https://medium.com/@ms.mbalke/aarrr-framework-metrics-that-let-your-startup-sound-like-a-pirate-ship-e91d4082994b
Today, September 19th, is International Talk Like A Pirate Day, and thus, the perfect excuse to chat about one of the most important metric frameworks to live by as a startup marketer or Growth Hacker: The AARRR framework.
10 years ago… wow, that’s a long time ago.
10 years ago, Dave McClure, venture capitalist, angel investor, founder of startup accelerator 500 Startups and self proclaimed creep, introduced the world to a 5-step framework for growth. That framework was called AARRR, or also the Pirate Metrics.
Before we begin, more of a video person? Then watch this blog post below instead of reading it.
What is AARRR?
AARRR stands for Acquisition, Activation, Retention, Referral and Revenue and is pretty much the bee’s knees when it comes to understanding your customers, their journey and optimizing your funnel as well as setting some valuable and actionable metric goals for your startup.
Why AARRR?
AARRR is widely accepted as the five most important metrics for a startup to focus on. That is because these metrics effectively measure your company’s growth while at the same time being simple and actionable.
So without further ado, let’s begin.
Acquisition, the first A in the AARRR framework, describes how people find you and eventually turn in to customers.
In the dating world, acquisition would range from something like coincidentally meeting your future better half through a friend to wooing him/her into settling down with you (I’m sure your fantastic dancing skills played a part in this somewhere).
It’s important to view the acquisition part holistically.
That means not just looking at site visitors but also at how many and how those site visitors convert to customers. You want to track every step of your customer journey in the funnel not just look at the final conversion to a paying customer. Every micro-conversion along the way counts. To come back to the dating analogy, the first time you said “I love you” counts too, not just the day you got married.
Let’s look at an example customer journey for a SaaS business:
Website visit -> email signup -> webinar participation -> call with sales team -> conversion to customer.
All those steps, before converting to a customer, count as micro-conversion and should be measured to a) understand your customer’s journey and b) optimize your customer’s journey. For SaaS and any other business that heavily relies on an active sales team it’s also important to distinguish between a lead and a qualified lead.