Flywheel Model
A business growth model where satisfied customers fuel acquisition through referrals and advocacy, creating self-sustaining momentum.
Definition
The flywheel model replaces the traditional marketing funnel with a circular system where customer success drives growth. Happy customers become advocates who attract new customers, who become happy customers—creating perpetual momentum.
Unlike the funnel which treats customers as outputs, the flywheel positions them as the force driving growth. Energy invested in customer experience compounds over time rather than requiring constant new input.
Why It Matters
Flywheels reward long-term thinking. While funnels focus on acquisition costs, flywheels measure momentum—how effectively customer success creates new customers without proportional spending.
In subscription businesses especially, the flywheel model aligns teams around retention and expansion rather than just acquisition, recognizing that existing customers often generate more value than new ones.
Examples in Practice
Amazon's flywheel: lower prices attract customers, more customers attract sellers, more sellers create selection, selection attracts customers, volume lowers costs enabling lower prices—the loop accelerates.
A SaaS company shifts focus from lead generation to customer success. Referral revenue grows from 10% to 40% of new business over two years while CAC drops by half.