Latest / The Marketing Funnel Podcast with Fexingo: Awareness, Interest, Decision, and Action Stages / How HubSpot Inverted the Marketing Funnel with Flywheels
Transcript
- Lucas: So back in 2018, HubSpot did something that — at the time — felt a little bit like heresy in the marketing world. They publicly declared that the marketing funnel was dead and replaced it with something they called the flywheel. Luna: And this wasn't just a blog post or a keynote slide. I mean, they actually restructured their entire go to market strategy around it. Lucas: Exactly. And to understand why, you have to look at what the traditional AIDA funnel — Awareness, Interest, Decision, Action — does well and where it breaks. The funnel is basically a leaky bucket. You pour prospects in at the top, and by the time they trickle down to purchase, you've lost most of them. Luna: And the classic problem is that once someone becomes a customer, the funnel essentially drops them. They fall off the bottom. Lucas: Right. So HubSpot's insight was that the real value isn't just acquiring customers — it's keeping them happy enough that they become promoters who bring in new customers. That's the flywheel: a circular system where energy from happy customers powers the next round of acquisition. Luna: And they borrowed the metaphor from physics — a flywheel stores rotational energy. You put in effort to get it spinning, but once it's going, it keeps momentum with less additional force. Lucas: Yes. And the key metric they started tracking was what they called 'customer delight' — which sounds fluffy, but they operationalized it. They measured net promoter score, customer lifetime value, and churn rate. And they tied those numbers directly to the marketing and sales teams' bonuses. Luna: So it wasn't just a rebranding of 'retention marketing.' They actually changed incentives. Lucas: That's the part that a lot of companies skip. You can talk about flywheels all day, but if your sales team is still compensated purely on new logo acquisition and your marketing team is measured on lead volume, nothing changes. HubSpot shifted compensation to include renewal rates and upsell revenue from existing customers. Luna: And that's where their CRM product plays a role, right? Because they could actually track the entire lifecycle. Lucas: Right. HubSpot's CRM was originally a free tool designed to pull people into their ecosystem. But once a customer is in, they start using the marketing hub, sales hub, service hub. The flywheel model says: if you delight them at the service stage, they become a source of referrals and case studies, which feeds back into awareness. Luna: I want to push back a little though. Critics say the flywheel is just a fancy name for what good marketers have always done — focus on retention and word of mouth. Is there really anything new here? Lucas: Fair question. I think the novelty is in the systemization. Before HubSpot, a lot of companies paid lip service to retention, but their org charts and budgets still reflected a funnel mindset. HubSpot actually reorganized their teams around the flywheel stages — attract, engage, delight — instead of the old top of funnel, middle of funnel, bottom of funnel silos. Luna: So they made it structural. That's a big bet. Lucas: It was. And the results are worth looking at. Between 2018 and 2023, HubSpot's revenue grew from about $500 million to over $2 billion. Their customer count more than doubled. And their net revenue retention — the percentage of revenue retained from existing customers including upsells — stayed above 100% for years. That's the flywheel effect in action. Luna: But those numbers also reflect a booming SaaS market overall. How do we isolate the flywheel's impact? Lucas: That's the hard part. HubSpot themselves point to their own net promoter score. In 2019, they reported an NPS of 70, which is considered excellent — especially for a B2B software company. And they attribute that to the flywheel forcing them to invest in customer success and community. Luna: They also built a massive content engine — HubSpot Academy, blogs, templates — that feeds the attract stage. That content isn't just for prospects; a lot of it is designed to help existing customers get more value, which increases loyalty. Lucas: And that's a key distinction from the funnel. In a funnel, content is usually optimized to convert leads. In a flywheel, content is optimized to educate and empower at every stage, including post-purchase. HubSpot's blog gets something like 7 million visits a month, and a significant chunk comes from existing users looking for tips. Luna: So the flywheel blurs the line between marketing, sales, and service. Which sounds great in theory, but it requires a lot of cross-functional coordination. Lucas: It does. And not every company can pull it off. But HubSpot's playbook has been widely adopted in the SaaS world. Companies like Salesforce and Zendesk have their own versions. Even some direct to consumer brands have adopted flywheel thinking. Luna: I think the most practical takeaway for our listeners — who may not be running a billion-dollar CRM company — is the idea of measuring customer delight and tying it to growth. You don't need the whole flywheel framework. Just ask: are your happiest customers bringing in new business? Lucas: And if the answer is no, you've got a leak somewhere. That's where the flywheel thinking helps you diagnose. You look at friction points — maybe your onboarding is clunky, maybe your support team is understaffed, maybe your product isn't solving the problem you promised. Luna: HubSpot famously uses 'friction surveys' — they ask customers where they got stuck. And they track those responses back to specific teams. Lucas: It's a closed loop. And that's really what separates the flywheel from the funnel. The funnel is a one-way street. The flywheel is a system with feedback loops. You fix a friction point, and the whole wheel spins faster. Luna: Alright, but let's be honest — flywheel has become a bit of a buzzword. I've seen it used to describe everything from loyalty programs to email drip campaigns. Lucas: Oh, absolutely. Anytime a concept gets this much attention, it gets diluted. But I think the core insight is durable: growth compounds when you invest in existing customers. That's not a buzzword — that's just good business. Luna: And speaking of durable, we should mention that these episodes — like this one — are only possible because of listeners who find value in them and choose to support the show. Lucas: Yeah, it's a small thing but it makes a real difference. A couple of dollars a month is genuinely what keeps these going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: No pressure ever. Just — if you're the kind of person who appreciates ad-free, focused content, that's the way to keep it coming. Lucas: So back to the flywheel. One thing I didn't mention is that HubSpot actually published a book about it — 'The Flywheel Effect' — and they gave away thousands of copies. That's marketing as education, not interruption. Luna: Which is exactly the flywheel in action: delighting potential customers with free value before they even enter your CRM. Lucas: Exactly. And it's a reminder that the best marketing strategies often feel less like selling and more like helping. That's the thread that runs through all of this — from AIDA to flywheel and beyond.