Flip the Funnel: How to Use Existing Customers to Gain New Ones

THE DEATH OF LOYALTY

Before we get into the flipped-funnel methodology, it’s important to tackle—and possibly debunk—one of the most misused and even abused words in the marketing lexicon: loyalty. It’s a word that is liberally thrown around to refer to customers. It’s wholly interchangeable with a random impersonal e-mail that doesn’t even mention the customer by name, an indulgent and overpriced techmology (hat tip to Ali G) and database solution, or a frequent-purchase program that penalizes returning customers at every turn, such that they are helpless to use their miles or points with any reasonable ease. All of this drives them to the point at which they end up expiring, along with the customer’s tenure and so-called loyalty. Talk about a vicious circle!

It’s time for renewed thinking on loyalty. It’s best to begin with a clean slate—one without any sacred cows, predisposed thinking, or incumbent assumptions.

Consulting firm McKinsey & Company offers thinking on the customer journey, and seems to have blended the acquisition and retention processes together as fluid and circular. McKinsey segments loyalty into active and passive, as in “I’ll never purchase any product other than yours” versus “I’m open to purchasing yours in the future, and I’m equally open to purchasing other, similar products as well,” respectively.

The diagram of McKinsey’s consumer-decision-journey theory in Figure 6.3 sheds some light on four current market truisms when it comes to loyalty:

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