AARRR is an acronym for Acquisition, Activation, Retention, Referral, and Revenue. These are the five key stages of a customer's journey, from the moment they first learn about your product or service, to becoming a paying customer, to continuing to use and advocate for your product.
Each of these stages is important in its own right, but together they give you a complete picture of how your customers interact with your business, and where you might need to make improvements.
Acquisition: How many people are aware of your product or service? How many of them become customers?
Activation: How many of your customers actually use your product or service? How easy is it for them to get started?
Retention: How many of your customers continue to use your product or service over time? What are the churn rates for each stage of the customer journey?
Referral: How many of your customers refer others to your product or service? What do they say about your product when they do?
Revenue: How much revenue do you generate from each stage of the customer journey? How much does each customer contribute to your bottom line?
What is AARRR used for?
The AARRR metric is commonly used by startups and growth teams to measure user acquisition and growth. It stands for Acquisition, Activation, Retention, Referral, and Revenue.
The AARRR framework helps startups and growth teams track progress and identify areas of opportunity. By tracking acquisition, activation, retention, referral, and revenue, startups can get a holistic view of how their product is performing and where they need to focus their efforts.
Acquisition: How many people are using your product? This metric measures the number of new users your product acquires over a period of time.
Activation: How many of those users are active? This metric measures how many new users actually use your product. A high activation rate indicates that your product is easy to use and provides value to users.
Retention: How many of those users stick around? This metric measures how many users continue to use your product over time. A high retention rate indicates that users find value in your product and keep coming back.
Referral: How many of those users tell their friends? This metric measures how many users share your product with others. A high referral rate indicates that users are happy with your product and are eager to recommend it to others.
Revenue: How much money are you making? This metric measures the amount of money your product generates. A high revenue rate indicates that your product is valuable to users
How are pirate metrics measured?
1. Acquisition: How many people are using your product?
2. Activation: How many people are using your product in a way that they find valuable?
3. Retention: How many people are using your product over time?
4. Referral: How many people are referring other people to your product?
5. Revenue: How much money are you making from your product?
What are the pirate metrics for startups?
The "Pirate Metrics" for startups are a framework for thinking about and measuring customer engagement, developed by startup accelerator Dave McClure.
There are five stages in the framework:
1. Acquisition: How do you acquire new customers?
2. Activation: How do you get customers to take their first step with your product or service?
3. Retention: How do you keep customers coming back?
4. Referral: How do you get customers to refer others to your product or service?
5. Revenue: How do you generate revenue from your customers?
Each stage has its own metric that should be tracked:
1. Acquisition: Cost per Acquisition (CPA)
2. Activation: Activation Rate
3. Retention: Retention Rate
4. Referral: Referral Rate
5. Revenue: Revenue per Customer (RPC)
There are a number of ways to think about each of these metrics, but the key is to track them over time and use them to inform your decisions about how to grow your business. What does C stand for in AARRR metric *? C in AARRR stands for Customer Retention.