As a business owner or marketer, you are aware that acquiring new customers is way more expensive than retaining one. Therefore, you are always...
Why The Conversion Funnel Is Dead In 2020
TLDR: Don’t just try to ‘close’ your customers. Instead, solve their problems and foster a relationship with them. Yes, the funnel is dead. Stop using it We all know the adage that customers are always right. But much more than that, it’s important to put customers first – before anything else. There was a time… Read More Why The Conversion Funnel Is Dead In 2020
TLDR: Don’t just try to ‘close’ your customers. Instead, solve their problems and foster a relationship with them.
Yes, the funnel is dead. Stop using it
We all know the adage that customers are always right. But much more than that, it’s important to put customers first – before anything else.
There was a time when sales and marketing revolved around a vertical funnel. Commonly known as the purchase funnel, it is also referred to as “customer funnel”, “marketing funnel”, “sales funnel” or “conversion funnel”.
It is also known as the AIDA model. Customers move through four main stages known as awareness, interest, desire, action.
The funnel is used to help businesses understand buyer behaviour.
Customers enter the top of the funnel as leads. Through engagement by the sales team, they are converted into prospects, and ultimately convert into customers after they make a purchase.
The problem with the funnel is that this model gives power to the salespeople – not the customers.
The sales representatives in a company will call up a lead and tell him/her what they want. They use a scripted approach with techniques that they think will work.
When using the funnel, it’s also all about the numbers – as opposed to the customers. It is assumed that out of 100 people who enter the funnel, only a small fraction of them will end up being customers.
Inevitably, the funnel treats customers as afterthoughts. The funnel also does not talk about how customers can help a business grow.
Why the customer funnel is dead
If you want customers in 2020, they cannot be treated like an afterthought.
Customers don’t want to be told what to do or what they want. Customers want to be in control.
Look around – pretty much everyone is on their phones. They have access to the internet every second of the day. They are already learning about your products and services, reading reviews, and validating all your claims – before even engaging with your products or services.
They don’t need you to tell them what they want or what to do. They need you to make it easy for them to get what they want. And solve their problems at every stage of their customer journey.
Pro tip 💡 Don’t tell customers what products you offer. Give them a solution to their problems.
So if I don’t use a funnel, what do I use?
Goodbye funnel, hello flywheel
When you’re making customers the center of everything, it’s best to adopt the flywheel approach.
Here’s what it looks like:
The flywheel model has been a popular alternative to replace the traditional model.
The idea here is to design your marketing and sales strategy around the customers.
You attract them with content that is relevant to them, engage them by fostering a relationship with them, and delight them every step of the way in their customer journey.
This concept of flywheel was introduced by James Watt about 200 years ago. Watt is the inventor of the light bulb, which is why his name would sound familiar to you.
Essentially, a flywheel is simply a wheel that is energy efficient. It works on momentum. You get the wheel spinning and generate a momentum of customers.
Then, you use the momentum generated to increase sales and referrals.
Using the flywheel model, you’re not the only one working hard to make your business grow. Your happy customers will help grow your business too.
One company that is a firm proponent of the flywheel model is Hubspot. They have even realigned their entire company to function based on the flywheel.
“Here at HubSpot, our flywheels represents a circular process where customers feed growth. We’ve invested more in customer marketing, more in customer advocacy, and more in creating delightful onboarding for new customers.
We’ve also invested in an integrations ecosystem that helps customers do more with HubSpot and creates real value for people who adopt our suite of software,” says Jon Dick, VP of Marketing at HubSpot.
Another brand that is using the flywheel and seeing tremendous results in Starbucks.
The brand’s digital flywheel strategy which includes a comprehensive loyalty program has led to an incredible growth in their customer base. According to this site, its active members has increased by 15% year over year to 18 million in 2019.
As you can see, the flywheel is taking over the future and forcing brands to revamp the way they have been doing things.
If you want to grow your business in 2020, let your customers help you with that. Plan your strategies around customers, solve their problems, and delight them.