AARRR Pirate Metrics Framework: What It Is & How It Works

The AARRR metrics framework, besides called pirate metrics oregon the AARRR funnel, is simply a acceptable of metrics utilized to way and power captious idiosyncratic behaviour that tin pb to concern growth. The acronym stands for acquisition, activation, retention, referral, and revenue.

Startups each astir the satellite person been utilizing this model to larn whether they are connected a maturation way and what circumstantial stages of the funnel request optimization. And investors watched those intimately too. For galore years, AARRR was the aureate modular of metrics until idiosyncratic projected to flip the script.

In this article, you will learn:

• Who is the AARRR metrics model for?
• How does the AARRR metrics model work?
• How AARRR compares to RARRA

The AARRR model was devised by capitalist and entrepreneur Dave McClure (founder of 500 Startups) retired of necessity for a simple, cosmopolitan solution that any startup tin use to:

• Develop a exemplary of lawsuit behaviour that leads to concern growth.
• Improve selling and improvement efforts by focusing connected metrics that truly matter.

Naturally, the pirate relation is conscionable a coincidence, stemming from however the metrics are pronounced. It has thing to bash with moving a startup similar a pirate ship. The extremity of utilizing this metrics model is to make a sustainable and scalable concern by leaving each the vanity metrics down and focusing connected what makes a concern grow.

Therefore, the pirate metrics are not lone for marketers. CEOs, entrepreneurs, merchandise managers, and investors tin usage them too.

As I mentioned earlier, this model is often referred to arsenic a benignant of marketing funnel. This is due to the fact that acquisition, activation, retention, referral, and gross are projected present arsenic consequent stages of a simplified buyer’s journey.

Potential customers ideally commencement astatine the acquisition stage. Some of them are activated done experiencing the product, and lone a percent of those archetypal visitors volition get astatine the gross signifier and go customers.

As successful immoderate selling funnel, the thought is to determination radical from the archetypal signifier to the last. Therefore, these stages become steps you request to instrumentality successful bid to marque your concern grow. Let’s exemplify that:

So successful this section, we’re going to speech astir however we tin prosecute each signifier of the funnel, positive however to measurement each signifier of the funnel.

1. Acquisition

Or, successful different words, however to pull radical to your business? How to marque them find your connection (or person your connection find them) and sojourn your website oregon your app? And lastly, however to measurement all that?

Without radical learning of your beingness and coming to you to observe what you offer, your concern won’t marque immoderate money—no substance however large it is. That’s wherefore you request to deliberation astir the marketing tactics and channels that volition transportation your connection to your people audience.

Generally, the much radical you pull successful the acquisition stage, the much paying customers you volition person successful the past signifier of this funnel.

For this stage, you volition apt usage a batch of antithetic selling tactics, spanning assorted selling channels. To amusement you what I mean, fto maine database a mates of things we bash to pull visitors to Ahrefs:

• Product-led articles for our blog
• Product-led videos for our YouTube channel
• Free tools 
• Social media
• Partnerships with influencers successful our niche
• Advertising connected Twitter, Quora, Google Ads, etc
• PR

In choosing your tactics and channels, it’s important to cognize who your people assemblage is and wherever you tin reach them.

For example, our people assemblage consists of radical who bash SEO: nonrecreational SEOs, contented marketers, concern owners, and bloggers, among others. Knowing what they are funny successful and the hunt request for those topics, we tin determine what contented we should make to leverage hunt request connected Google and yet pull them to our website.

This method is called SEO content: creating contented that’s designed to fertile connected hunt engines similar Google.

Furthermore, we tin measurement the show of that contented by looking astatine the integrated hunt traffic:

An acquisition metric tin beryllium thing that informs you of radical coming successful from “the outside” to your business. So your metrics for this signifier volition beryllium connected your channels and your concern model. These tin beryllium referral postulation from reviews, affiliate links from partners, app store visits, app downloads, and more.

Measuring acquisition doesn’t needfully mean tracking homepage visits. You tin support way of visits to immoderate landing page/screen that, successful your opinion, acts arsenic a gateway to your business—for example, assorted landing pages utilized successful your PPC campaigns.

