Joshua D'Costa
Growth & Marketing
May 27, 2025
|
7
min
Traditional marketing and sales funnels treat customers as an end point—once acquired, momentum stalls and leads leak at every stage. The flywheel model, popularized by HubSpot, instead stores and releases energy through three interconnected phases: Attract, Engage, and Delight, using customer success as the fuel for ongoing growth
In a subscription context, each phase compounds recurring revenue: happy subscribers advocate for your product, feeding fresh sign-ups that spin the wheel faster.
In this post, we’ll dive into why subscription models and the flywheel approach are a natural pairing for SaaS businesses, and we’ll walk you through a practical roadmap to implement your own subscription flywheel—complete with pricing strategies, automation tools, and engagement tactics that turn satisfied customers into your most powerful growth engine
What Is the Flywheel?
At its core, the flywheel is an energy-efficient wheel invented by James Watt over two centuries ago to power steam engines; its ability to store kinetic energy depends on how fast it spins, the resistance it encounters, and its size and mass
HubSpot borrowed this mechanical concept to describe a business growth model, centred on delivering exceptional customer experiences that generate self-reinforcing momentum.
The flywheel framework views customers as ongoing energy sources: they renew their subscriptions, provide upsells, and refer peers, continuously feeding back into your growth engine.
Source: Newbreedrevenue
Three factors determine your flywheel’s force:
Strategies like freemium offerings, content marketing, and referral schemes, add rotational force to the wheel, speeding up customer acquisition and activation.
Any obstacle, poor cross-team communication, convoluted pricing, or clunky onboarding, slows the wheel’s spin; identifying and removing these bottlenecks is critical to maintaining momentum
A larger wheel (e.g., a broader product offering or bigger customer base) stores more energy, making it easier to sustain high-speed growth with smaller pushes over time
By focusing on high-impact “pushes” where they matter most and systematically eliminating friction, companies keep their flywheels spinning faster and longer, turning customer successes into a virtuous cycle of repeat revenue and referrals.
This principle of harnessing ongoing customer energy to fuel growth explains why subscription models are a perfect fit for the flywheel approach.
Why Subscription Models Win
Predictable Revenue & Market Growth
Subscriptions transform sales spikes into steady cash flow you can forecast weeks or months in advance. The global subscription billing management market is expected to reach $17.95 billion by 2030, growing at a 16.9 % CAGR from 2025 to 2030
Meanwhile, Research and Markets predicts the broader Subscription Economy will hit $996 billion in transactions by 2028
Higher Customer Lifetime Value
Subscription customers tend to stay longer and spend more over time. Industry benchmarks show a healthy LTV: CAC ratio for SaaS is 3:1 or higher, meaning the lifetime revenue from a customer should be at least three times the cost to acquire them
Lower Customer Acquisition Cost
Focusing on retention and advocacy within a subscription flywheel reduces reliance on costly ads and outbound tactics. Each renewal or upsell funds future marketing, decreasing your effective CAC as the business scales.
Better Customer Engagement
When your revenue depends on renewals, product teams prioritize ongoing value delivery driving features, support, and community that keep customers invested and ready to refer peers.
5 Strategies to Implement a Subscription Flywheel Easily
Choose the Right Pricing Structure
Different customers value your product in unique ways. Flat-rate plans work if your feature set and usage are consistent, while tiered pricing lets you offer basic and premium bundles side by side. Per-user pricing scales neatly for team tools, and usage-based pricing (pay-as-you-go) aligns directly with customer consumption
Action Steps:
A/B test two pricing pages simultaneously to see which model converts better within 2–4 weeks.
Survey existing customers about feature importance to inform tier boundaries.
Revisit pricing every quarter and adjust based on usage patterns and churn signals.
Automate Billing & Payments
Manual invoicing and ad-hoc payments introduce errors and failed charges. A subscription management platform handles recurring billing dunning (retry logic for failed cards), tax calculations across jurisdictions, and revenue recognition compliantly
Action Steps:
Integrate a single billing SDK or API to cover all plans and geographies.
Configure automated email reminders for expiring cards and upcoming renewals.
Enable detailed invoice PDFs and tax reporting exports for accounting.
Build a Seamless Onboarding Experience
Your goal is to drive users from sign-up to “aha moment” with minimal friction. Map each step, account creation, product tour, first key action, and automate follow-ups (welcome emails, in-app tooltips, milestone nudges) to keep customers on track
Action Steps:
Create a personalized welcome email series that triggers based on initial activity (e.g., first feature use).
Embed an interactive walkthrough in the app to guide new users through core functionality.
Offer live chat support or a help widget on critical pages to resolve blockers immediately.
Measure Flywheel Metrics
Without data, you’re flying blind. Focus on:
MRR Growth: Net new MRR minus churn and downgrades.
Churn Rate: Percentage of monthly customers leaving.
LTV: CAC Ratio: Lifetime customer value divided by the cost to acquire them.
Expansion MRR: Upsells and add-ons in existing accounts.
NPS (Net Promoter Score): Gauges customer advocacy
Use tools like Mixpanel or Amplitude to segment cohorts and a CRM dashboard to visualize trends.
Action Steps:
Build a weekly report that flags if any metric deviates more than 10% from targets.
Run quarterly cohort analyses to identify top-performing channels and friction points.
A/B test changes (e.g., pricing tweak or onboarding flow) and track impact on these metrics.
Foster a Customer-First Culture
The flywheel only spins if every team contributes to customer success. Hold “flywheel health” meetings that bring marketing, sales, product, and support together to:
Celebrate referral wins and positive NPS feedback, Review churn cases, and brainstorm process fixes and prioritise cross-functional experiments (e.g., a new in-app prompt or pricing incentive)
Action Steps:
Designate flywheel champions in each department responsible for a quarterly improvement.
Create a shared playbook documenting best practices for activation, support templating, and upsell scripts.
Introduce a two-sided referral program that rewards both referrers and referees with account credits or discounts.
Conclusion
By weaving small, consistent customer-focused actions into every stage of your SaaS flywheel, you build a growth engine that weathers market shifts and compounds over time.
Start by equipping users with clear guides, tutorials, and in-app tips so they can unlock value immediately. This smooth, fuss-free onboarding sets the tone for long-term loyalty. Automate repetitive tasks and trigger email flows based on user behavior to keep engagement high without extra manual effort.
Finally, keep your finger on the pulse with key flywheel metrics MRR growth, churn rate, expansion revenue, and NPS so you can refine each turn of the wheel with data-driven insights.
Put your SaaS flywheel on autopilot by applying these principles and watch your subscription model spin up predictable, sustainable growth.
