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Definition of AARRR
AARRR, also known as Pirate Metrics, is a valuable framework for marketers. It stands for Acquisition, Activation, Retention, Referral, and Revenue. These five metrics provide a simple and effective way to understand your customers’ journey, from the moment they discover your product or service to the point they become loyal customers.
Acquisition is about attracting new users to your product or service. Activation involves ensuring that these users have a positive first experience. Retention focuses on keeping these users engaged over time. Referral is about turning your users into advocates who bring in new users. Finally, Revenue is about monetising these users. By understanding and optimising these five stages, marketers can drive growth and profitability.
An example of AARRR
Here is an example of how it works:
Acquisition: Growth Method runs a targeted social media campaign to attract potential customers. They offer a free trial of their software to entice people to sign up.
Activation: Once a potential customer signs up for the free trial, Growth Method sends them an engaging welcome email. This email includes a step-by-step guide on how to use the software, encouraging the user to start using it.
Retention: To keep customers engaged and using the software, Growth Method sends regular emails with tips and tricks, updates on new features, and personalised suggestions based on the user’s activity. They also offer excellent customer service to resolve any issues quickly.
Referral: Growth Method introduces a referral programme where existing customers can earn rewards for referring new customers. This encourages users to share their positive experiences with others.
Revenue: Finally, Growth Method converts free trial users into paying customers by demonstrating the value of their software. They offer various pricing plans to suit different needs and budgets, and they send timely reminders towards the end of the free trial period.
How does AARRR work?
AARRR works by guiding marketers through five key metrics: Acquisition, Activation, Retention, Referral, and Revenue. This framework helps marketers understand the customer journey and optimize their marketing strategies. Acquisition involves attracting new users to the product or service. Activation focuses on ensuring the user’s first experience is positive. Retention aims to keep users engaged and returning. Referral encourages satisfied users to recommend the product or service to others. Finally, Revenue focuses on monetizing the user base to generate income. By analyzing these five stages, marketers can identify strengths, weaknesses, and opportunities in their marketing strategy.
Expert opinions and perspectives
Here are how some of the world’s best marketing and growth professionals, and companies, think about AARRR.
- “It’s about how to develop a model of your customer behavior, and then use conversion metrics / web analytics to assist your internet marketing & product management efforts.” – Dave McClure https://500hats.typepad.com/500blogs/2007/06/internet-market.html
- “Startup metrics for pirates: AARRR! Acquisition, Activation, Retention, Referral, Revenue. Focus, prioritise, and improve these 5 key metrics, and you will be successful in growing your business.” – Dave McCure
Questions to ask yourself
As a modern growth marketing or agile marketing professional, ask yourself the following questions with regard to AARRR:
- How can I attract more users to my product or service?
- What strategies can I implement to increase the activation rate of new users?
- How can I encourage users to return and engage with my product or service regularly?
- What can I do to convert engaged users into paying customers?
- How can I inspire customers to refer my product or service to others?
Here are some related articles and further reading around AARRR that you may find helpful.
- Dave McClure – “Startup Metrics for Pirates: AARRR!” – Slideshare Link
- Brian Balfour – “How To Create a Growth Model Part I” – Coelevate Link
- Ben Yoskovitz and Alistair Croll – “Lean Analytics: Use Data to Build a Better Startup Faster” – Amazon Link
- Andrew Chen – “Zero to One Million: An SEO Blueprint” – Andrew Chen’s Blog Link
- Gabriel Weinberg and Justin Mares – “Traction: How Any Startup Can Achieve Explosive Customer Growth” – Amazon Link
About Growth Method
Growth Method is the growth platform designed for experiment-led and data-driven marketers.