Chapter 13: Leveraging the Benefits of the Marketing Flywheel

From the funnel to the flywheel to revenue operations (RevOps), what does it really mean for businesses and—more specifically—for marketing, sales, and service teams?

Before we dive into the tactics, we must first understand the fundamental differences between these three (marketing, sales, and service) concepts. The funnel was the initial concept of how marketing and sales teams attracted and acquired customers. It was a more linear approach to track how many prospects came in from the top and eventually channeled their way to the bottom of the funnel until they became customers.

As customers became more empowered and knowledgeable and the flow of information became easier and more transparent, it became increasingly important for businesses to pay attention to how customers were treated as this eventually impacted their growth. Word of mouth could never beat any other marketing tactic to generate more customers. Therefore, the flywheel concept was born as it placed customers at the forefront of all business decisions. The funnel produces customers while the flywheel ensures those customers help you grow.

Finally, RevOps emerged as a solution to help manage technical challenges that inevitably arise when companies grow. With both the funnel and the flywheel, it is important to ensure that everything works and there is a smooth handover from marketing to sales to customer success and customer service. The goal is to reduce friction and ensure customers and prospects have a seamless experience when interacting with your company, and this is the role RevOps plays.

Now that we have understood each of these concepts, let's explore how the flywheel and RevOps can contribute to your company's further growth and improved experience for your customers. In this chapter, we will explore the following topics:

• Achieving faster growth and increasing profit with the flywheel
• Aligning marketing and sales using HubSpot properties
• Using RevOps to boost business sales

Let's dive right in.

Technical requirements

To get the most out of this chapter, you will need the following:

• HubSpot Marketing Professional
• Super admin access to your HubSpot portal
• Admin access to each of your business's social media ad platforms (LinkedIn, Facebook, and Google AdWords)

Achieving faster growth and increasing profit with the flywheel

Two words—customer experience. This is what every business today should be focused on in order to ensure business continuity (BC) and growth. As Brian Halligan, Chairman of HubSpot, succinctly put it, "It used to be what you sell that really matters, now it's how you sell that really matters." Flywheel is a term derived from mechanical engineering. It describes a circular object whereby once an additional force is applied to it, more energy is produced, causing the object to rotate faster.

This concept was then adopted in marketing in the last decade as it became clearer that for companies to generate a continuous supply of leads and prospects, they must rely on their customers to produce that momentum for them. Therefore, any friction that interferes with a good customer experience will automatically slow this momentum, resulting in fewer leads and—eventually—sales.

It is therefore important for all business units (BUs)—marketing, sales, product, and service—to be aligned to one goal: outstanding customer experience. But how does a company actually achieve this?

Aligning teams for outstanding customer experience

First, it would be to ensure that from the very first interaction with your company, a prospect feels heard and understood. Your offer should match their needs and meet them at the exact time they are looking for a solution to their current challenge. This is where the concept of inbound marketing comes into play. As a marketer, your intention should be to create a blog post, e-book, or other marketing assets with the goal of attracting your target prospects to educate them on why this challenge exists and provide possible solutions to this problem. With this action, you are taking the first step in providing relevant information. It then becomes timely because you have optimized this piece of content using search engine optimization (SEO) techniques, so once a user searches for these specific keywords, your piece of content shows up for them in the search engine results. You didn't just take out a TV ad and show it to 1 million random people, interrupting their favorite TV show or sports game.

The next step would be to engage qualified prospects using tactics such as email nurtures, free trials, or webinar events to get them to speak to your sales reps or try out your product before purchasing. At this stage, marketing and sales teams are working very closely together to ensure prospects understand the benefit of using your product instead of the competitor's so that they can finally convert these leads to customers. For most companies operating under the funnel method, this is where the process usually stopped. Once a customer is gained, the goal has been achieved, and it is assumed that marketing would start the process all over again.

Implementing systems and processes to facilitate a RevOps strategy

It was soon discovered, though, that focusing on delighting customers and ensuring they have a smooth onboarding experience and have gained the promised benefits of your product or service would eventually bring your company future leads. But for this process to happen, many more departments had to be involved and processes put into place to have overall transparency of information about the customer. This is where RevOps plays an important role as it now includes connectivity of the various systems each department uses and how they each reflect the information needed. Having these systems and processes in place is critical for delivering an outstanding customer experience.

