matt higgins

Everybody’s heard of the conversion funnel concept. Lately, it’s had some company. The first new term in the customer acquisition conversation was flywheel. As you’d expect, it got a lot of buzz. Next came ecosystem. Here’s what they mean, in terms of definition, and what they mean to marketing, as in their actual value.

Conversion Funnel

This is a much older of a marketing term than you might think, but before we get there, we’re going to state the conversion funnel, buying funnel, purchasing funnel, and shopping funnel are all the same concept. At least in the sense that they all illustrate the same view of a customer’s journey to purchase. Anyway, enough semantics. The funnel concept was invented, get this, back in 1898 by E. St. Elmo Lewis.

The key point in this model is that it shows a hierarchy and that the top is wide and the bottom, actual purchase, is narrow. You start by casting a wide net. Back in 1898 someone might be selling a cast iron stove. The top of the funnel might be all households. They’re the potential customers. The goal at this stage in awareness. The next step down in the narrowing funnel are the people who have some interest. This is followed by the group that has developed a desire for the product. Finally, there’s the action, also known as the purchase, which is also known as the conversion.

The conversion funnel illustrates that the customer is engaging in a journey and the goal is to get them from unaware to customer. With the conversion funnel on our minds as we build a strategy, we know the first step is Awareness, followed Interest, Desire, and Action. This was Lewis’s AIDA model. Combine this with the recognition you’re going from a large group of potentials to a narrow group of actuals helps you understand how the whole process works.

The conversion funnel is fantastic to have in mind as you build a marketing strategy and campaigns. If anything, it demonstrates how messaging needs to change at different points of the journey. The main criticism of the funnel is it’s linear and stops at the conversion, which can imply it only works for a one-and-done approach.

Flywheel

Like a real flywheel that has momentum and keeps turning, the Marketing Flywheel keeps going after the initial conversion. There is no end point. You use the momentum created by the sale to keep going. The other critical aspect of the flywheel is the customer is at the center.

An example of the flywheel at work could look like this: initial awareness is created via a paid social media campaign, prospective customers are then engaged via a benefits-focused video on a product landing page, and after purchase customers are encouraged to register to get a free asset. That free asset can be as simple as an extension on the warranty. “Register your product and extend your 12-month warranty to 18 months for free.” These customers then receive a follow-up email as a thank you and to see if they have any questions about said product and purchase. Hypothetically, say they bought some new slippers. The follow-up email could include a short video on proper care. A video that’s actually useful. If it’s a toy or collectible, it could be a free digital comic or an exclusive wallpaper.

Even without ever having heard of a flywheel strategy, many businesses who understand the idea of a customer journey and/or tailor marketing efforts toward creating raving fans are using tactics that would fall in line with the flywheel. The desire is to turn strangers into customers and turn customers into promoters.

The idea that the relationship isn’t over after the sale is extremely important, but the flywheel, like the funnel, is just a mindset for strategy building. It’s not literal. Just like the funnel shouldn’t be taken too literally. A customer isn’t given the same messaging on rotation. The key idea isn’t new. As we focus on finding customers and getting them to buy, it’s important to also focus on keeping customers.

Ecosystem

A marketing ecosystem used to just describe the entire environment of marketing channels, either as a whole or being used in a specific campaign. It is now being used to describe an approach the same way funnel and flywheel are used.

Simply put, if the funnel is linear and the flywheel is cyclical, the ecosystem is scattered but interconnected. It’s a web. The ecosystem acknowledges that all sorts of customers enter from different points. Like the funnel, it recognizes customers encounter multiple touchpoints before purchase but makes the distinction that the process isn’t linear.

In an age of the buzzword of the week, ecosystem is actually a fairly accurate way to describe the modern dynamic. When the funnel concept was coined, the main form of top of funnel marketing was newspaper advertising. There were no TV or radio ads. There was direct mail, and there were posters and billboards, so there were marketing options but nothing like the plethora of options available today.

So which model is right? All three are. The fundamentals of the conversion funnel still ring true. Customers move through a journey and go from unaware to purchase in stages. This requires multiple touchpoints and different messaging at different stages. The flywheel idea that the relationship shouldn’t end at conversion is 100% accurate. And finally, it’s inarguably true that there are numerous elements in modern marketing and they are all connected and need to be consistent.