Sharing experience, insights and best practices for building SaaS businesses. Clients rely on us to realize the future visions of their organizations. Posts here are based on real-world outcomes and lessons learned from putting marketing to work – marketing that grows software companies like yours.  Let’s build something bigger, together.

Filter by Category

HubSpot Killed the Marketing Funnel: What's the Deal with the Flywheel?

It seems like leadership at entrepreneur-scale companies only recently accepted the idea of an inbound marketing funnel. According to this model, to properly engage and sell customers, they must be attracted to the website, nurtured and converted to sales leads, closed as customers by the sales team and made evangelists (or “delighted”) via customer success, all in as seamless and fluid a process as possible.


Just as inbound marketing has become mainstream, HubSpot is throwing out the inbound marketing funnel and introducing a whole new paradigm of the flywheel.

Is the flywheel just a repackaged funnel HubSpot is using as marketing hype for its new Growth Stack? Or is this concept a new way to look at how customers are found, sold and serviced that can help businesses align these individual disciplines? 

Based on my experience, this new approach makes a lot of sense, especially for contemporary SaaS, professional services and financial services companies that have struggled to align marketing, sales and customer service.

Problems With the Marketing Funnel

The main problem with the marketing funnel is one that nearly every organization experiences. Marketing operates in something of a vacuum with respect to the actual imperatives of sales and customer success organizations. And this same issue exists within sales and success..

This problem may seem abstract at first, but let me see if you recognize this symptom. In many sales organizations the salespeople aren’t using the current CRM because it’s just too labor intensive. A CRM enables management to gain a clear view of the sales pipeline but most legacy CRM systems don’t offer real value to the sales reps. That means they’re spending up to a third of their time doing data entry and getting nothing out of it. Or they just don’t enter the data at all. (And who wants to kill the geese that lay the golden eggs?)

Meanwhile, the marketing department has built a beautiful marketing funnel that offers prospects great value and generates valuable information the sales team could leverage, in addition to leads that “go over the transom,” but they haven’t made sharing this information part of the process nor does the infrastructure exist to enable it.

When companies are running CRM, marketing automation and customer success software that aren’t fully integrated, they end up losing customers at each stage of the funnel, wheel or whatever else you’d like to call it. 

In fact, of companies with misaligned sales and marketing departments, only 37% met revenue goals. The alternative is creating an aligned organization. Of these companies, 56% met their revenue goals and 19% beat them.

Introducing The Flywheel

The flywheel is a new way of thinking of the customer experience that prioritizes an integrated, perpetual approach to marketing, sales and customer success. While the marketing funnel is a linear design that requires you to add in new leads and constantly lose prospects as you reach the bottom, the flywheel is a circular concept that constantly builds on the momentum of your existing customers and past success. For entrepreneur-scale companies looking to generate rapid growth, it is a much better approach.Hubspot-Flywheel

One of the most important additions to the flywheel is the emphasis on customer success. According to a Walker study, by the year 2020 customer experience will overtake price and product as the key brand differentiator.

In our experience, the flywheel is a great way for customers to understand how each department’s success or failure can lead to the success or failure of the entire company.

For example, a company recently reached out to us because its churn rates were approaching 50%. After performing a customer experience discovery project, we were able to get a 360 degree view of how the customer engages with the company at every touchpoint.

While the problem of churn rate may point to customer success, there were customer experience issues present all along the flywheel in marketing, sales, support and even accounting that all led to the low retention.

The flywheel is a great representation of the fact that there is no single solution to any symptom your company may be experiencing. Customer success issues could be causing problems for marketing just as easily as marketing could be causing problems for sales. By making small improvements throughout the entire flywheel, companies can see significant results. That’s exactly what we did for the company I mentioned above and its initial efforts have demonstrated steadily improving retention (the full implementation of our recommendations and sales, success and marketing automation is slated for 1Q19).

Possibilities Created By an Integrated Technology Stack

HubSpot’s introduction of the flywheel does come at an opportune time as it also introduced a customer success product which completes the “HubSpot Growth Stack.” However, this is not just a marketing gimmick. Now that we’ve discussed the importance of the flywheel mentality, of equal importance is building a single infrastructure for your sales, marketing and customer success functions.

HubSpot created the potential for its entrepreneur-scale clients (in my reckoning this is sub-$50 million in revenue) to build advantage vs. competitors here because its software automates these three business functions in a fully integrated solution, operating against a common database. With an open API that can incorporate more than 100 validated solutions as well as supporting custom interfaces, the use cases are limited only by the imaginations of the users and partners like us who invent new ways to solve customer problems. Alternatively, you might approximate the benefits and experience offered out of the box by HubSpot by integrating multi-vendor sales, marketing and customer service solutions, but it is likely to take more time, money and custom programming.

Here are a few of the benefits we’ve seen from using the flywheel model within an integrated platform:

  • Seamless Transition Between Marketing, Sales and Customer Success: Another reason sales reps are hesitant to upload their contacts into a CRM is the fear that will trigger untimely or irrelevant marketing messages. By integrating all solutions, you can easily have marketing activity stop when a client is in discussions with sales. Even better, marketing messaging can switch to a “sales close support” process that is designed to drive decision-making.
  • Sharing Relevant Information: When a customer calls into support with an issue, they now have the ENTIRE history of the company’s interaction with the client from what marketing materials they’ve read to what subscription models they were sold. Likewise, marketing and sales can learn from common customer success cases to improve and tailor their experiences and the product itself.
  • Simpler Migration and Management: By relying on a single solution, migration to the new platform is made much simpler and there is never a need to manage or sync data between multiple systems or databases. All of the integrations also come ready to go, meaning in only a month or two you will be well on your way to making big changes for your company.

Effective technology is the key to building a high performing SaaS or professional services business. You can’t attract capital or a high valuation without great benchmarks and the technology to get there. Using a single integrated solution allows the flywheel model to create and store momentum toward your goals.

Want to dive deeper into building a high performance sales, marketing and customer success organization? Book an exploratory call with me at this link and let’s get you flying!

Book a Meeting

Write a Comment

New Call-to-action