What is AARRR framework?

What is AARRR?

AARRR is a set of metrics used to track and influence user behaviour. AARRR helps to improve your marketing campaigns. Prospective buyers start at the acquisition stage. Only a small percentage of prospective buyers, eventually become paid customers of your product or service.

AARRR stands for acquisition, activation, retention, referral and revenue. The AARRR metrics was first introduced by investor and entrepreneur Dave McClure.

What happens at the different AARRR stages?

Who uses the AARRR metrics?

In my view, these metrics can be used by anyone who is involved in growing a business. This list includes entrepreneurs, CEOs, marketers, product managers and customer success teams. The ultimate goal of any business is to provide value for the customer and capture value for the organisation.

The AARRR framework is typically used by Software as a Service (SaaS) companies to advance their SaaS marketing efforts. However, the framework can be used by organisations in all industries including B2B.

Is the AARRR framework valuable for business growth?

I find the AARRR framework valuable for business growth. AARRR focuses on metrics that matter for business growth, as opposed to vanity metrics (e.g. search impressions, social media likes).

AARRR helps to improve your marketing and sales efforts. AARRR framework helps you to move your customers from acquisition to activation to revenue. This framework provides a structure for your SaaS marketing planning process or to create a marketing plan.

How to improve your marketing using the AARRR metrics?

You can ask yourself questions to audit and analyse your marketing campaigns using the AARRR framework. This will help you to analyse which stages of the AARRR framework, your business is over indexed on?

Are you putting all your efforts into the acquisition and activation stage and not focusing enough on the remaining stages - retention, referral and revenue? This could be the reason why prospective buyers are excited about trying your product but they don't go onto convert from a free user into a paid customer of your product or service.

1. Acquisition

How many prospective buyers are visiting your website or SaaS product?

Channels to consider for distributing your message to prospective buyers include search, social media and email.

A few content types to attract visitors include blogs, videos, social media posts, free trials etc.

2. Activation

What actions do you want your buyers to take to experience your product or service?

Do you want your prospective buyers to

1. Sign up for a free trial?

2. Sign up for a free tool?

3. Sign up for a newsletter?

4. Fill out a contact form?

5. Watch a product demo?

3. Retention

Do your prospective buyers come back & re-visit your product or service over time?

If you are a service based business, you could ask yourself the question, are prospective buyers opening and engaging with your emails? Are they reading the latest thought leadership from your business?

If you are a product based business, are they revisiting your product once they have signed up for a free trial? If they are, which features are they using vs not using? This provides your prompts to figure out the why behind certain product features not being used by your target audience.

You will then go onto learn the reasons for poor retention of prospective buyers. You will then take appropriate actions to improve a potential customer messaging problem, improve the product itself or change your targeting to a more relevant audience who needs your product or service more than others.

4. Referral

Do prospective buyers like your product so much that they tell their friends & colleagues about it?

According to Gartner, customers are more than half way (57%) through the purchase process before they have a first meaningful contact with a seller.

Today, your prospective buyers are not learning about your product or service from your company's sales representative.

Instead, your prospective buyers are making buying decisions based on, third-party review sites, peer-to-peer recommendations, customer referrals, word-of-mouth and mentions of your company on social media.

Word of mouth publicity is an important method for your business to acquire prospective buyers. Delighting your customers with exceptional customer service is the easiest way to get repeat business and referrals.

5. Revenue

Can you monetise any of the above mentioned behaviours?

If activated users are not becoming paid customers, you could then investigate and analyse the reasons.

Maybe, your prospective buyers don't consider your product or service to be value for money. This provides you data to fine tune your digital marketing campaigns and messaging at different AARRR stages.

Conclusion

The AARRR framework is used to track and influence user behaviour. I find the AARRR framework valuable, as they focus on metrics that matter for business growth.

AARRR helps improve your marketing efforts. It helps you to analyse which stages of the AARRR framework, your business is currently over indexed on. This provides you an input to make necessary changes to your digital marketing campaigns.

What are you waiting for? Go ahead! Create a SaaS marketing plan for your business!

You don’t have to do this alone! Let’s talk about the work that’s important to you and get started!

Written by Anees Misbahudeen

Founder & Digital Marketing Director, INNMCO

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