Between 2014-2019, the cost to acquire a customer (CAC) for both B2B and B2C businesses rose by roughly 60%. Over the past decade, some estimates suggest that this number could be as high as 200% or more for acquiring customers via eCommerce.
A positive customer experience (CX) can retain more of your customers and help you avoid these higher acquisition costs.
Enter the flywheel approach. This model segments your customer-facing go-to-market channels into smaller, more manageable sectors. The flywheel approach allows small victories within each channel to build momentum for overarching progress for the CX strategy as a whole.
The outcome is helping your customers to grow their business (and yours) once you have them in your flywheel, resulting in them spending more with you, or evangelizing for your brand and indirectly recruiting new customers for you through referrals.
To better understand this, let’s take a flywheel model and see how it can help grow your top-tier customers, and discover how loyalty incentives and promotions can help accelerate that momentum.
The Role of Incentives in the Flywheel
The flywheel model can be broken down into two distinct sections: an inner “ring” that focuses on the three key phases of the customer experience (Attract, Engage, Grow), and an outer ring that features ways of utilizing a loyalty program to achieve each (Value Added Services, Enhanced Marketing, Incentives).
Each of these components should have their own metrics for success. However, to maximize the efficiency of the flywheel, it’s paramount to have them in alignment with each other, since one should naturally impact another throughout the customer journey. The collaboration between each section is what creates a strong, effective CX.
Attract:
The first phase in the flywheel involves attracting potential top-tier customers and pulling them into the experience of your brand, product, and/or service. You do this through enticing marketing strategies that create awareness and generate interest in your brand.
A natural way to achieve this is through a loyalty program, and specifically by introducing exciting program rewards such as incentive trips, concierge-level services, or high-end experiences and merchandise. These are your most loyal customers after all. They need to be recognized for your business with you.
But there are also other tools to capture the attention of your potential audience, be it through the promotion of gamified elements, personalized messaging, or the promise of a substantial reward.
Engage:
Once you’ve attracted customers and begun cultivating that captive audience, it’s essential to keep them engaged.
Community-based program elements like leaderboards and closed-loop social apps are a great way to create a sense of excitement and friendly competition around the experience of buying your products. Self-selection of goals and individualized progress-tracking also ensure that your customers are intrinsically motivated to push forward towards their objectives.
Finally, short-term recognition and promotions can help sustain enthusiasm through longer time frames in a way that makes people feel continuously valued.
Grow:
Of course, where the flywheel really starts to pick up momentum and results is in the third, growth phase of the process. It’s here that your strongest customers start to fuel new growth in your business. But they can’t do it alone.
You have to assist them by leveraging the power of clean, data-driven insights from your loyalty program, which can help you understand their specific needs, pain points, and aspirations.
Through data analytics modeling, you can start to flesh out the areas where more customer spend can be stimulated, and provide value-added services like same day delivery, marketing collateral, or training and enablement that directly address these.
All of this can then be used as part of your account-based marketing (ABM) strategy for new customers, providing profiles of your most high-value targets in your existing market, or even new markets.
Finally, as a sort of “cherry” on the top of this offering, your loyalty strategy can feature opportunities for relationship-building with executives and peer-to-peer communication, such as customer recognition events or end-of-the-year incentive trips. These sorts of memorable experiences put a bow on the entire customer journey and give your customers just another reason to speak highly of your brand beyond their everyday interactions with it.
Building the Flywheel
So, you’re on board with the flywheel concept . . . now what?
For starters, you’ll want to ask yourself some key questions. How you answer these questions will help you begin to focus on your customer experience with the flywheel concept as your overarching model:
- How much are you spending on marketing to new customers vs. existing customers?
- How much are you spending on marketing to big customers vs. your middle 60%? Do you have a different approach for each group?
- Do you have a way to quantify the value you’re extracting from existing customers beyond their initial purchase?
- Do you understand the reasons behind why your customers continue to purchase from you? Have you ever asked them?
- Do you have a coherent customer loyalty strategy?
Armed with these answers, you can begin to segment your customers and allocate resources strategically to enhance the overall CX. Of course, you’ll need the proper data to accomplish this, so finding an effective way to collect and analyze this data will be key.
Consider how your audience tends to engage with your brand. Do they prefer in-person interactions at trade shows, online engagement through your website, or active participation on social media platforms?
Identify the most effective marketing channels and tactics that resonate with your target audience. By focusing on the stickiest forms of marketing for each segment, you can optimize your communication and build long-lasting customer relationships.
Finally, if you truly want to lean into the flywheel approach and enhance your CX, you’ll need to make sure your team is dedicated to this mindset. This means breaking down your sales and marketing teams into meaningful chunks that are aligned, and yet focused on their individual areas of CX.
For example, at HMI we break down our Demand Generation team into Field Marketing, Business Development, and Corporate Marketing. Each individual unit focuses on small wins, but this success isn’t siloed away from the other units; instead, these wins accumulate and build momentum in a synergistic way that snowballs into more and more sustained success.
Conclusion
When you invest in an incentive program, you unlock a wealth of benefits beyond its immediate purpose. Similar to a CRM tool that enhances your overall strategy, an incentive program aligned with the flywheel approach provides multiple facets to fine-tune according to your specific case.
By integrating an incentive program into your go-to-market strategy, you can elevate customer engagement, foster loyalty, and drive business growth.
Remember, the key lies in attracting, engaging, and helping your customers grow, all while delivering exceptional experiences tailored to their needs. Embrace the power of the incentive flywheel and unlock the full potential of your go-to-market strategy.
