Flywheel explained with Jon Dick - Inbound After Hours podcast

INBOUND 18 proved to be a memorable event in Boston this year. Not only for everyone in attendance with some brilliant keynotes and speeches, but also for Digital 22 as well.

In this episode of the Inbound After Hours podcast, Mark and Paul were fortunate enough to sit down with the Vice President of Marketing at HubSpot, Jon Dick. Following the official announcement at INBOUND 18 that the marketing funnel is no more, we were given an easy-to-follow breakdown of the new introduction, the marketing Flywheel.

There's also a discussion about Jon's time doing improv in Chicago, his time in Oxford, the importance of a strong company culture and so much more.

To clear up any confusion following the big announcement on how the concept works, check out the podcast below to understand what the new Flywheel is all about.

Watch...

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Full transcript:

- Okay, yep.

- Cheers. Cheers yeah.

- Cheers.

- Good to see you guys.

- Hi everyone, welcome to Inbound After Hours, we're here at the Inbound Conference, over in Boston, Inbound 18. I've just been looking up to see a gentleman on stage called Jon Dick, and we have him with us today. Thanks Jon for coming straight after your talk. Full audience, really, that's swell.

- Thank you, yeah, I thought it went great. I appreciate you guys being there and joining for it. You were friendly faces in the audience, you were a plant (clapping) applauding loudly when no one else would.

- It was great, it was great. So can you tell people a little bit more about you, Jon, and how you (mumbles).

- Yeah, sure. So, I'm VP of marketing at HubSpot, and I'm basically focused on most of the aspects of marketing related to working with a market. So, you know, once someone signs up for HubSpot, what happens next in terms of how I communicate with them. And I've been at HubSpot for about two years. Before that, I was actually at a men's retailer in the U.S. called Trunk Club. Trunk Club hasn't expanded outside of the U.S., but it is a personalised styling service. Clothing in a box. It's for men who like to look great but hate to shop. So I spent many years there being paid primarily in nice clothing. I've got a great wardrobe. It works really well, working in tech, to have such a great wardrobe. And before that I was in San Francisco, and I worked for a company called Clout. Do you remember Clout, Clout store? So, for years we measured how popular everyone on the internet was, and we ranked everyone. And as you can imagine, that was a really powerful go-to market tool. People really care about how they're perceived and how popular they are. So, early days to influence their marketing and it was really fun to be a part of it. It was a really special company.

- Okay, we're now at two years at HubSpot. I'd like to ask some questions about what we've been learning over the last year. We've been privy to have a sneak preview of what's been going on today, which is great. Your talk talked about conversation a lot, so I'd like to touch on that. So the question is, how has (mumbles) changed over the last few years?

- It's changed a lot, I think. A couple things that really stand out to me. First of all, our latest data shows that more or less 60% of the buyer process is completed before anyone ever contacts you. We're seeing, we've had a, you know, a very large increase in self-service purchases since we enable people to buy self-serve. People are doing a lot more research on their own. They're trusting salespeople less, they're trusting your process less. In fact, they don't care about your process anymore, and if you're putting a lot of your process steps in the way of people easily doing business with you, you're probably slowing your own growth down.The buyer journey's changed a lot in that regard. Buyers have more access to information, they're more willing to research it on their own, they want to communicate on their channels, on their time, around what they want, and anyone who tries to force them back into their process is kind of stuck in the stone age.

- I agree. Now, what can companies do so we can increase conversions, customer (mumbles)? I know you gave us some great tips there. What tools of HubSpot can help with that?

- So, I mean, I think the tool that HubSpot has recently released that probably is the most valuable at engaging people and driving conversions, and kind of modern buyer journeys is our conversations tool. Conversations is part live chat, part bot builder, part shared inbox for each team to be able to communicate across multiple channels, mostly with customers. And, you know, my general attitude on chat is that, you know, if you're doing all this work. It's the most natural part of Inbound. You're doing all this work to attract people to your website, then you just need to give them really easy ways to engage with you, to learn more about you. My feeling there is that we are gonna really continue to see a real rise in chat, engagement with bots. I wouldn't be shocked if five years from now,instead of homepages where people navigate on their own it's kind of just a bot. Yeah, you know. They can kind of choose their own journey. So that's probably the tool that is most helpful right now for partners who are trying to drive the conversions in the modern market.

