Announcement, ladies and gentlemen, the traditional marketing funnel is dead.
What you might not know is that the “death” of the marketing funnel is good news for marketers, at least for those of us who can adapt to a new way of looking at the funnel.
Put a smile on your face now, all the stages of the funnel are still there, but they don’t look like they used to. Marketers still have to attract leads, generate interest and engagement, and prompt decisions and action, but not necessarily in that order, and not using the same tactics.
The good news is Leads now inform themselves through reviews and content, and after they’ve become customers, they go on to advocate and act as brand evangelists. Now, the marketer’s job, at every stage, is to delight those potential customers.
So, what happened to the old funnel?
Some have called it “broken,” others have said it’s been turned on its side or flipped, and others have even compared the new model to a pinball machine.
The sad and hard truth is that the funnel is dead, and the inbound methodology has completely shifted to the flywheel framework.
HubSpot recently announced a big shift in the way we think about inbound strategy at Inbound 2018. This obviously ruffled some feathers in the marketing world. We are all accustomed to thinking with a funnel mindset, aren’t we?
However, the flywheel buried the funnel. Also, it did so because it’s inherently better in many ways.
In today’s exceptionally buyer-centric environment, if you haven’t started considering the flywheel, you need to. Apparently, the funnel prioritised marketing and sales over customer service, as it favoured closing the next deal over your existing customers. However, when buyers wield the power, and your Customer Acquisition Cost (CAC) is skyrocketing, your existing customer relationships shouldn’t take this backseat. If you want to grow effectively, you need to “ditch” the funnel and introduce the marketing flywheel as a new way to think about your customer base.
Reasons why the Flywheel Rule over the Funnel
It is Self-Perpetuating
A funnel is top heavy and bottom thin. Whereas we like it round, right? This requires businesses to invest all their energy and force into attracting and acquiring customers. However, this is short-sighted. It’s too linear.
The flywheel, on the other hand, fuels itself and is designed to leverage momentum. In terms of operating your business, you’re not just bringing in customers and completing your contract. You’re fully investing in setting them up for continuous growth. The flywheel brings you into the customer-centric world.
It Requires Alignment
With the funnel, many organisations understood the value of aligning all of their teams, but they treated it like a nice-to-have, it can be done without. But with the flywheel, your success and momentum depend on full alignment.
Silos be damned. In a flywheel world, your marketing, sales, and service teams must be constantly talking, ensuring that you deliver a top-notch experience at every customer touch point.
It is Relationship-Focused
This is arguably the most important distinction between the funnel and flywheel. Your focus isn’t just on closing deals; your focus is on building and maintaining positive relationships. This is what spins your wheel and keeps it spinning. The client-business relationship has always been interdependent, and the flywheel shows as your customers grow, your wheel spins faster, fuelling your growth.
You can accelerate customer growth and your growth in any of the three flywheel stages:
You’re earning attention and attracting visitors by delivering high-value content and simplifying your audience’s ability to learn more about your organisation.
As you interact with prospects, you’re building relationships, enabling them to engage with you how they want and when they want.
Continually delivering a positive customer experience accomplishes two important things: you further establish yourself as a credible, reliable resource, and you turn your customers into advocates for you.
So why this sudden change? Why did HubSpot decide to put the funnel to rest?
As they did in 2006, when HubSpot was founded and introduced the world to inbound, they’re staying ahead of the curve and introducing changes that evolve with the world of business. When they first started over 10 years ago, they introduced the inbound methodology to better serve the digital world. They noticed that customers were starting to take more control in the buying process.
Thanks to the internet, consumers were equipped with information and tools they need to research products and services to make informed buying decisions. Plus, they were getting better at avoiding and ignoring interruptive, outbound marketing tactics.
Now, they see the shift toward what they call the “hard truth” about marketing. They see that the push for content marketing increased the sheer amount of content in the world, so naturally, consumers got better at filtering out content, just as they learned to filter out disruptive advertising and outbound tactics in 2006.
In 2018 and onward, people put a lot more value on recommendations from their friends and families than on what you say about your organisation. HubSpot’s research found that people are:
Less patient – 90% of consumers expect an immediate response from representatives.
More sceptical – Just 3% of people say marketers and salespeople are trustworthy.
Hence, the reliance on word of mouth continues to gain steam. In fact, as HubSpot’s research found, word of mouth referrals and customer references are the top sources of information people rely on when making purchase decisions for business software. Say it is a lie if your friends never invited you to join Instagram.
The flywheel framework isn’t just some trendy update on business jargon. It’s a necessity.
While HubSpot is yet again ahead of the curve, most of the market is taking forever to catch up. Many companies are just now getting started with inbound marketing.
There is a slow adoption of inbound marketing, from the early days up to now. For instance, HubSpot’s 2009 State of Inbound Marketing report found that just 37% of business’ lead-generation budget was dedicated to inbound marketing, whereas 30% was dedicated to outbound marketing efforts.
Inbound delivered leads that cost way less, as compared to outbound. The same report found that those who spent 50% or more of their lead generation budget on inbound marketing averaged $84 per lead, and businesses spending 50% or more on outbound marketing averaged $220 per lead.
So, despite the success and value, inbound marketing was delivering then, companies continued dragging their feet to adopt it. By the time their 2010 State of Inbound report came out, a staggering 88% of respondents were either maintaining or increasing their inbound marketing budgets.
Fast forward to now, and inbound is still not fully embraced. HubSpot’s 2018 State of Inbound report found that 74% of global organisations primarily use inbound marketing. This is impressive, but what about the remaining 26% of companies not using inbound?
So those who are using an inbound marketing strategy are still taking too long to adopt an inbound sales approach.
That’s right, in a world where sales and marketing alignment is a must, most organisations are still working in silos. The same 2018 HubSpot report found that just 26% of respondents use a formal service level agreement (SLA) for their sales and marketing teams. Of those using an SLA, 85% say their marketing strategy is effective.
In truth, most of the market will take years to catch on. By the time they do, their competitors who are using the flywheel framework will already leave them in the dust. So, what are you waiting for if you don’t want to be beaten and dusted?