at each point of the flywheel, but there’s almost always a path to helping things move smoothly.
Some friction is easy to avoid with basic marketing and technical know-how. For example:
- You want consistent copy across all platforms. Inconsistent copy causes customer confusion.
- You’ll need a secure and credible website. A lack of either makes many would-be buyers reluctant to purchase.
- A quick-and-easy customer experience. A slow, bureaucratic experience will lead to frustration and bad reviews.
- Easy payments and upgrades. It’s not unheard of for people to opt-out of a purchase last minute because the seller doesn’t support their preferred payment method.
Step 4: Test and Experiment With Your Strategy
While we put testing and experimenting at Step Four, it should really be an ongoing process throughout your company’s existence. You need to constantly test your stages and modify your strategy if something isn’t working. This testing will also give you endless opportunities to optimize your flywheel for maximum effectiveness.
Step 5: Track and Evaluate Your Results
Again, this should be a continuous part of your business operations. If your results aren’t where they should be, then you should ask yourself why and work on removing problems or changing strategies. If they’re exceeding your expectations, you should figure out what’s working so well and see if you can extrapolate that to other aspects of your flywheel. At the very least, you should make sure you don’t change it unless you’re sure the change will be even better.
You’ll also want to pay attention to online chatter about your product. If there are any common complaints about your product, you should prioritize fixing those.
With software, in particular, it’s important to be open and honest about any problems. Notify your users that you’re aware of the problem and working to fix it. Don’t try to sweep issues under the rug or wave them off; that will create the impression you’re ignoring your user base.
If everything’s going smoothly, you should see a continuous momentum buildup. Most of your customers should become repeat customers, and be ready to endorse and recommend your brand to their friends. The online discussions surrounding your product should be overwhelmingly positive.
Key Takeaways
Many companies believe flywheels are the future, and perhaps you agree with them. In implementing a flywheel, you can stop treating customers like an end result or afterthought, and start crediting them as the momentum-builders they are. Moreover, many companies find the flywheel model more fulfilling than the traditional funnel. By centralizing the customer experience, Saas companies that genuinely care for their customers and make them central to their operations and processes are able to provide them with the high-quality experience they deserve.
Utilizing a well-executed flywheel, you not only earn improved customer rapport but a near-guarantee at continuous growth and success. Through working on turning customers into repeat purchasers and loyal brand advocates, you’re creating sustainable increases in revenue and business traffic.
It’s important to remember the key aspect of the flywheel, however: delighting customers. At the end of the day, the flywheel works because customers want to continue supporting the phenomenal company they had such a good experience with. It becomes your competitive advantage in an era where SaaS products are easily replicated by competitors.
At Revvy, we consult businesses on their RevOps strategies. From transitioning to RevOps to improving performance, we're always happy to help with any questions or strategies you'd like to discuss.