- There's been talk about AI, and it was more about where AI is. They did a straw poll in the room of, if you're being honest, who feels a little bit threatened by AI, and a lot of hands went up.

- Lot of hands went up.

- And he went through a lot of stats. The one that stuck in my mind was 80% of what we do will be assisted by AI. He went through a lot of stuff that already is.

- Yeah.

- An interesting bot (mumbles) was Google's, you know, when you go on Gmail, three suggested replies.

- Yeah.

- So (mumbles). Next step will be predicting (mumbles).

- I think the future is bright in this regard. I worry less about all our jobs being taken away, and I think instead we're far more likely to, you know, have better lives, be able to accomplish more in less time, focus on the aspects of marketing that are really the most interesting, which is the strategy, the storytelling, and how to create great experiences. Those are the things that an AI can't replicate. They can power, but they can't replicate.

- They can give you the data quicker. They can (mumbles).

- Yeah. If I can get AI that would write all my emails and I could just go to the beach, that'd be pretty sweet.

- Can't wait for that day. Save a lot of time.

- Yeah.

- One of the slides, I took a picture of it, that I thought was great, one of the experiments HubSpot did, was where you have your contact info on the page, you have the book meeting, you have the chat bot, and currently a 140% increase in conversions just by adding that.

- 190%.

- 190%?

- Yeah. Generally speaking, people want options. I think that is the one thing we've learned a lot about in our market over the past two years. People want options in how they communicate, when they communicate, what they want to accomplish. Almost every time we've created more options for people, we've driven higher engagement. So the experiment you're referring to is a change we made to our contact sales page. Used to be, first of all, it's literally like the highest page that can exist. Right It's like, I want to talk to a person on your sales team who can sell me something. And it used to be a form. We asked them for a ridiculous number of form fields to be filled out, I mean, auto send an email to a rep and the rep would reply and say "Oh, hey, you want to set up a meeting?" and that person would reply and say "Oh yeah, here's some times that work for me," and the rep would reply "Oh, I can't do those times, how about these times?" and a week and a half later, that conversation would die. So what we did was, we added, we basically created a book a meeting module so that people could directly just book with a rep for the time that works for them. We added a chat module that people could directly engage right now, if they wanted to, and we added a phone number to the page. And what we see is that about 50% of people actually book meetings, 30% are, 30% are calling and 20% are chatting, and on the whole, we drove about 200% more engagements that way. People like options, and you need to give them those options. You need to make it really seamless for them.

- I think it's fascinating how some of the stats, 75% of businesses don't have a contact number on the service page. That was fascinating.

- Yeah, yeah.

- And is it something like 30% of businesses are only using chat?

- Yeah, so the two stats, it was 75% of businesses do have a phone number, but 25% don't, which is crazy! Literally, like, if I want to buy something from you, and I just need to ask you a question, can I not call you on the phone right now? So 25% don't have phone numbers and then 60% don't have chat, which is insane. And then within the groups that have chat, the 40% that have chat, you know, only 40% of those companies are actually trying to monetize it. The rest are just using it for FAQs and customer service. They're not building it in. It's just the modern way that people want to interact and engage. You're not using it as a way to automate the customer experience. And, you know, I think if anything, this is kind of an aside, but I think a lot of, I think a lot of people are thinking about automation as the way to make their employees more efficient or effective. Brian's gonna talk about this a bit today. But I think the future is really about trying to automate so the customers can be more efficient. Right? Here's a crazy stat. We put bots live on some of our pages on HubSpot.com, and we get more people engaging with the bots than with the humans. Like, we're driving way more chats, and more people actually want to eventually talk to a human. But it is less threatening to them to engage with a bot right out of the gate, and they think they might be able to get something done more efficiently that way.

- That came up at the book meeting. Steven from HubSpot, Steven gave a talk on bots.

- He did, he gave a great talk on bots, yeah. You mentioned the FAQs during our conversation (mumbles) about knowledge base. Can you explain a little more about the knowledge base functionality?

- Yeah, absolutely. So, we have kind of found, number one, that a lot of companies did not invest in knowledge base, and I think that, as marketers, we have to really embrace the idea of customer delight is one of the main ways that they grow. A great way to do that is to leverage the skills that they already have as content creators, as publishers, as distributors of content. Publish the most important stuff to the internet, for their customers. So, our service hub has that as one of its main features, and, you know, it's built on the same software as the HubSpot CMS, the website. So it's just very easy to create that content, publish that content, just like writing blog posts. And every marketer, I think, should basically be building every week to create some more knowledge base articles, keep building that out so there's a great set of content. Like, if you have a question about product views, or a company you work with, like, what do you do first? (mumbles) Go to Google.

