Amazon Funnels

Amazon FBA – Funnels vs Flywheels

Want to build a better brand? You may want to ditch the Funnel and move to a Flywheel

If you’ve been in the selling game for any amount of time, you’ve heard of funnels. Funnels are the touch points that convert visitors into customers.

Funnels have been the go-to business model for a lloooonnnggg time.

What if there was a hole in them?  What if there was something better?

Enter the flywheel.

If you have never heard of the marketing flywheel before, keep reading. It is how Bezos built Amazon, and was made famous by marketing powerhouse Hubspot.

The funnel is as classic as a tool can get in marketing. It is simple concept of breaking down the buyer’s journey into stages. The stages are broken down into:

Awareness
Consideration
Conversion

The top of the funnel is wide. The game is to get as many people in as possible.
This simplicity is also the biggest flaw of the funnel model.

Attracting new prospects is THE most expensive part of business sustainability.

We all know only so many people that see our content are going to be interested. We know that there will be drop off at each stage. Only a small part those at the top stages will take the desired action – usually a purchase.

Knowing this, businesses put a lot of resources into filling the funnel with as many leads as possible in hopes of more sales at the bottom.

This is also the biggest flaw of the funnel. Continually attracting new prospects is THE most expensive part of this type of business.

Amazon marketing funnel

Drawing out a funnel can be helpful for visualizing the buyer’s journey.

But does it really represent how buyers make decisions? Does it represent how they consume marketing content? While the funnel may help marketers think about the customer journey, it doesn’t help them think strategically about growing their business.

A flywheel can solve those issues.

What is a Marketing Flywheel?

If you want to really stand out, you need to be “Experience Disruptor”. This is the term Hubspot CEO Brian Halligan calls businesses that create a new marketplace experience for their customers.

The flywheel model is how you map out those “new experiences”.

If you’ve not heard the term “Flywheel” before, let’s start there.

A flywheel is a mechanism in a machine that stores energy for increasing a machine’s momentum. Flywheels are used in trains, buses, and cars. Flywheels create continuous power in engines.

There are 4 concepts that you need to know about when dealing with flywheels:
Force
Momentum
Stored Energy
Friction

Marketers need a flywheel to store and use the power of loyal customers. The flywheel is similar to the funnel in that it represents the customer journey in three main stages. Hubspot coins the flywheel stages as:

Attract
Engage
Delight

At the center of the wheel is the customer base. Happy customers fuel the growth in your business. That happiness is much more than your product functioning as expected.

This marketing flywheel is inspired by Amazon’s flywheel business model, also known as Bezos’ Virtuous Cycle.

Hubspot’s flywheel concept is inspired by the Bezos Virtuous Cycle (Amazon’s business model)

amazon flywheel

In a flywheel, everything literally revolves around customer experience. Loyal customers are the energy that fuels all growth. Customers never fall out of the loop. They are not lost energy. Customers and growth are the center of EVERY process.

What destroys this model?  Friction.
“Friction” means anything that causes inconvenience and crushes the customer experience.

Some marketers think that there is room for both the funnel and the flywheel.
Maybe you do too. To know for sure, you need to know the differences between the two.

Why retire the funnel?

In short, shelving the funnel concept may be a good idea in response to how customers have changed the way they make their buying decisions.

The online reviews available to customers has grown in a serious way. With those reviews, there is a growing distrust of marketers and ads. This means customers are more likely to do independent research before making a decision. Also, we don’t control every touchpoint influencing buyer awareness, or decision to purchase.

This combination creates an environment not suitable for a funnel approach.

Your customers are where your best marketing comes from.

In a traditional funnel, the customers are an output. Once they leave the funnel, we forget them and focus on who remains.

The funnel doesn’t work for customer focused businesses. With a funnel, we don’t pay attention to optimizing for repeat customers or the customer experience.

Flywheel vs Funnel, What’s the Difference?

amazon fba funnel

A flywheel and a funnel are very different designs.

Customers as an Endpoint or New Seeds
With a funnel, customers are an endpoint. They are lost energy. Many come and go, and only a few come out of the bottom as buyers.

A MAJOR flaw of funnels is that customers who took action aren’t being used to gain new customers. In other words, the marketing team doesn’t see them for what they are – the BEST seed for gaining new customers.

With a flywheel, customers are the most important part. They are the energy that drives growth of your cash machine. Marketers using a flywheel know the best way to attract more customers is through their existing customers.

As a marketer you have 3 jobs:
1. Get strangers to engage with you
2. Get anyone who engaged to buy from you. This is where the funnel model ends.
3. Get anyone who has engaged OR bought from you to CONTINUALLY re-enagage with you (and bring their friends). This is the Flywheel model.

