What Is the AARRR
AARRR is a framework for optimizing and analyzing the performance of a product or business. The acronym stands for A-acquisition, A-activation, R-retention, R-revenue, and R-referral. AARRR framework assists businesses in discovering key stages of their customer journey, and to measure the stages to identify when, where, and how a customer implements a desired action with the company’s product.
How Does the AARRR Work
It works by;
- Identifying the right conversion metric for the five stages of customer behavior: This entails identifying the types of data a company wants to collect for each of the five stages of AARRR metrics- Acquisition, Activation, Retention, Referral, and Revenue.
- Establishing ways to track and analyze these data: As the customer journeys through each stage, the right computing tools should be utilized for collecting and analyzing data obtained from each stage.
- Test-running all the stages of customer behavior to find out better approaches: Run A/B tests to identify areas where customer engagement needs improvement. An A/B test compares the performance of two items against each other. For instance, the items could be apps or business products. After running the test, the item that receives the most customer engagement wins the A/B test.
- Utilizing these AARRR Metrics to improve business strategy: For instance, items that are not receiving customer engagement at each level of the AARRR framework would need a better marketing initiative to sell.
How to Apply the AARRR Framework (with Examples)
The ultimate goal of applying AARRR is to convert people to loyal buyers who will tell others to buy your product as well. A company deploys the AARRR metric to collect data from each stage of the customer’s behavior towards its product. Analyzed data shows different levels of customer engagement towards that product. Also, the data would tell at what point in AARRR stage does a product stop receiving much engagement. This implies a better strategy has to be used on the affected product.
Let’s see how AARRR metrics is applied at each of 5 stages of a customer’s journey using, for instance, a skin beauty product called Tura beauty soap as a case example;
The acquisition is the stage where the customer learns about the product. The company identifies who and where he/she comes from, whether from social media where the beauty product is advertised, or the company’s website. At this stage, why and where the customer comes from is analyzed on AARRR Metric. If need be, more tactics are used to attract more people to the product. Some of the eye-catching tactics should be creating SEO content, vlogs, video content, and running social media ads. Then using ads impressions, clicks, views, and shares as metrics to quantify customer engagement.
For instance, the company that produces Tura beauty soap discovered that about 80% of people who visit their Instagram page to know about the soap were 18-45 years black women coming from Instagram and Facebook. So it decided to focus their ad campaign on Instagram and Facebook to acquire more views and visits to its product.
Activation is the AARRR stage where the customer discovers the uniqueness of the product and now considering whether to use it or walk away. Tactics such as writing promotional articles, creating land pages, etc., on the product could keep the customer in the process.
There are times when the activation stage needs improvement to move the customer down to the retention stage. These improvements are about reducing the steps customers have to take to buy the beauty skin product, improving the site performance, and giving out discounts.
For instance, while the Tura beauty soap company was having more views and likes, it added landing pages on its social media pages. The landing pages displayed short content and video describing why the soap is different and where interested women would buy the soap. Emails and contacts of those interested women were collected in the process of filling a form on the landing page. Personalized ads were targeted at those women via their contents.
At this point, the customer is actively using the product. Now, it has become paramount to ensure he/she comes back often to use it. To keep him/her coming back, granting special offers/bonuses, sending out an email newsletter, etc., would be the right way to go.
This AARRR stage is important because it is the core strategy of the growth model. It drives other stages before it. It drives monetization, gives a competitive edge, and perhaps shortens the pay-back period. Giving you the chance to re-invest and make more money.
So at this point, about 60% out of the interested women who came into the buying process bought the Tura soap. Out of the 60% , 45% returned as regular buyers. Special offers such as buying a “pack of the soap to have one free” and occasional discounts were given to them to encourage them to keep buying.
In this AARRR stage, the customer is loyal to buying the product and the next move is to encourage him/her to engage other people to buy (use) the product. If that works, AARRR metrics are utilized to measure the number of people actively engaged by the loyal customer. Tactics such as creating affiliate programs, and incentives for loyal customers would definitely retain existing customers and make them get other people to buy the product.
For instance, as profits kept rolling in, Tura beauty soap company introduced an affiliate program where the users would have to make a short video content of themselves testifying the uniqueness of the soap. The users were asked to tag friends, and family to the video. Cash prizes and free Tura soaps were given to users whose video had more engagements. This strategy increased the sale of the product by 20%.
Here is the final AARRR stage. A stage where the company enjoys the profit coming from many people who are using its product and constantly buying it. Tactics such as giving out discounts, and offering quality customer support can keep them buying as long as possible.
At this juncture, the company was having a better customer patronage. The returning buyers increased to 55% from 45%. More sales agent and distributors were employed to supply the soap to various beauty shops. The company partnered with Instagram and Facebook influencers to keep advertising its soap in a large scale.
AARRR template is a visual tool already created to help the company or business strategists use the AARRR framework seamlessly. There are different AARRR templates out there, but the one created by Boardmix is highly recommended because it has some uncommon features added.
Boardmix AARRR Template- Highly Recommended!
- AARRR templateof Boardmix stands out as the choicest due to its high flexibility- All aspects of the template are easily editable with shape, text and color tools, and it responds to shortcut commands rapidly. High-resolution images can be imported into it. Templates can be customized to any type of layout based on the preferences of the company using them. It can be exported in any type of file format and can be shared with anyone concerned about the AARRR processes.
- BoardmixAI Assistant enhances efficiency- The AI assistant rapidly provides practical answers to any question regarding the use of AARRR template. You can use it to collect and analyze data, get inspired and generate diagrams automatically.
How to Use the Boardmix AARRR Template
- Visit the Boardmix website and log in or sign up.
- At the homepage, click Templates, scroll down, and select the AARRR template.
- Use shape tools, sticky notes, text, and color tools situated at the left part of the interface to write on or customize the template into any desired layout.
- Engage AI assistant at the top left corner for content creation or practical answers to any AARRR process.
- Templates can be exported in various forms. It can also be presented and shared in real-time with other parties so that concerned individuals can make inputs.
- If popular opinion is needed in the form of a vote, then vote tools can help to achieve that.
FAQs about the AARRR Framework
Some common questions about AARRR may not have been answered in simpler terms. However, in this section few of them would be answered for clarification's sake.
What is AARRR used for?
- AARRR helps business managers to understand and analyze customer journeys- this will aid them in identifying essential touch-points and potential improvements.
- Data extracted from AARRR metrics is used to optimize business strategy- this will consequently enhance customer acquisition, activation, and retention strategies.
- It measures all levels of business performance-by providing a framework to measure key metrics at each stage, hence, aiding the effectiveness of marketing efforts.
- AARRR assists in referral program improvement-it consequently encourages satisfied customers to bring in new buyers into the business.
- It is used to build accountability and focus- making each member of the team focus on specific goals for each stage in the customer journey. This will build strong collaboration and transparency.
What is the difference between AARRR and heart?
- AARRR is a framework that considers metrics from a business point of view while HEARTfocuses mainly on the user experience – the former aims at converting potential customers to active loyal buyers, but the latter focuses on how customers should see the product on sale without acquisition or revenue strategy in view.
- AARRR revamps acquisition effort if it doesn’t yield results, while Heart helps to understand and optimize user experience.
What is pirated metrics?
Pirated metrics is a five customer behavior metrics that a company should be tracking: acquisition metrics, activation metrics, retention metrics, referral and revenue metrics. AARRR metrics is called pirated metrics because, if you pronounce the acronym out, it sounds similar to that pirate phrase, “Arr, matey!”