- And this is great, chat bot. It'll answer your on-screen questions. And knowledge base, what's out there.

- Yep, that's the dream. Set it all up. I'm sure it'll be like that.

- You got any more questions, Paul? I've got loads of them, I want to give you the opportunity.

- Yeah, we had, I want to talk about background and speak to someone like yourself. And we're interested in looking at your academic background. You studied the opposite.

- I did, don't hate me for it.

- So I was just interested in not only that, but the academic work.

- Yeah, so I wasn't a particularly strong math student for many years in high school. And then I took calculus, and I just got calculus. It was kind of weird. I was just like, oh yeah, that makes sense, I get it. And that doesn't happen to most people, I don't think. Most people hit calculus and it's like a (mumbles), but I was kind of that way with geometry. But calculus made sense, so, I really kind of fell in love with physics. I liked the connection to math, to science, and the way the world worked, and I found that all really interesting. So this was in high school, yeah.

- Where was that?

- Oh, in Massachusetts, outside of Boston. So I grew up outside of Boston. I went to public school, and it was great. It was a great school, a lot of fun. But I fell in love with physics, and so I decided to study physics. I thought it would be an interesting path. I thought maybe I'd be a physicist, and it turned out I was pretty good at it, so I got this great fellowship my senior year of university to go to Oxford to study, and so off I went to Oxford, but a couple things happened at Oxford. Number one,  I realised that, if I wanted to be a physicist, I would never talk to any humans ever again. I kind of like talking to people.

- That's like the bots.

- And so I realised maybe being a physicist wasn't the right path. The other thing that happened was that I kind of spent most of my time when I was at Oxford working on this improv troupe called the Oxford Imps. I founded the Oxford Imps was this woman who was based in Oxford. I'd kind of fallen in love with improv comedy when I was at the University of Massachusetts. So I kind of look back at my year studying at one of the most prestigious universities in the world studying physics, and I kind of was like, man, I didn't really like physics and I really liked the improv. So that actually helped me to decide to move to Chicago and spent about six years living in Chicago and studying improv and performing. I was in a couple of groups that were pretty successful.

- You still do it?

- No, I retired.

- I've got some questions on that. So I see here, I have a question about you being on the stage today, and you appear so comfortable on stage, pretty confident. Is that through the grounding on, being heckled on stage during the early days?

- Yeah, you know, I think some of it probably comes from my last name, if I was being totally honest. You have to learn at an early age, when your last name is Dick, how to just laugh at yourself and how to not feel any sense of embarrassment. I think you learn pretty early that, if you can laugh at yourself, you're gonna be much happier in the world.

- People can't laugh at you then.

- Not if you laugh at yourself.

- Well, yeah, people would laugh at me and I would just laugh with them, and that was a pretty good and desirable tactic, and it created a real love of laughter in me, and it also created this stance where I don't worry very often what people are gonna think about my presentation style, 'cause if something goes wrong or if something doesn't land, I will just, I'll laugh at it and move on.

- Have you had training in this, or does it just naturally come with experience over the years?

- So, I studied a lot of improv in Chicago. There's a lot of schools out there. There's a theatre called the IO, formerly Improv Olympic, I did classes there. I did classes at the Annoyance Theatre, I did shows at Second City. So you get exposure to a lot of great, that's why a lot of people go to Chicago for improv is because the best teachers are there. So there's some formal training involved, but the rules of improv are just the rules of life. The rules of improv are, number one, yes and. So like if someone on stage, if you're improvising a scene with someone on stage, the way to make that scene great is to just say yes to whatever they say and add something to it as opposed to saying no. So if you come up to me and are like "Hey, take the football" and I said "That's not a football, that's a loaf of bread," that's kind of a boring scene.

- If you keep saying yes (mumbles).

- Yeah, so yes and, support your teammates, those are kind of the--

- I never thought about that, it's the message of teamwork. (mumbles).

- Yep.

- (mumbles) And so, perhaps, some other (mumbles) improve the team relationships. Where would you start? (mumbles) What's the first thing you can do?