Recommended reading: How to Use & Reduce Customer Acquisition Cost (CAC)         

2. Activation

The activation signifier is astir determining, engaging, and measuring the actions you privation radical to instrumentality to acquisition your merchandise oregon service. These see signing up for a escaped proceedings oregon a escaped tool, filling retired a interaction form, signing up for a newsletter, watching a merchandise demo, etc.

The crushed wherefore you request to “activate” your visitors is that specified visits to your website are not capable to marque idiosyncratic bargain from you. Without encouraging your visitors to larn much astir oregon acquisition your product, they volition stay conscionable that—visitors who ne'er go customers.

Of course, it’s astir intolerable to activate 100% of your recently acquired visitors. This study revealed that the mean conversion complaint connected landing pages successful the SaaS manufacture successful 2021 was 3%.

Some radical volition conscionable permission for assorted reasons (not the close time, conscionable browsing, etc.). This doesn’t needfully mean you’re doing thing wrong. You tin precisely people the astir applicable keywords, advertise to niche audiences, oregon beryllium an adept successful advertisement targeting. But you’ll inactive beryllium visited by radical who aren’t acceptable to bargain from you. It’s conscionable portion of the game.

Effectiveness successful converting radical from the acquisition signifier to the activation signifier depends connected factors like:

• How “qualified” are your visitors erstwhile they archetypal travel to your site? Do they already cognize your brand? Are they conscionable learning astir the solution, oregon are they acceptable to marque a purchase?
• How compelling is your worth proposition?
• How overmuch friction is determination earlier you tin activate your visitors? Have you acceptable the barroom excessively high/too low?
• The UX and UI of your website, e.g., aesthetics, tract speed, and accusation architecture.

3. Retention

This portion of the AARRR model is astir encouraging activated users to come back.

The thought down this is if radical repeatedly sojourn your business, it’s a motion that they privation much of what you offer—possibly adjacent capable to bargain from you. Conversely, if radical don’t travel backmost aft activation, it’s apt they’ve mislaid involvement successful making a purchase.

You tin besides look astatine it this way. If you’re activating users done a escaped proceedings of your merchandise and your users travel backmost to really usage the product, they are showing a behavioral signifier akin to that of paying customers: coming backmost aggregate times to usage the product.

So by encouraging radical to travel back, you are fostering that behavioral change. And by measuring this stage, you tin much easy forecast which users/cohorts are apt to go customers.

Here are immoderate factors that tin power this signifier of the funnel:

• Expectations vs. reality – If you’re overpromising successful the erstwhile stages of the funnel and underdelivering here, radical volition driblet disconnected massively.
• Low worth for the money – Sometimes, determination is nary different mode to spot if thing is worthy the wealth until you effort it. In immoderate cases, radical find the worth of their acquisition doesn’t lucifer the wealth they spent.
• Product education – If radical don’t cognize however to usage your merchandise oregon wherever to find definite features, they volition consciousness confused oregon adjacent frustrated.
• Lack of a usage case – It’s 1 happening to amusement radical however they tin bash thing oregon wherever they tin find immoderate function, and it’s different to inspire. Your customers whitethorn request a merchandise similar yours, but they whitethorn not cognize what to usage it for oregon however to acceptable it into their workflow.
• Tire-kickers and hitchhikers – Some radical whom you person successfully activated ne'er meant to bargain your product. Some radical whitethorn conscionable privation to browse around, and that’s it. Others whitethorn motion up for that 1 peculiar happening you offered successful your escaped proceedings without the request to usage it regularly.

With immoderate mentation retired of the way, let’s look astatine an illustration of influencing the retention stage.

At Ahrefs, we usage merchandise acquisition arsenic a mode to support our users informed and engaged. So erstwhile radical motion up for an Ahrefs account, we nonstop them 3 onboarding emails with an overview video of our toolset and immoderate tips connected however to get astir the interface.

Essentially, that email provides a shortcut to each the merchandise acquisition we service successful different places: this blog, Ahrefs Academy, Ahrefs Insider radical connected Facebook, and acquisition videos connected YouTube.

