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 customer growth number could be as high as 200% or more for acquiring customers via eCommerce.
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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. This builds 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. This results in them spending more with you—in other words, more customer growth.
It can also cause them evangelize for your brand. Have your customers indirectly recruit new customers for you through referrals? What could be better?
To better understand this, let’s take a flywheel model and see how it can help customer growth among your top-tier customers. Through this, we can 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.
There’s an inner “ring” that focuses on the three key phases of the customer experience (Attract, Engage, Grow).
Then there’s 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.
This is because 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.
The goal is to pull 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.
Specifically, you can introduce exciting program rewards. Examples include 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. For instance, the promotion of gamified elements, personalized messaging, or the promise of a substantial reward.
Engage:
So, you’ve attracted customers and begun cultivating that captive audience. Now it’s essential to keep them engaged.
Community-based program elements like leaderboards and closed-loop social apps are one solution. These 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 are others. They ensure that your customers are intrinsically motivated. This motivation helps them push forward towards their objectives.
Finally, we have short-term recognition and promotions. These tools 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 customer 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. These 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. You can also 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. These help provide profiles of your most high-value targets in your existing market, or even new markets.
Finally, consider adding 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.
Some examples would be customer recognition events or end-of-the-year incentive trips. These sorts of memorable experiences put a bow on the entire customer journey.
They also give your customers another reason to speak highly of your brand beyond their everyday interactions with it.
Building the Flywheel For Customer Growth
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:
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How much are you spending on marketing to new customers vs. existing customers?
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How much are you spending on marketing to big customers vs. your middle 60%? Do you have a different approach for each group?
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Do you have a way to quantify the value you’re extracting from existing customers beyond their initial purchase?
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Do you understand the reasons behind why your customers continue to purchase from you? Have you ever asked them?
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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. Focus on the stickiest forms of marketing for each segment. Then 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. These chunks should be 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
An investment in an incentive program unlocks a wealth of benefits beyond its immediate purpose. Like 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.
All it takes is integrating an incentive program into your go-to-market strategy. Through this, you can elevate customer engagement, foster loyalty, and drive customer growth.
Remember, the key lies in attracting, engaging, and helping your customers grow. You can do this, 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.