One example of a system that facilitates a RevOps strategy is a customer relationship management (CRM) system such as HubSpot that connects the entire customer life cycle—marketing, sales, and service—in one view in order to drive predictable results. Take, for example, HubSpot's CRM that allows you to see on one screen the marketing details of a customer—for example, which channel brought them in, such as direct traffic—then, on the same screen, you can see details of conversations with your sales reps, and on the customer service side, issues they are currently trying to solve with your service team. This is all in one view, as seen in the following screenshot:

Figure 13.1 – HubSpot customer lifecycle view per contact

An example of a process that needs to be in place is an agreement on specific metrics that each team should be responsible for attaining and measuring. For instance, marketing teams may be responsible for website traffic and—more specifically—net new monthly visitors and visitor-to-submission rate to ensure the quality of traffic is qualified. Sales teams are responsible for the number of calls completed per month and the number of deals closed per month, while customer success teams are responsible for keeping their eye on the churn rate of customers within 1 year.

Implementing all these strategies just described successfully leads to a delightful customer experience that in turn leads to the ultimate goal of having a faster-turning flywheel. No longer are you concerned about the linear relationship the funnel provides to your bottom line, but now, you are focused on creating momentum with your customers so that they can in turn be the force within your flywheel that increases revenue and ensures predictable growth.

Now, let's look deeper into exactly how we can leverage the flywheel concept to match the way we sell to the way buyers purchase.

Aligning marketing and sales using HubSpot properties

One of the most misunderstood—and, therefore, misused—properties in HubSpot is lifecycle stages. Up until writing this chapter, HubSpot lifecycle stages were predefined and could not be changed. However, in recent times, HubSpot now allows companies to define their own lifecycle stages to fit their organization's needs.

Lifecycle stages in HubSpot consist of seven stages—Subscriber, Lead, Marketing Qualified Lead (MQL), Sales Qualified Lead (SQL), Opportunity, Customer, Evangelist, and more. This property is meant to highlight at what stage a prospect is in their journey with your business; therefore, it combines the activities of marketing, sales, and customer service. It generally isn't a field that should be manually managed; the more effective way to use it is to build conditions that will automatically update these lifecycle stages through workflows.

One such way to build these conditions is through another field called Lead Status. Lead Status exists to help sales reps understand what is the present situation with a contact and what should be done with that contact now. Unlike lifecycle stages, you can update this field to your preferred statuses. HubSpot offers default options such as New, Open, In Progress, Attempted to Contact, Unqualified, Connected, Open Deal, and Bad Timing. It is important to note that these statuses are different from the actual deal stages in HubSpot that were discussed in Chapter 3, Using HubSpot for Managing Sales Processes Effectively. To understand the difference, remember that lead statuses help you identify which contacts need to be worked on or followed up on, while deal stages let us know which contacts are an active opportunity and which part of the sales process they are in currently.

So, how do you actually use HubSpot to match the way you sell to the way buyers purchase? There are several methods used, but here, we will focus on two of the most popular methods, as follows:

• Sales-focused approach: This method is very popular among new companies or start-ups that need to show traction quickly. The goal is to get as many customers as possible quickly, and therefore the sales teams will reach out to every qualified contact that comes into the funnel. This does not necessarily mean they have to request a meeting with sales or sign up for a free trial, but they have certain characteristics—for instance, the right company size, the right job title, the right industry—and this is sufficient to deem them qualified. With this approach, you will align lead statuses to lifecycle stages, which will be explained further shortly.
• Buyer-focused approach: On the other hand, more mature companies that have already gained traction in the market or are pursuing a very targeted or niche audience will prefer this method. Here, the sales teams would not pursue a contact until they have raised their hands and requested a demo or signed up for a free trial. Therefore, marketing is required to set up very tailored paths to nurture and engage these prospects so that they will take this action. With this approach, you will align actions the buyers take to lifecycle stages, which we will explain further.

In the following sections, we will discuss each of these approaches in depth.

