Imagine an egg just sitting there. No one pays it much attention until one day, the egg cracks open and out jumps a chicken! All the major magazines and newspapers jump on the event, writing feature stories “The Transformation of an Egg to A Chicken!” “The Remarkable Revolution of the Egg!” “The Stunning Turnaround of an Egg!”—as if the egg had undergone some overnight metamorphosis, radically altering itself into a chicken. But what does it look like from the chicken’s point of view? It’s a completely different story. While the world ignored this dormant egg, the chicken was evolving, growing, developing, incubating. From the chicken’s point of view, cracking the egg is simply one more step in a long chain of steps leading up to that moment—a big step, surely, but hardly the radical, single-step transformation it looks like to those watching from outside the egg.
A business is set up to create value and deliver revenue in a sustainable and Profitable manner.
– Create value (What the customer want)
– Deliver revenue (Customers will pay for it)
– Sustainable and profitable manner (Does profit in its operation and create a competitive advantage around the product).
A flywheel is a self-reinforcing loop made up of a few key initiatives. Those initiatives feed and are in turn driven by each other and build a long-term profitable business.
For a Retail Pharmacy: Proper branding feeds into attracting customers, good customer service brings repeat customers, creating a flywheel around customer services [subscription models, home delivery, health education, creating a group] influences word of mouth growth which in turn leads to more customers which exposes them to good customer service.
Feeding any part of the flywheel accelerates the loop and leads to improvement.
For a Software Company (Opay): A payment platform offering bike hailing service to drive visibility and introduces customers to the payment platform and brand, driving downloads to the App, offering more services like Ofood, Owealth e.t.c driving more engagement, the addition of any product to the platform increases customer’s satisfaction leading to increased value leading to word of mouth growth. Any single addition to the platform or quality of service increases the total brand value.
Note: Prior to now, most businesses depend on the funnel model, using strategy and growth hacks to acquire customers and after buying, nothing more.
With the flywheel model, the business creates high value in terms of products and customer services, then the momentum of satisfied customers drive referrals and repeat sales.
Thinking of our business through the lens of flywheels in business model will cause an utter change in how we think about our customers and our business growth.
Happy customers are flywheels. Amazon’s model of total customer satisfaction have led them to different verticals to serve their customers, build up flywheels that keep their customers, which in turn help their customer become brand loyalists spreading their news and grow their valuation
Ps: I have a small offer, Share this post with at least 3 people or on your social media page. I’ll schedule a free 30mins call to discuss on how you can build a flywheel for your small business/startup. We are growing in 2020. Email: email@example.com
How do you get the flywheel to spin?
- Pick the right direction early: Flywheels are utilized by carefully understanding metrics that drive profitability, picking the direction in the business that when improved upon, will lead to an ultimate increase in customer satisfaction, value and spread of word of mouth.
- Focus Efforts: When focusing on flywheels, it’s easy to get derailed as initial profitability might be sacrificed to get the flywheels spinning. In many cases, at the onset, there is no movement – many people think that the strategy is absurd – it is almost impossible to imagine the flywheel at speed. But when it does, the business grows at amazing speed.
- Customer Focus: The best flywheel is built around the customer – intense focus on customer satisfaction. Sales, marketing and service to create value for customers, while incentivizing word of mouth growth.
A small offer in exchange for value, Share this post with 3 people or on your social media page. I’ll schedule a free 30mins call to discuss how you can build a flywheel for your small business/startup. We are growing 2020. Email: firstname.lastname@example.org
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Create Flywheels; Use them.