As you whitethorn person noticed successful the screenshot above, we besides supply enactment contextually close wrong the product. Every metric that users find wrong the toolset has a hint explaining what it is for, and each reports are accompanied by tutorials.

When it comes to measuring retention, the champion mode to bash it is by measuring merchandise engagement (of course, if you’re offering immoderate benignant of escaped trial). For example, you tin way however galore users log successful astatine slightest 3 times successful a seven-day period. (You tin usage tools similar Mixpanel or Heap.)

On a broadside note, if you observe a unsocial signifier of merchandise usage among your paying customers, you tin aboriginal usage that to modify your retention metrics to amended place users who are astir apt to upgrade their accounts.

If you’re not offering a nonstop merchandise acquisition successful the activation stage, you tin scope for different metrics like:

• Repeated visits to your website (or definite pages in it).
• Newsletters being opened.
• A continued speech with your sales team.

4. Referral

The referral signifier successful your AARRR metrics should reply the question, “How bash we cognize radical similar america capable to urge us, and however tin we power that?”

Referral is conscionable 1 of the galore acquisition channels. However, erstwhile idiosyncratic likes your merchandise capable to archer others, that can’t beryllium a amended motion that you’ve created thing of large worth and radical are acceptable to wage for it. In startup lingo, this means you’re getting traction.

Another crushed wherefore you request to instrumentality idiosyncratic recommendations earnestly is it’s 1 of the astir effectual ways to get caller customers. According to a Nielsen study, 83% of radical spot recommendations from friends and family, and 66% of radical spot user opinions posted online.

As a effect of referrals from your blessed users, you get much prospects to “fuel” the acquisition signifier of the funnel (hence the arrow pointing from referral to acquisition successful our illustration of this framework).

But however to marque users urge your merchandise to others? Well, determination is nary different mode astir it than to physique thing genuinely invaluable and supply a large idiosyncratic experience. How? Start with researching your market to recognize what the marketplace needs and however good the contention serves that demand. Next, marque definite your concern thought tin execute product-market fit.

You tin look for signs of affirmative (and negative) word of mouth about your merchandise oregon work in:

• Social media shares and conversations.
• Industry surveys.
• Review sites.
• Communities successful your marketplace segment.

Receiving affirmative connection of rima organically is the implicit foundation. But not each of your users volition beryllium consenting to stock their experiences, and that’s wholly normal. But determination are immoderate ways you tin power connection of rima to springiness it an further push:

• Referral programs
• PR
• Helpful contented that solves your users’ problems
• Encouraging users to stock their experiences connected reappraisal sites similar G2 oregon Capterra
• User-generated contented (e.g., pictures with branded hashtags connected Instagram)
• Positive experiences (e.g., sending users free swag)
• Social sharing widgets

When it comes to measuring this signifier of AARRR, 1 thought is to usage societal media tools similar Brand24 to show the web for mentions of your product/brand. You tin besides support way of your reviews and look for immoderate important changes successful the mean standing scores.

If you privation to spell adjacent deeper and measurement the referral signifier much thoroughly, you tin gauge however consenting people are to urge you utilizing the NPS score.

5. Revenue

And finally, aft your visitors go activated users, immoderate of them go paying customers.

A somewhat much method word for that is “monetization behavior.” Dave advises startups to fig retired what portion of their merchandise oregon work should beryllium monetized.

For example, the much you usage Ahrefs, the much you wage for it. But you don’t wage for each click you make. This is simply a mediocre monetization behaviour idea. For us, it makes the astir consciousness to necktie the terms of our work to definite tiers of information usage and information update frequency.

In practice, arsenic the usage of our merchandise grows, truthful bash our costs. But our nett grows proportionally as well.

Of course, monetization behaviour for your concern tin beryllium thing wholly different. You whitethorn adjacent support your work wholly escaped for users and monetize via ads oregon in-app purchases (e.g., societal media platforms).

When it comes to influencing your revenue, you whitethorn person already guessed that gross is an result of each of the erstwhile stages of the funnel. The much visitors you pull and efficaciously activate, the much income you get successful the end.

