What is the AARRR framework? Definition, usage, and FAQs.

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What is AARRR Framework?

AARRR Framework is an acronym for a set of five user behaviors that businesses can track throughout the customer lifecycle which can be used to improve product quality and marketing.

AARRR stands for:-

  • Acquisition: How are the customers initially finding out about your product or service.
  • Activation: What actions are the customers taking while dealing with your product.
  • Retention: Are the customers sticking around? If not, how can you ensure they stay?
  • Referral: Are the customers encouraging their relatives and acquaintances to use your product?
  • Revenue: Are the customers willing to pay for the product or service? How can you boost the money coming in?

Who created the AARRR Framework?

The AARRR framework was first created by Dave McClure, a silicon valley investor and founder of 500 startups, as part of the Supernova talk he gave in 2007. 

McClure had two goals in mind while creating the framework. First, let the companies know the metrics that actually mattered to their growth and only focus on them. Second, help the companies use the correct data to accelerate their success in product management and marketing and also improve the initiatives that aren’t performing so well.

You may have also heard the AARRR framework is referred to as “Pirate Metrics”.

The reason? Hint – Try saying “AARRR” out loud. Maybe you’ll get your answer.

What are some examples of the AARRR Framework?

The AARRR framework at its core consists of five key metric categories. Each metric corresponds to specific objectives required for a business to grow and sustain itself in the market. This framework, however, does not have clearly defined characteristics of each metric and can be changed based on the type of industry and requirements.

Let us consider some real-world examples for a better understanding of these metrics.

Acquisition Metrics

  • SEO research
  • Marketing campaigns
  • Ads and other content campaigns
  • Social media promotion
  • Word of mouth

Activation Metrics

  • Providing a contact form
  • Experimenting with different features
  • Signing up for a free trial
  • Subscribing for a newsletter
  • Visiting different pages

Retention Metrics

  • Responding to your emails
  • Revisiting your website/product
  • Buying your product again.

Referral Metrics

  • Recommending relatives and acquaintances by word of mouth
  • Social media promotion of your brand
  • Referral promotions embedded emails
  • Signing up for referral programs

Revenue Metrics

  • Reaching a previously set minimum revenue for a customer
  • Reaching break-even point
  • Revenue exceeding the customer acquisition

These are just some of the examples you could use as part of the AARRR Framework for your business. They could change based on the type of business or industry you are in, i.e., there is nothing set in stone for the AARRR framework.

Keeping track of these metrics would help you see many new opportunities in your business, and that’s one of the major benefits of using this framework.

How to use the AARRR Framework?

According to McClure, the AARRR framework is less a step-by-step process and more about the definitions of the metrics you choose to inspect. Here’s how you could use this to cover every aspect of your business.

  1. Define the AARRR metrics most relevant to your organization.
  2. Set up the tools and processes needed to assess and track these metrics.
  3. After gathering some concrete data, use the results to make some changes, set up A/B tests, and analyze the results to make decisions best suited to your business.
  4. You could now turn any analysis into action within your organization via this refined set of AARRR metrics.

FAQs

Q: What does AARRR stand for?

A: AARRR stands for Acquisition, Activation, Retention, Referral, and Revenue. It refers to a set of metrics that can be used to enhance the growth of a company.

Q: Why is AARRR called Pirate Metrics?

A: AARRR, when said out loud sounds like a popular pirate exclamation and hence are called Pirate Metrics.

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