Setting up HubSpot using a sales-focused approach

As mentioned previously, if you are a company looking for traction quickly, you will need your sales teams to be on top of all leads that come into the CRM. However, you will need to set this process up in such a way that every single contact is accounted for, and it can be clearly understood which part of the funnel they are in and what is the status of your engagement with them. The following diagram illustrates how this alignment might look:

Figure 13.2 – Aligning lead status to lifecycle stages

Remember that lead statuses can be changed to match your internal sales process and lifecycle stages. In the preceding example, when each of the lead statuses is updated, the lifecycle stage should be updated to the corresponding value, as seen in Figure 13.2. Note that most of these actions can be automated using HubSpot workflows.

For instance, every new contact that enters your database can be automatically updated to a New status by setting the enrollment trigger of a workflow to Create date is after DD/MM/YY, Lead status is unknown, and Lifecycle stage is unknown, as shown in the following screenshot:

Figure 13.3 – Enrollment triggers for workflow when setting contacts as New

Then, in the same workflow, you can set the lifecycle stage to Lead and lead status to New. The following screenshot shows a graphical representation of what this workflow will look like in HubSpot:

Figure 13.4 – Setting property values in workflows

Similarly, instead of having sales reps manually update the lead status each time a contact responds to their emails or they complete a phone call, another workflow can be triggered where the enrollment criterion is Recent sales replied email date is known or Call outcome is any of Connected with all the preceding values for lead status and lifecycle stages, as seen in the following screenshot:

Figure 13.5 – Enrollment triggers for a workflow updating lead status to Connected

Then, you can add steps to set the Lead status property value to Connected and the Lifecycle stage property value to Marketing Qualified Lead, as shown in the following screenshot:

Figure 13.6 – Setting Lead status to Connected and Lifecycle stage to Marketing Qualified Lead

The goal is to automate as many of these statuses as possible so that as the sales teams do their daily tasks, the lead statuses and lifecycle stages would be automatically updated according to the actions taken. This will significantly reduce the time sales reps will spend maintaining the CRM. Setting up this process has the added benefit of reducing friction between marketing and sales teams as marketing teams will finally have clarity on where each contact is in the customer journey. This is critical in helping them to understand where customers are getting stuck so that they can improve the experience in that part of the funnel and increase the number of qualified leads that get to sales teams.

Setting up HubSpot using a buyer-focused approach

Another common method other companies use when pursuing a more targeted persona or wanting to ensure contacts are qualified sufficiently before passing them on to sales is a contact's lifecycle stage only being updated if they took specific marketing actions. For example, a subscriber would be anyone who left only their email address when signing up for a newsletter, while a lead would be anyone who downloaded at least one piece of top of the funnel content—such as an e-book—and submitted a bit more information in addition to their email address, such as their name and job title.

On the other hand, a contact would only be updated to a marketing qualified lead if they took several actions, such as downloading at least three pieces of content and visiting at least three other website pages besides the asset pages where they downloaded the content. Usually in this method, marketing is qualifying a contact's actions using the IBANT methodology, which is a sales acronym that stands for Interest, Budget, Authority, Need, and Time. In other words, depending on the marketing actions a prospect takes, they are qualified using this IBANT method and their lifecycle stages are updated accordingly. The following diagram shows how lifecycle stages are mapped to the qualification criteria of a contact:

Figure 13.7 – Lifecycle stages mapped to the IBANT methodology

To set up these processes in HubSpot, you can also use workflows so that the lifecycle stages would be updated accordingly. For instance, according to this diagram, a contact would only be updated to SQL when the person has shown interest—that is, they have visited a few key pages on the website—as well as being the right authority—that is, their job title includes the words senior or VP or Head or Director. Then—most importantly—they have requested a meeting, which could take the form of filling out a demo form or a Contact us form.