End-Point vs Ongoing

With a funnel you get no momentum from success and you’re constantly having to chase new customers to hit sales goals.

With the flywheel, marketers use assets they already have. Assets like a social media following, loyal customers, inbound marketing, and a growing and engaged email list. These assets are stored energy that keep growth moving. You then optimize for cultivating as much of that stored energy as possible as this keeps the MOMENTUM going.

Awareness vs Delight
As mentioned earlier, With a funnel, the game is to get as many people in there as possible.
This means the company with the deepest pockets wins as they can put more into driving product awareness.

With a flywheel, emphasis is placed on the delight stage. This is where you’ll find your biggest return on investment. Delight consists of great customer support, quality policy, enjoyable ads, and all things that bring joy to the customers. Delight brings customers back for repeat purchases and gets them talking about your brand.

  • Funnel based marketer –
    Moves customer from 0 purchases to 1 purchase. Cost = $20 for $60 in revenue.
  • Flywheel based marketer –
    Moves customer from 0 purchases to 1 purchase. Cost = $20 for $60 in revenue.
    Then moves SAME customer to purchases 2, 3, 4, 5. Cost = $0 for $250 in revenue.
    Same customer tells 5 other people and 1 of them comes to make another $60 purchase for 0 cost.

Amazon uses this model to optimize all of their processes. Everything is about a better customer experience. They’ve spent $15 billion in distribution centers in the last 10 years alone in an effort to better serve customers.

Zappos also became a billion dollar company selling shoes this way. They focused EVERYTHING on better knowing and serving their customers. In fact, their founder Tony Hsieh wrote a book on it called “Delivering Happiness”.

Flywheels in Action

Hubspot Flywheel

If you’re interested in implementing a flywheel, it is best to look at them from 3 stages.

Attract – Provide Value before you extract value.
This is where customers are drawn to your brand. This happens through creating engaging and useful content for the right people. The key is focusing on content creation that matches the profile of your ideal customer. Yes, you’ll have to put in the work to get underneath the skin of your ideal customers. Don’t go broad clickbait here. Some practical example actions include:

– Paid ads leading to NON-offer content.
-Customer Testimonials
– Nurturing a strong social media following.
Traditional means (word of mouth, events, paid ads)
– Review sites and guest features.

Engage – Make it easy to shop and buy
Engagement happens through creating meaningful relationships with customers. Businesses need to understand clients, their motivations, needs, and pain points. When companies truly empathize with clients, they can provide customers with solutions that satisfy. Some examples include:

Blog with helpful how-to resources
Social Media polls and sharing articles your customers could really benefit from reading
Podcasts
Interactive content
Chat Boxes, text message follow-up, call center, etc.

Delight – Customer success is your success.
Delight is bringing joy to your customers along their journey. It involves giving them an impactful experience that they will want to promote your brand. They will be the customer advocates who bring more into the flywheel. Examples include

Return policies
Free shipping and other shipping options
Reward programs
Regular check-ins
High-quality customer support
Recognizing and featuring their successes – showcasing them to the rest of the world

Negative Force to the Flywheel: Friction

Through all these stages, it is important to identify anything that slows down customer momentum.

This can be any number of things killing your customers’ joy. It is important that above all, you listen to customer feedback as this is your best source for identifying bottlenecks and friction in the process.

How to Shift to the Flywheel

This doesn’t have to be overwhelming. Funnels you already have can lay the groundwork for future flywheels.
Here are some steps to take:

1. Identify the core flywheel metrics your company tracks.

2. Identify your company’s forces by flywheel stage. Re-draw those forces to maximize delight and word of mouth.

3. Identify points of friction between your customers and your employees, and points of handoff between internal teams, that affect customer experience.

Re-align those points of friction to better serve the customer through automation, shared goals, or a reorganization

Hubspot offers homework templates and tutorials on shifting your marketing model to the flywheel. These helpful resources can get your team on the right track.

Is This the Final Farewell to the Funnel?
Funnels have served their purposes for a long time. Perhaps, they still do.  I certainly think they help in planning some of the aspects of the flywheel when you are first starting out

Even if you don’t prefer the flywheel model, what matters is that you are tracking where your customers are coming from, what they are experiencing, and reducing all force that comes against your growth.

I would love to hear your thoughts on flywheels either below in the comments or in our group of over 10,000 amazon marketers on Facebook – Unstoppable FBA Group.

If you really want to dive into getting your brand moving, including a spelled out content strategy for your flywheel, checkout The Unstoppable Marketing Masterclass.  It will truly take your business to another level.

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