For years, marketers have treated the sales funnel like gospel. It’s the core structure most companies build their marketing strategies around, guiding users from awareness to purchase in a series of clearly defined steps.
But here’s the problem: the funnel is broken.
Or, more accurately, it’s outdated. The way people discover, engage with, and buy from companies has fundamentally changed. And the old linear model is struggling to keep up.
In a world where attention spans are fragmented and customer journeys are messy, trying to push users through a neat, sequential funnel is like trying to herd cats. Worse, the funnel mindset ignores one of the most powerful tools of modern marketing: continuity.
It’s time to stop thinking in funnels and start building Growth Loops.
What’s Wrong with Funnels?
Funnels are based on a simple, linear progression:
- Awareness: People find out you exist.
- Interest: They decide you might be worth their time.
- Consideration: They evaluate your product against alternatives.
- Conversion: They make a purchase or sign up.
Simple, right? The problem is, real-world customer journeys rarely follow that linear path.
Linear Thinking in a Non-Linear World
People discover brands through a myriad of touchpoints: social media, word-of-mouth, content, advertising, podcasts, forums, even casual conversations. And the journey from awareness to conversion often loops back on itself.
Someone might read a blog post, listen to a podcast, see a testimonial, and then leave. Weeks later, they return via a YouTube video or a friend’s recommendation. Funnels don’t account for this complexity.
Funnels are built on the assumption that users move smoothly from one stage to the next. But the reality is much messier. Today’s customers bounce around platforms, consume content sporadically, and make purchasing decisions based on a collection of experiences, not a defined pathway.
Funnels Are Transactional. Growth Loops Are Relational.
The traditional funnel ends at the point of conversion. The entire goal is to push people through to a final stage whether that’s a sale, a sign-up, or some other conversion metric.
But what happens after?
A converted customer isn’t the end of the journey; they’re the beginning. Funnels fail because they treat every customer interaction as a discrete event, rather than part of an evolving relationship.
Growth loops, on the other hand, recognize that the process is continuous. A successful interaction generates value that feeds back into the system, creating a compounding effect over time.
Funnels Don’t Adapt to Changing Markets
The traditional funnel model assumes consistency. It’s built on the belief that if you drive enough people through the system, a predictable percentage will convert. But markets don’t behave predictably.
Platforms shift. Competitors emerge. Customer expectations evolve. And the funnel model simply isn’t equipped to adapt to these rapid changes.
When you build a marketing strategy around a rigid funnel, you’re essentially building a bridge to a moving target. And more often than not, that bridge collapses.
What Are Growth Loops?
Growth loops are systems where the output of one process becomes the input for another. They create sustainable growth by continuously feeding value back into the system, rather than pushing users toward a dead-end conversion.
In a funnel, once someone converts, the relationship effectively stops. But in a growth loop, every action is designed to feed the system and drive further growth.
Types of Growth Loops:
- Acquisition Loops
Users bring in new users through referrals, sharing content, or collaborative features.
Example: Dropbox’s famous referral program, where users were incentivized to invite friends to gain more storage. Each new user brought in contributed to the acquisition loop. - Engagement Loops
Content or product use creates more content, which attracts more users.
Example: LinkedIn’s engagement algorithm, where the more people interact with content, the more it surfaces to others, creating a cycle of continuous visibility. - Retention Loops
Users derive consistent value from the product, increasing retention and loyalty.
Example: Spotify’s playlists and recommendation algorithms create personal value for users, keeping them engaged and returning.
Why Growth Loops Are Better Than Funnels
- They’re Continuous, Not Transactional
Growth loops never end. They’re designed to create ongoing value and compounding growth. - They Adapt to Market Changes
By focusing on systems rather than linear pathways, growth loops are inherently adaptable. When the market shifts, the loops can shift with it. - They Leverage Network Effects
The more users engage, the more valuable the system becomes. This is particularly powerful in social platforms, SaaS products, and communities. - They Focus on Creating Value, Not Just Extracting It
Instead of trying to squeeze value out of each customer interaction, growth loops focus on creating value that drives further growth.
How to Build Effective Growth Loops
- Identify Your Inputs and Outputs
What actions generate value?
How can those actions be amplified and fed back into the system? - Build Feedback Mechanisms
Every action should generate data or value that loops back into the process.
For example, when users create content or refer friends, their actions should drive further visibility and engagement. - Measure Continuity, Not Just Conversions
Funnels focus on end-goals. Growth loops focus on continuous improvement.
Measure the rate at which users re-engage, refer others, or contribute value back to the ecosystem.
From Funnels to Flywheels
Moving from funnels to growth loops requires a fundamental shift in mindset.
Instead of thinking about customer journeys as a straight line, you need to start seeing them as interconnected cycles.
Growth loops don’t just increase revenue. They compound it.
The most successful companies aren’t building funnels. They’re building systems of continuity, where every user interaction fuels the next.
Are you building a funnel or are you building a loop?