The workflow will therefore have the following criteria as its enrollment trigger:

1. Contact has filled out demo form or Contact us form
2. Contact's job title contains any of VP, Director, or Head
3. Contact has visited pages with Uniform Resource Locators (URLs), pricing page, and About us page
4. Update the lifecycle stage to Sales Qualified Lead

The following screenshot shows what the workflow will now look like:

Figure 13.8 – Workflow for updating a contact to Sales Qualified Lead using a buyer-focused approach

Notice in each of the previous workflow examples shown that the previous possible lifecycle stages of the contacts are added to the enrollment trigger. This prevents the workflow from moving a contact that is already in a more advanced stage backward. You would never want to move a contact that is a current opportunity back to a marketing qualified lead or lead, even if the opportunity falls through. Moving contacts backward distorts the results of your funnel and does not give a true representation of your conversion rates from lead to MQL and SQL, and so on. So, if a deal falls through, there are other ways to update the contact's status—for example, updating the deal stage to Closed Lost—but the lifecycle stage would always stay as Opportunity. This allows the marketing team to nurture these contacts differently in order to re-engage them at a future date.

Using RevOps to boost business sales

In order to fully understand how to build a RevOps strategy, it is important to first understand which challenges existed to birth this new category. RevOps came into being to solve three core issues for companies, as follows:

• To get all systems in a company connected so that information can be shared in a secure but cohesive manner
• To improve misalignment between marketing, sales, and service
• To drastically improve the customer experience so that it will be more personalized at scale

So, developing a RevOps strategy would mean you are solving one of these core issues. Let's take a look at each of them and see how most companies are tackling these issues.

Connectivity and security strategy

This challenge became more prominent as the marketing and sales technology stack began to grow exponentially. Just take a minute to count how many different systems your marketing and sales teams use today. Most likely, there is a website built on WordPress or Wix that is being optimized using SEMRush to improve organic rankings. Then, there is a need for a platform such as Mailchimp or ActiveCampaign for sending emails, multiple social media accounts, and paid ad platforms such as Google Ads or LinkedIn Ads. On top of that, you may be using a landing page platform such as Leadpages or Unbounce and planning an account-based marketing (ABM) campaign using Demandbase or Terminus. Then, because your analytics are not connected to each of these platforms, you may be considering an analytics platform such as Google Data Studio or Databox to unify all analytics coming from different sources. And that was just marketing.

Sales teams today are also using a host of tools such as Outreach or Salesloft for prospecting to new leads, LinkedIn Sales Navigator or ZoomInfo for sourcing new leads, Gong for tracking calls, Bombora or Clearbit for sales intelligence, and so on. In the end, most companies are stuck trying to get all these systems talking to each other and mostly talking to their main system—the CRM—so that all these insights can be captured.

The challenge, however, is that generally, these systems weren't necessarily built with the foresight of having to connect to your bespoke systems, therefore connecting them all requires developers to consider creating application programming interfaces (APIs) to facilitate such integrations. So, how does a RevOps team begin solving this challenge?

The first task is to understand exactly which information is needed in order to accurately predict future revenue and track current revenue. You then need to consider what are the options for transferring data from one platform to another without losing information and—more—importantly security. With the rise of the General Data Protection Regulation (GDPR) and consumer protection laws, businesses must be ever more cognizant of data falling into the wrong hands or being misused in any way. The systems being considered therefore must have very strict security parameters.

Once these requirements are clearly outlined, then an exploration of which tools are best suited for the job can be done. This is how you make an informed decision on the systems your company needs and ensure information can be distributed in a secure and timely manner.

Unifying communication between marketing, sales, and service

Historically, marketing and sales teams always had different opinions on the lead quality of the prospects they were handing over. One of the more regular occurrences was that service teams were also finding themselves in difficulties with the customer as sales reps would often promise certain features, capabilities, or even pricing during the sales process to close the sale. Then, once the customer had made a purchase, these options were not quite available.

RevOps teams thus had to step in as the overarching layer to glue these teams together and get them responsible for each other's key performance indicators (KPIs). For example, marketing teams were no longer just responsible for increasing website traffic as their main KPI for some organizations; it was necessary to extend this KPI to the number of qualified meetings booked. Similarly, sales teams were no longer responsible for just the number of customers closed each month, but their KPI also included keeping low the number of customers that churn after 3 months or 6 months. Likewise, customer success teams were no longer just being measured by the number of customers that successfully completed the onboarding process but by how many of them they were able to upsell or get to extend their existing contracts.

