When you first see the term AARRR, you might think “that sounds like something a pirate would say”. Well it’s not as daft as it sounds. AARRR Metrics are also known as Pirate Metrics for precisely that reason. In this guide we will look at AARRR Metrics and show you how they can be used to benefit your business.
Summary: 5 Minutes read, Level: Expert
The acronym AARRR is easy to remember, but what does each letter stand for?
This can be easy to remember, but what does each point actually mean? We will explain this to you.
Now you know the basics of AARRR. It’s far from rocket science, but it is a key method in maximising both your business and the potential of your business.
Each stage of AARRR represents the behavioural aspects of your customers – from them first becoming aware of you to spreading the word to spending money. Any successful business these days will be using AARRR Metrics and you can do it too. The key is to ensure that you don’t just use some of the metrics, but that you are correctly optimising all five of them.
In understanding AARRR Metrics, you will be able to better see what you are doing right or wrong in your business. The use of these metrics will help you hone your business into a finely-tuned machine. Your startup will progress beyond being a startup if you correctly utilise AARRR Metrics.
We want to break down these 5 metrics on your product and look at them separately, then analyze and monitor them so that we can optimize them. A successful startup is one where they are able to optimize every single one of these 5 metrics.
It’s important to understand about AARRR, because only when you understand all the metrics, you will understand where exactly is wrong with your startup, so you don’t guess and make the wrong assumptions. When you understand AARRR, you can become a startup doctor, because you will know exactly what or which part is wrong, and then fix it.
We’ve told you what the letters in the acronym AARRR stand for and explained the meaning of each of the metrics. Now we will look at each of these points in more detail and tell you how to best utilise each of them.
How are you attracting new customers? You can advertise, you can use social media, you can create an email mailing list. There are many ways in which you can do this. You can even use more than one method. Just make sure you monitor which way is most successful for your business.
This is especially important. You’ve made potential customers notice you. Now you need to make them say “aha!” and really pique their interest. It can be a leap between Acquisition and Activation, but if you have good products or services and you have been honest in your promotion it will work well. After all the customer is there because they were interested in what you had to offer.
You want to keep your customers and not just limit their experience to one visit or purchase. Keep ahead of the game with promotions and a variety of different products. Getting someone to spend money once is easy. Getting them to do it again and again is more challenging.
This is where you can get your customers to work for you. Word of mouth is one of the best free advertising campaigns you can run. But how do you do it? Customers need an incentive. Offer a discount or a voucher to customers who refer a friend who then spends a particular amount of money. This can really snowball.
The big bit for your business – the bottom line. Are you making profit? Are you just to say breaking even? If all of the other four metrics are implemented correctly then this should work out well too.
If your startup is struggling, even after implementing AARRR Metrics, then something is wrong. Something isn’t wrong with the use of AARRR, but something has been overlooked. The use of AARRR should help you to identify your business’s strengths and weaknesses and allow you to correct where necessary.
In times gone by if a startup didn’t make money, it would have been abandoned as a failure. The owner of the business would wrongly assume that their idea didn’t work without examining the reasons in more detail. Now, with the use of AARRR Metrics, it is possible to see where it’s going wrong relatively easily. It’s also possible to see where it’s going well, for which you should pat yourself on the back.
You can adjust your business model accordingly to make a correction. Use analytical tools to help you see where you need to improve your use of AARRR Metrics.
There has possibly never been a better time to take the plunge with your own startup. The marketplace might be crowded in some areas, but that is absolutely not a reason to be put off. The harsh reality is some of these start-ups and businesses will fail. Why? Because they don’t know what you know. So many are not using AARRR Metrics and are just winging it. This is where you step in with your knowledge. Where others are failing, you can succeed. Implementing AARRR Metrics correctly will be the key to your success. Don’t delay, start using Pirate Metrics today!