- Um, well, I think, number one, I think that everyone who's a manager should be spending a lot of time thinking about how they build great teams, and I think there's a lot of aspects of it. Some of the things that really stand out to me around team building, number one, you need shared goals, a shared purpose. I found that the teams that I have enjoyed the most are teams that kind of, like, go into war together. You're going in, you've got some really big, audacious goals and you all work hard together to pull it off. Being sure people know how to contribute is really important. I personally think that laughter is probably one of the most important aspects of building a great team culture is just, you know, laughing a lot, not being all business all the time I think is pretty key. Yeah.

- (mumbles) We're growing now, yeah. (mumbles) So we're investing a lot on team training, especially culture. We're at that stage where we have to define our culture. As soon as you reach that 20 mark.

- You really do. You've got to define it, and you have got to live it. I feel like, you know, I feel like I've come across a lot of companies who have a set of values on the wall that they don't actually live it. It's like, every company will say oh, our people are our most important asset, we want to invest the most in them. And then you're like, well, how much do you spend on your people? Do you allow them to get education? Do you buy them the supplies they need to do their job? Or are you always, you know, squeezing them? And a shocking number of companies don't invest, so what they say and what they do are not always aligned.

- So we're looking at seven people this year, so that's (mumbles).

- That's nice.

- (mumbles)

- That's wonderful.

- We were chatting about coming up with ideas of things on that train of thought. It'd be nice to (mumbles). So we thought maybe going out to Dublin. (mumbles) That's sort of the same effect.

- Totally, totally. Shared experience is how you build friends, you know? So the more you can create shared experiences and opportunities for people to, you know, be together and laugh, the more successful you'll be there.

- And it doesn't have to cost thousands.

- Yeah, exactly.

- Yeah, we took (mumbles) Inbound last year, and they said one of their tactics was, they we called it Barbecues and Beer, and that keeps companies together. It's so cheap. (mumbles)

- Our (mumbles) needs to say teams who drink together, work better together. Drink more than us. (laughter)

- That'd be tough.

- Yeah (laughs).

- What are your plans for the future, personally?

- Personally? Well, I'm having a very, very fun time working at HubSpot. I love the team I work on. I love the, the folks who work on the stuff that I'm working on and the folks that work on the other stuff in marketing. I work for Kipp Bodnar, and I love working for Kipp. So I'm very happy at HubSpot. My plans for the future, honestly, are to really help continue this transformation of our go to market. I think that, you know, we are at this point as an industry where, I think the easier you can make it for someone to learn about your company, get value from your company, and buy for your company, the more successful business is gonna be. And so, you know, I have a lot of partners on our product team and our sales team that are working with me to really try and continue transforming HubSpot's go to market to be kind of the model of what a modern Inbound business looks like. That's really what I'm excited about. I just started learning how to sail. I have a dream of maybe chartering a sailboat someday.

- A true Oxford man.

- Well, you know, I'd have to be a rower to be an Oxford man. My abs are not strong enough for that.

- What's the (mumbles)? Some stuff today, where do you go from here?

- You know, obviously, I can't disclose exactly where we're going on that stuff. I think you're gonna continue to see a lot of product ship from us, and I think that we, I think our chief product officer, Christopher O'Donnell, is, I think he's got his head in all of the right spots in terms of how we need to invest. I think we have a real desire to, you know, we've now what we call completed the sweep, you know, and so we went from having a full marketing stack, a little bit of sales, a little bit of services, now it's full marketing, full sales, full service, powered by the CRM. I think we kind of think that all of those areas need continued investment to be great. I think we want to learn fast from what HubSpot is learning in terms of our go to market, enable other growth leader to do that with their companies.

- So, we had a webinar a couple weeks ago about what we discussed this afternoon and (mumbles), and so, we've got blog training to (mumbles) but we try to explain to the buyers back in the office sort of what this means, what it feels like. A lot of the tools were already there, but in a small format, and now it's, we've organised them now, they're ready.

- It's connecting the dots.

- Yeah.

- It's connecting the dots, I think. I think that having, using a platform that can integrate all the software you use in a really consistent and easy way is kind of a key to the future. I think at HubSpot we think that HubSpot could be that platform. I think you're gonna continue to see a lot of platform investment from us, not just in the name of people to use our software better but to use other softwares a lot better. We hit a big milestone with our 200th connect partner in August, and that was a big deal for us.