Let maine springiness you an example. The much we amended radical with product-led content, the much information radical usage successful their accounts. And since that’s the main operator of gross for us, the much information radical use, the much we profit. And it’s a win-win. If radical usage much data, it means they cognize however to enactment our merchandise into signifier to amended their SEO.

As for measuring this past signifier of the framework, present are immoderate fashionable revenue metrics:

• Customer beingness worth (CLV or CLTV)
• Annual oregon monthly recurring gross (ARR, MRR)
• Revenue maturation rate

Let’s reason this conception with Dave’s archetypal AARRR dashboard example.

A fewer takeaways from the representation supra I’d similar to note:

• Notice however conversion drops arsenic you spell down the framework. That’s normal. All selling funnels are leaky by design. (They astir apt shouldn’t beryllium called “funnels” successful the archetypal place.) But don’t dainty those numbers arsenic benchmarks, arsenic they are conscionable examples. 
• Notice that determination are aggregate micro stages astatine each stage. For example, activation consists of these: blessed 1st visit, email sign-up, and relationship sign-up. But you don’t person to framework it this way. You tin simplify this dashboard utilizing conscionable 1 metric per stage. You tin besides spell deeper and usage a much granular mode of measuring (learn more astir selling KPIs here).

If I haven’t stressed the value of retention enough, present is an alternate metrics model that is virtually based connected this stage.

RARRA is the pirate metrics “remixed” by Thomas Petit and Gabor Papp with mobile startups successful caput (but could astir apt beryllium utilized by immoderate startup). It goes like this:

1. Retention – Focus connected creating a merchandise that radical volition privation to travel back to
2. Activation – Let radical acquisition the worth of your merchandise (aka the “aha moment”) arsenic soon arsenic possible
3. Referral – Get your users to speech astir the app and share it
4. Revenue – Find ways to monetize the product
5. Acquisition – Scale and optimize your acquisition channels; bash it lone aft you person wide signals that radical are consenting to travel backmost to your app (important!)

As you tin see, this model consists of the aforesaid stages that we’ve discussed truthful far. So the question arises, “How is RARRA antithetic from AARRR?”

In my opinion, the main quality betwixt these 2 frameworks is that RARRA emphasizes definite metrics, portion AARRR is conscionable a exemplary for identifying the captious stages successful a buyer’s journey.

Or let’s enactment it this way. The AARRR model is simply proposing that activation is the archetypal signifier successful a buyer’s journey. But speechmaking the RARRA model the aforesaid mode is incorrect due to the fact that retention can’t beryllium the archetypal signifier successful a buyer’s journey.

The remixed model leads with retention (instead of activation) due to the fact that it tries to stress that mobile startups should physique products with retention successful mind. The archetypal framework, connected the different hand, doesn’t specify that you request to absorption much connected 1 signifier than the other.

I’d accidental that RARRA is simply a bully commentary to AARRR that’s made 10 years later. And weirdly enough, you tin usage both. You should physique easy-to-use, invaluable products that users volition privation to travel backmost to, but you should besides fig retired however to pull those users. And what’s more, you volition request to get a batch much users astatine the apical of the funnel than you privation to person customers astatine the bottommost of the funnel.

Of course, I afloat promote you to make your ain sentiment astir these 2 frameworks. Or adjacent make your ain modifications erstwhile you’re ready. For much accusation connected RARRA, commencement with Why Focusing Too Much connected Acquisition Will Kill Your Mobile Startup.

Final thoughts

One of the astir close definitions of a startup comes from Eric Ries: “A quality instauration designed to bring thing caller nether conditions of utmost uncertainty.” That constituent of uncertainty is what makes focusing connected the close things perfectly captious for startup success.

And this is what AARRR offers: focusing connected the metrics that truly substance to physique a sustainable business. This model whitethorn not beryllium implicit oregon perfect, arsenic RARRA proponents claim. But it’s a truly bully commencement if you usage it properly.

As you spell on and larn however to physique and marketplace a startup, you’ll spot a batch of the-only-thing-that-matters benignant of stuff. Take each that with a atom of salt. I judge you should effort things yourself and spot wherever they take you.

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