So, when considering implementing a strategy for this part of your organization, you need to analyze which part of the funnel is leaky or contributing to the most friction in your flywheel and implement systems and processes to reduce this friction. Adding further KPIs or success measures to each department is one strategy that helps unify these teams.

Personalization at scale to improve customer experience

Customer experience, as we have already established, is the foundation of an organization's success in this new connected world. Customers expect you to know their needs sufficiently enough in order to address them, sometimes even before they indicate they have an issue. Therefore, to meet this need, organizations are employing RevOps teams to be the gatekeeper of the experience customers receive, as their KPIs are tied directly to revenue impact.

For companies to earn their customers' trust and—at the same time—provide the personalized experience they are expecting, teams must have visibility across the entire customer journey so that they can provide a timely response.

Testing the impact of the flywheel

At the time of this writing, there is no benchmark of measurement your flywheel should achieve in order for you to know if your organization is performing well or not. The goal is simply to get it turning faster, and this is usually seen in the growth that is achieved month on month, quarter on quarter, and year on year. The higher these growth metrics, the faster your flywheel is spinning. But if you wish to have a more overarching picture of how well your flywheel is performing, check if your marketing team can take a vacation for 1 month and if your business will still gain new prospects and qualified leads for your sales teams to close.

As well as this measurement, here are some more formidable metrics that can also be used to track activity on each part of the flywheel:

• Attract: How much website traffic are you gaining from month to month? Note that you would want to look at net new visitors primarily as this would generally lead to more new customers.
• Engage: There are usually two phases of this metric. The first phase measures intent to purchase. For example, for software companies with a free or trial version of their product, you would want to track how many free/trial users are signing up each month; for e-commerce businesses, you would probably want to track how many people click the link to purchase; and for tech companies, you would want to track how many people sign up for demos. The more of these types of users you have, the more momentum your flywheel gains.

The second phase measures actual purchase—that is, how many of these qualified leads that signed up for a free trial or booked a demo, or clicked the link to purchase, actually turned into customers. And then, you would want to track how many of these customers churn. The more customers churn, the more your flywheel loses momentum.

• Delight: Understanding how many of your customers would recommend your business is a great metric to measure delight. You will know this by sending out your Net Promoter Score (NPS) surveys to existing customers. A higher score with more customers answering the survey generates more momentum for your flywheel, while a low promoter score with fewer customers responding will result in your flywheel losing momentum.

Measuring these KPIs allows you to understand how well your flywheel is performing and gives you the opportunity to identify gaps and areas of friction.

Summary

Today, the flywheel has become the cornerstone of most business operations as it puts the customer at the forefront. However, this is not to say that the funnel is totally irrelevant. For some business use cases, the funnel still has value, but when combined with the flywheel, the force that is expended from customer satisfaction keeps the wheel spinning, allowing your teams to produce regenerative business without too much effort.

So, by now, you should be considering two options: either sending your marketing team on a 1-month sabbatical or realizing that if your customers are not the center of every conversation in your business, it's time to consider implementing a RevOps strategy to ensure BC. In the next chapter, you'll learn how to use HubSpot for every type of business.

Questions

Have a go at answering the following questions:

1. What is the difference between the funnel, the flywheel, and RevOps?
2. How does implementing a RevOps strategy improve alignment between marketing and sales?
3. Which metrics can you use to measure the speed of your flywheel?

References

• The Flywheel: https://www.hubspot.com/flywheel
• How the Flywheel Killed HubSpot's Funnel: https://blog.hubspot.com/marketing/our-flywheel?_ga=2.227119064.430926925.1652084970-1769221773.1652084970
• Growing Your Business With a Flywheel Model: https://academy.hubspot.com/lessons/flywheel?hsCtaTracking=12bfc6bc-820a-4ce1-b29a-e5e21549b948%7C1d137fed-f7d5-4d10-b7d7-9e0e0d0b920f
• RevOps: The Modern Operating Model for Fast-Forward Organizations: https://www.gartner.com/en/articles/revops-the-modern-operating-model-for-fast-forward-organizations
• What Is Revenue Operations (RevOps)? A Complete Guide: https://www.salesforce.com/resources/articles/what-is-revenue-operations/