Implement The Flywheel Marketing Model To Accelerate Business Growth

As an entrepreneur, it's very easy to fall into the trap of searching for the one big thing that will lead to business success. Unfortunately, as a result of this approach, we often find ourselves jumping from one opportunity to the next all without really building meaningful momentum in a single clear direction. So, it's important to recognize that great businesses aren't built on a single idea or insight.

Instead, they tend to be the result of a series of well-executed steps that contribute to compounding results. So, each step builds on previous work to create better results. And of course these better results unlock new and even superior opportunities in the future.

So, let's explore how successful companies like Amazon leverage the power of the Flywheel concept in order to accelerate their growth. Now, before we break down the exact components that make up their flywheels, let's begin by setting the stage with insight number one.

The power of momentum in business. The flywheel concept was originally made famous by author Jim Collins in his book "Good to Great." He invites readers to imagine a massive flywheel mounted horizontally on an axle. It's 30 feet in diameter, 2 feet thick and 5,000 pounds. And your goal is to get this flywheel spinning as quickly as possible. Now, naturally, any effort to get this thing moving is going to begin with a tremendous amount of effort with very little movement to show for it. But, if you keep pushing in the same direction over time, eventually it becomes easier and easier to get the flywheel moving.

You begin to build real momentum. The same is true when it comes to success in business, there is no one idea or insight that creates momentum. Instead, it's a result of consistently pushing in one direction over an extended period of time. And it's this style of momentum that can ultimately cause a business to appear like an overnight success where people outside of the business suddenly see fantastic results but they don't understand the momentum that has been building up for years, where small wins lead to medium wins, medium wins lead to large wins and then suddenly this success appears out of seemingly nowhere. So this is a very powerful and important concept in business.

An effective marketing flywheel creates a circular process where customers feed growth. This involves three stages:

• Attract: It is all about awareness of your brand. Ex: Content marketing, SEO/Keyword strategy, Social media content etc.
• Engage: A step beyond simply dropping leads into a marketing funnel. Ex: eBooks and whitepapers, Webinars, Tutorials, free trials etc.
• Delight: This stage turns a customer's journey into an experience they are excited to share. Ex: Proactive customer service, Loyalty programs etc.

Cultivating a positive experience with a focus on building relationships helps turn your customers into promoters of your brand. This makes the wheel spin right back to the attract phase.

And with this in mind, let's continue on to insight number two, how great businesses use the flywheel. Almost any action that contributes to forward momentum can be helpful but the real power behind the flywheel model is in building a momentum machine, creating a virtuous cycle that feeds on itself in order create better and better results over time.

For example, let's take a look at Amazon's flywheel. It starts with lower prices on more offerings, lower prices leads to an increase in customer visits. More customers helps to attract third party sellers, more third-party sellers expands the store and extends distribution that in turn helps grow revenues relative to fixed costs. And this greater efficiency then enables Amazon to lower prices even further. So as you can see, improvements to any one of the five components leads to better performance in all of the remaining components and this creates a virtuous cycle.

Let's continue on to another example from mutual fund giant Vanguard. The first component is offer lower cost mutual funds, lower cost funds deliver superior long-term results for clients, superior long-term results help to build strong client loyalty. Strong loyalty increases the total assets under management, increase assets under management helps to generate economies of scale and finally, economies of scale lower the costs of the fund. Now again, notice how each component isn't merely a next action step, but almost an inevitable consequence of success in the previous step. So, if you nail the first step you're launched into the next and then into the next and then into the next, almost like a positive chain reaction. So you're building momentum with your business.

Let's go over one final example that is a popular model from the podcasting space. The first component is produce valuable long form content, long form content can be cut into short, shareable, social clips. Shareable social clips help to attract more first-time listeners. Some of those first time listeners will turn into loyal subscribers. A growing base of loyal subscribers helps attract more popular guests. Finally, popular guests help you produce more valuable long form content. So podcasts like The Joe Rogan Experience didn't just become an overnight success. Instead, they slowly built momentum over years of executing on a simple formula and this formula allowed them to grow their audience. And at the same time growing their audience helped in turn with attracting more in demand guests. And it created a virtuous cycle which produced better and better results over time. This is the power of identifying and executing on a simple flywheel concept.

Let's continue on to insight number three, tips for how to build a great flywheel. In some cases you can base your flywheel concept on proven formulas within a certain category. This is especially true if you're using a common platform or common medium like podcasting or social media or content marketing or even something like e-commerce. In many cases, you can find tried and true formulas for how to be successful within that space. Another great option that you have is to model the flywheels of highly successful businesses like Amazon or like Vanguard, and to just simply study them, see what's working for them, see what you might want to borrow when it comes to building your own flywheel. And this is especially powerful when studying companies that are not competitive with you. So looking at alternative industries out there, getting a sense for what works, what doesn't work and then using that as inspiration and insight for your own model.

Now, if you've already established a successful business and you simply want to discover the key elements that make up your flywheel so that you can identify them and share them with the rest of the team, then I highly recommend the seven essential tips from "Turning The Flywheel" by Jim Collins. Let's quickly go over an abridged version of that list.

1. Create a list of significant replicable successes your organization has achieved. This shouldn't include new initiatives and offerings that exceeded expectations.
2. Compile a list of failures and disappointments. This should include new initiatives and offerings that have failed outright or fell far below expectations.
3. Pair the successes to the disappointments and ask what do each of these tell us about the possible components of our flywheel?
4. Using the components that you've identified, sketch the flywheel. Where does it start? What follows next? You should be able to explain why each component follows from the prior component.
5. If you have more than six components, you're making it too complicated, consolidate and simplify to capture the essence of the flywheel.
6. Test the flywheel against your list of successes and disappointments. Tweak the diagram until you can explain your biggest repeatable successes as outcomes arising from the flywheel and your biggest disappointments as failures to execute or adhere to the flywheel.
7. Test the flywheel against the three circles of your hedgehog concept as covered in "Good to Great." A concept is an overarching strategy that flows from understanding the intersection of the following three circles.

i) What you're deeply passionate about.

ii) What you can be the best in the world

iii) What drives your economic or resource engine

Does the flywheel fit within the three circles of your hedgehog concept? Keep in mind that the goal is to design a flywheel where improved performance in any of the components leads to superior results in all the remaining components. This way, you're able to build a momentum machine. And then it's simply a matter of executing on that flywheel strategy and finding ways to renew and improve it over time.

Now, it's important to note that the flywheel concept is only one of the core ideas covered in the good to great framework. The complete model includes three stages, disciplined people, disciplined thought and disciplined action. And within each stage are two key concepts and then wrapping around the entire model is the flywheel that we covered here.

That's it for this post, if you have any questions or comments about anything that we covered here, let me know down in the comment section.

Thank you for reading.

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