Funnels and flywheels are models, simplified pictures of how a business turns strangers into customers. The marketing funnel and the sales funnel describe parts of that journey. The flywheel, popularised as an alternative to the funnel, emphasises what happens after the sale. Each is useful for different decisions, and arguments about which one is right often miss the point. This article explains what each model describes, where they overlap, which metrics belong to each, and how to connect them into a single view of revenue.
The marketing funnel
The marketing funnel describes how people move from not knowing about a company to being ready for a sales conversation or purchase. A common version has stages such as awareness, interest, consideration and intent, or in B2B terms, visitor, lead and marketing qualified lead. It is useful for planning content and campaigns for each stage, understanding where prospects drop out before talking to sales, and setting marketing targets. Its limitation is that it ends at the handoff to sales, so it says little about whether marketing produces customers.
The sales funnel
The sales funnel, often called the pipeline, describes how qualified prospects become customers: sales qualified lead, opportunity, proposal, negotiation and closed won or lost. It is useful for forecasting, coaching, finding where deals stall and planning sales capacity. Its limitation is the mirror image of the marketing funnel: it starts when a lead is already qualified, so it does not show where those leads came from or how they were created. Many companies have well-run marketing and sales funnels that are measured separately and never quite connect.
The flywheel
The flywheel model puts the customer at the centre and describes a cycle rather than a one-way funnel: attracting prospects, engaging them and delighting customers, who then attract more prospects through referrals, reviews and word of mouth, and generate more revenue through renewals and expansion. Its main contribution is to treat customers as a source of growth rather than the end of the process. It is useful for businesses where retention, expansion and referrals drive a large share of growth, such as subscription software and many service businesses.
Comparing the three models
The models answer different questions. Use each for the decisions it suits.
| Marketing funnel | Sales funnel | Flywheel | |
|---|---|---|---|
| Covers | Awareness to qualified lead | Qualified lead to customer | The whole cycle, including after the sale |
| Main owner | Marketing | Sales | Shared, including customer success |
| Key metrics | Traffic, leads, MQLs, cost per lead, lead-to-MQL rate | Opportunities, win rate, cycle length, pipeline coverage | Retention, expansion, referrals, net revenue retention |
| Best for | Campaign and content planning | Forecasting and sales management | Growth strategy where customers drive growth |
| Blind spot | What happens after handoff | Where leads come from | Less precise for stage-by-stage management |
Connecting the funnels
The most practical step is to connect the marketing and sales funnels into one revenue funnel with shared definitions. Agree the stages from first touch to closed deal, define each one, and record them in one CRM so a cohort of leads can be followed all the way to revenue. Then marketing can be measured on qualified pipeline and revenue, not just leads, and sales can see which sources produce the best deals. A written handoff agreement, covering what qualifies a lead, how fast sales responds and what happens to leads sales rejects, holds the connection together. The sales and marketing SLA template on this site provides a starting point.
Adding the flywheel
Once the revenue funnel is connected, add the post-sale stages: onboarded, active, renewed, expanded and referred. Measure retention, expansion and referrals, and feed them back into acquisition: referrals as a lead source, customer stories as marketing content, and expansion opportunities as pipeline. This gives a complete picture of where revenue comes from. In many subscription businesses, revenue from existing customers is a large share of growth, and a model that stops at the first sale misses it.
Choosing the right model for a decision
Use the marketing funnel to plan campaigns and content and to diagnose drop-off before sales. Use the sales funnel to forecast, manage deals and plan sales capacity. Use the flywheel to set growth strategy, decide investment in customer success and referral programmes, and explain to leadership how retention and acquisition reinforce each other. Use the connected revenue funnel for targets and reporting that marketing, sales and finance all trust.
Common mistakes
Measuring marketing only on top-of-funnel metrics such as leads, with no link to revenue. Running the sales funnel without knowing lead sources. Adopting flywheel language without measuring retention, expansion or referrals. And arguing about which model is correct rather than agreeing shared definitions. The model matters less than having one connected set of stages that every team uses.
Making the connected model work day to day
A connected model needs a few routines to stay connected. Hold a monthly revenue review attended by marketing, sales and customer success, using one report that follows cohorts from first touch through to renewal and expansion. Agree who owns each stage and each handoff, including the handoff from sales to customer success after the deal closes, which is often as leaky as the marketing-to-sales handoff. Feed what each team learns back to the others: lost deal reasons to marketing, common onboarding problems to sales, and customer success stories to marketing as content and referral opportunities. Over time, this turns the funnel and flywheel from diagrams into a shared operating rhythm, which is where their real value lies.
A worked example of the connected view
Consider a B2B software company. Its marketing funnel shows website visitors, leads and MQLs by channel. Its sales funnel shows SQLs, opportunities, proposals and wins. Its customer success team tracks onboarding, usage and renewals. Measured separately, each team looks reasonable: marketing hits its MQL target, sales hits its win rate, customer success reports good satisfaction. Connected, the picture changes. Following a cohort of leads from first touch shows that one channel produces many MQLs but few wins, and that customers from another channel renew and expand far more often. The company shifts marketing budget towards the channel that produces customers who stay and grow, asks customer success to feed expansion opportunities into the pipeline, and starts a referral programme with its happiest customers. None of these decisions was visible from any single funnel. That is the practical case for connecting them.
Where each model fits in reporting
In reporting terms, the three models map onto different reviews. The marketing funnel belongs in the weekly marketing review: traffic, leads, MQLs and cost per lead by channel. The sales funnel belongs in the weekly pipeline and forecast review: opportunities by stage, win rates and cycle length. The flywheel belongs in the monthly or quarterly business review: retention, expansion, referrals and net revenue retention alongside new customer acquisition. The connected revenue funnel ties them together in the monthly leadership report, following cohorts from first touch to revenue and renewal. Keeping each view in the meeting where its decisions are made avoids overloading any single report while still giving leadership the full picture.
FAQ
The marketing funnel covers awareness to qualified lead. The sales funnel covers qualified lead to customer. Connected, they form one revenue funnel.
A model that treats customers as a source of growth, through retention, expansion, referrals and word of mouth, rather than the end of a one-way funnel.
No. They answer different questions. Funnels are useful for stage-by-stage management and forecasting; the flywheel highlights growth from existing customers.
Agree shared stage definitions, record them in one CRM, follow cohorts from first touch to revenue and use a written handoff agreement between teams.
Retention, expansion revenue, referrals, customer satisfaction and net revenue retention, alongside acquisition metrics.
Often RevOps, or the senior revenue leader, with marketing, sales and customer success each owning their stages and handoffs.
Yes. Even a small company can track retention, referrals and expansion and feed them back into acquisition. The model scales down well.
No. Any business where repeat purchases, referrals or reviews drive growth benefits, including services and D2C brands.
Not necessarily. MQLs remain a useful early signal for marketing, but report them alongside qualified pipeline and revenue so they are not the only measure of success.
Treat referrals as a lead source in the revenue funnel, track their conversion and value, and credit them back to the customer and the team that earned them.