Traditional funnel-centric growth models are giving way to more powerful, self-sustaining systems. Have you heard of The Flywheel Growth Model?
Coined by Jim Collins in his bestseller “Good to Great”, the Flywheel concept was brought into the limelight by Jeff Bezos, who famously applies it to fuel Amazon’s growth. What exactly is the flywheel model, and how can SaaS companies benefit from it?
What is the Flywheel Growth Model?
The flywheel growth model is a system where each component feeds and amplifies the next, creating a self-reinforcing loop that propels growth. Imagine a large, heavy disc that’s hard to get moving, but once it does, its own momentum makes it keep spinning with minimal effort. That’s the flywheel in action!
There are three main components to the Flywheel Growth Model:
1. Acquire Users
First, you attract potential customers through quality content, SEO, word-of-mouth referrals, or any number of acquisition strategies.
2. Engage with those Users
Once you’ve caught their attention, it’s all about engaging them with an incredible product or service experience that exceeds their expectations.
3. Retain those Users
Lastly, you work to keep those customers by continuously adding value and nurturing the relationship.
The Momentum Magic
The true power of the flywheel lies in its momentum. As you satisfy each customer, they become not only loyal repeat buyers but also enthusiastic advocates who help attract more customers, turning the flywheel faster and building momentum.
Let’s take Slack, the business communication platform, as an example. Slack used its product as a customer acquisition channel. The more people used Slack, the more teams they invited, creating a cycle of growth that fed itself, leading to Slack’s spectacular success.
The Power of Delighted Customers
The crucial point is the importance of satisfying and delighting your customers. In the flywheel growth model, customer delight isn’t an end goal; it’s the fuel that powers the whole engine. Amazon is a shining example of this. Their customer obsession mantra keeps their flywheel spinning, driving referrals and repeat business.
In a SaaS context, think of Zoom, which skyrocketed during the COVID-19 pandemic. Why? Because it focuses on delivering a smooth, user-friendly experience that delights customers. This resulted in a massive uptick in word-of-mouth referrals and organic growth, turning their flywheel at an astounding speed.
The Flywheel > The Funnel
While the traditional sales funnel focuses on a linear process ending with a sale, the flywheel model is a customer-centric, cyclical process prioritising ongoing engagement and growth. It’s the difference between having a ‘transactional’ relationship with your customers and a ‘symbiotic’ one.
The flywheel model presents a sustainable and effective strategy for growth. Creating a virtuous cycle that acquires, engages, and retains customers builds momentum that drives business growth.
Every customer interaction can either propel your flywheel or slow it down. So focus on delighting customers at every stage, and watch your flywheel spin your startup into the stratosphere!
Photo by Andrew Draper on Unsplash