If you’re familiar with the AARRR — also known as the Pirate Metrics — you’ll understand how you can use it to improve each part of your sales funnel. But have you ever considered how your brand could use the AARRR metric across different growth stages of your business?
In this article, we’ll break down the different AARRR metrics and show how you can apply them across early, growth, and scale stages in your business.
 |
| Image by freepik |
What are the AARRR metrics?
AARRR is an acronym for a set of metrics that help teams focus on and optimize the user journey. Instead of looking
Read this article for a deeper dive into AARRR.
Early stage AARRR growth metrics
Early stage businesses have two primary goals:
Validating the product’s value proposition.
Find a strong product-market fit.
Acquisition, activation, and retention are the key AARRR metrics to focus on. While revenue and referral might not be the biggest priorities, you should still pay attention to these metrics because they will help you lay the groundwork for the growth and scale stages.
Acquisition
Sketch out the demographics, pain points, and motivations of your target audience so that you can tailor your marketing toward your ideal customer profile (ICP).
Focus your attention on low-cost acquisition channels like SEO, social media, and content marketing.
Pay close attention to customer acquisition costs (CAC). This process will help you understand which channels are most effective and help you manage your marketing budget most effectively.
Tap into any business relationships you have in your network. Collaborations with businesses or relevant influencers can give you an early boost.
When it comes to gathering leads in the early stage, quality is better than quantity.
Activation
Ensure your onboarding is seamless, from signing up to user activation and onboarding content.
Use product tours, walkthroughs, tooltips, and help content to boost user engagement.
Personalize your onboarding content based on user data, so you highlight relevant features.
Track activation metrics like sign-ups, feature adoption, and time-to-value. These will give you a strong insight into user engagement and activation.
Make the most of user feedback and surveys so you can constantly iterate and improve your product.
Retention
If you want to drive value and engagement, give your audience things like new features and great content that helps them achieve their goals with your product.
Consider building a community. It could be a dedicated forum, social media hashtags, or even live events.
Drive further connections with a newsletter or in-app messages.
Consider loyalty programs, rewards, or other incentives to build a base of loyal users.
Track churn rates and use exit surveys to unearth causes.
Revenue
Now is a good time to try different pricing models for your product. Some options include ad-supported, freemium, subscription, or usage-based pricing. Select the financial model that chimes with your user base.
Reduce friction for payments with social logins and streamlined checkouts.
Explore the impact of promotions, discounts, or special offers.
Pursue upselling and cross-selling opportunities.
Subscription models are popular among SaaS businesses, so track average revenue per user (ARPU), customer lifetime value (CLTV), and churn rates.
Referral
Keep your referral programs simple and easy to use.
Provide clear rewards for anyone who refers to your product.
Invest in marketing to promote your referral program, and send in-app messages to encourage users to get involved.
Watch referral and conversion rates so that you understand the long-term impact of these referrals on your overall revenue.
Growth stage AARRR growth metrics
Once you’ve locked down your product-market fit, it’s time to focus on optimizing your acquisition efforts and driving sustainable revenues.
Acquisition
Expand your sales channels to include PPC ads, affiliate marketing, and influencers in your niche.
Experiment with your marketing messaging to capture new types of users.
Use retargeting and remarketing to win back former users or those who have expressed interest in your product.
Build interactive product demos to help convert users and collect first-party data.
Invest in analytics tools to contextualize your acquisition channels.
Activation
Analyze user data to understand different audience segments. Use this information to personalize your onboarding material toward different cohorts.
A/B test the activation process to see how different material affects conversions.
Add onboarding checklists to gamify product activation and boost the user experience.
Focus on customer self-service options, like help articles and knowledge bases.
Consider in-app live chat to provide real-time assistance.
Retention
Set up a customer success team to boost user engagement and personalized support.
Survey users and diagnose reasons for customer churn. Then, get proactive with at-risk users. If you have a lot of data, explore using ML algorithms to boost your churn predictions.
Use continuous customer feedback loops via surveys so you can improve your product and service user needs.
Encourage user-generated content and community building.
Revenue
Offer flexible pricing models that target particular cohorts. For example, tiered pricing can serve users who want a premier service or customers looking for bargains.
Use dynamic pricing or discounts to wring extra revenue from your target audience.
Invest in sales enablement and training, and utilize interactive product demos.
Explore new geographical markets or audiences that your product can serve.
Look into partnerships or integrations with related products to widen your target market.
Referral
Use social proof and user testimonials to build your product’s reputation online.
Advance your referral programs to include tiered rewards for users who advocated the most effectively for your product.
Employ NPS surveys to understand user satisfaction and, ultimately, the likelihood of recommending your product.
Track referrals and conversions across different channels to see which avenues warrant more investment and which need more attention.
Scale stage AARRR growth metrics
Growth means that your business is adding resources while growing revenue. Scaling, on the other hand, involves adding revenue at a higher rate than resources. In this growth stage, businesses need to focus on hyper-efficiency and using automated technologies to deliver user experiences across a broader base of users.
Acquisition
While performance marketing is still important, brands that want to scale need to boost brand awareness and reputation if they want to win high-quality leads.
Experiment with a more diverse set of marketing channels, even ones that might not have worked as well in the past.
Use Account-Based Marketing (ABM) to target prestigious companies. Tailor your messaging and interactive demos toward specific brands’ problems or pain points.
Focus on users that will generate long-term value, even if it means eating higher initial CAC.
Scale and automate your referral program so that it works as an acquisition channel all on its own.
Redouble your investments in quality content that addresses users' pain points and objections.
Activation
Invest in user onboarding automation tools that enable you to connect with your target audience 24/7.
Use interaction onboarding tools to build automated product tours that demonstrate how your target audience can achieve their objectives with your solution.
If you haven’t done it already, leverage AI chatbots to help deal with customer issues without adding employee headcount to your books.
Use advanced analytics and ML to create highly targeted and personalized onboarding experiences.
Monitor activation journeys to pinpoint and eliminate points of friction.
Retention
Customer success programs help you drive adoption, build relationships, and maximize CLTV. Implement proactive and scalable programs to boost customer experience.
Augment your ML-driven churn predictive models with automated interventions and offers to keep users engaged and subscribed.
Self-service knowledge portals are essential for scaling companies. Provide access via an in-app widget so you can serve your users relevant content when they get stuck or have issues.
Expand your online communities even further with rewards, competitions, and dedicated employees helping to grow your web presence.
Set up a customer advisory board to engage with key stakeholders to gather feedback, insights, and ideas for product development and improvement.
Revenue
Build a dedicated enterprise sales team and target large organizations and even public sector departments. Winning these contracts can accelerate revenue growth, especially in SaaS.
Explore value-based or usage-based pricing models to target a high-quality set of users while driving revenues to the next level.
Re-focus on upselling, cross-selling, and other revenue-maximizing activities.
Explore revenue-optimization tools with dynamic or tailored offers for particular user segments based on long-term CLTV.
Referral
Combine referral incentives with loyalty programs to reward customers for both referrals and continued engagement.
Focus on influencers within your niche to gain access to their loyal audiences.
Build case studies in partnership with larger clients that demonstrate the impact that your product has on businesses, providing crucial social proof.
Analyze your referral incentives and find ways to drive better participation rates.
Final thoughts
The AARRR framework is so effective because it lets you break down the customer journey into bite-sized chunks. From there, you can measure and optimize each part, and start driving revenue.
With acquisition so tough, costly, and competitive these days, your activation and retention game must be on point.