- (mumbles)

- Yeah, so, I think that's a lot of where you'll see us invest. I think, you know, we want to help companies implement the flywheel. We want to help them care about customers, we want to help them make the customer experience great, want to help them feed their future growth from customers.

- [Paul] I mean, (mumbles) talk about everything Brian used to do on the white board was the funnel, and now he's all about the flywheel. Do you want to elaborate on what's changed there, explain to the viewers what the flywheel is?

- Sure. Well, if you go to ourflywheel.com, you can see a whole long blog post by me about, number one, how disgruntled I was when Brian first introduced the concept of the flywheel. So I had two initial reactions. Number one is like, oh come on, I've heard this before. Circular buying process, okay, yeah, great. It's like, a really tough tool to actually use tactically in your business. And number two, like, everything I do is aligned around the funnel. Am I just doing this because we're looking for some new, buzzy, you know, catchword? So I was like, me and the funnel, we're tight! My team's named the Funnel Team at HubSpot. I'm like I'm gonna have to change my team name, I got to get a new metaphor, I have to change the tattoo on my arm, there's a lot of things I gotta change. And then I spent a bunch of time, being a physics man, I actually dug into the physics of flywheels, and flywheels are actually amazing devices. The flywheel is literally the thing, so James Watt invented the flywheel in the 1800s. I think he was a Brit, was he a Brit? I think he was a Brit.

- [Paul] I've got Trunk Club, I'll just do another one. (laughter)

- [Jon] No, really, it's a device that when you put energy into it, it stores that energy incredibly well and allows you to access that energy later. It's literally the device that enabled the Industrial Revolution. So, I think what is powerful in that metaphor is a couple things. Number one, the energy in a flywheel, so it's very efficient at storing that energy and releasing that energy. And there's three things that dictate how much energy's in there. The first is how much speed you put into the flywheel. How much you're pushing, how much energy you put into that. And that's like an easy metaphor, I think, for all of us growth leaders to wrap our head around. We're putting forces in the right place to spin the flywheel. The second thing that determines how much energy is in your flywheel is the friction. If you have a lot of friction, it's going to slow your flywheel down and pull energy out of it. So it gives you a really powerful metaphor to look at every point in your customer journey about what friction points are. And what we have found at HubSpot is that friction in a funnel is more or less just the conversion point between, you know, lead to MQL. But in reality, friction, that is one point of friction. But the other point of friction is just like, how many leads do you actually, how many leads do you have in your database and how often do they churn out. Or, take your customers, right? Like, how many new customers do you put in every month versus how many customers do you churn every month? If you're churning a lot of customers every month, that's a big point of friction. That's slowing your flywheel down. The third thing that determines how much energy's in the flywheel is the composition of the flywheel. Bigger, heavier flywheels have more energy in them. So imagine a big, giant rocket trying to get up, so then you get a lot of energy in that. And so the more customers you add, the deeper you can get them using more of your products, the stickier you can make them, the more energy your flywheel has. So those are kind of the three aspects of the flywheel, and that's I think why I've really come around to it as a model for growth. We're starting to really use it to evaluate how we make investments, how we're measuring our success, and all that stuff.

- [Paul] I think that really helps articulate and explain the (mumbles). 'Cause your instinct when you first see it is to think it's still a funnel, but just circular. So that metaphor falls down then when the customer comes back to the input. That's excellent. (mumbles) James Watt was Scottish.

- [Jon] Heck of a guy. His name's on every light bulb. Not bad. I'd be okay with that.

- [Facilitator] We always like to ask this question at the end. What's one tip you'd give to marketers out there to help them grow their business right now? One key tip to help them really function?

- [Jon] I would literally strip out 75% of the internal lead rotation rules that you have. I would go and I would just look at all of the processes you've layered on over the past decade as you've optimised your go to market, and I would just open the floodgates back up, and I would leverage automation to interact with people as opposed to trying to use rules to cut people out.

- [Facilitator] Sounds great. That's something we need (mumbles). (laughter) Thank you so much.

- [Jon] Thank you. Nice to see you, have a good day. Thanks for coming to Inbound.

- [Facilitator] Thank you guys, I hope you enjoyed that. We'll see you at the next Inbound After Hours. Take care. Bye-bye.