AARRR Framework Guide: A Step-by-Step Overview of Channels, Tactics and Metrics

What is AARRR

AARRR is a marketing and product framework based on a conversion funnel. It can be used to manage product growth and improve user experience by streamlining marketing and product processes. The framework helps build a transparent metrics structure for all members of a team and answer important product-related questions.

AARRR stages

  1. Acquisition
  2. Activation
  3. Retention
  4. Revenue
  5. Referral
AARRR guide

The AARRR framework is equally useful for start-ups looking to develop their business models as it is for seasoned companies seeking a better understanding of their user journey with a view to scaling up business or tapping into new markets. The AARRR metrics cover several stages of the customer lifecycle, and each user action has its own KPIs.

Applying AARRR: a mobile game case

Acquisition – the user sees a game ad on social networks and opens an app store.

Activation – the user downloads the game, completes the tutorial, and learns key mechanics.

Retention – the user returns to the game once or twice per day over a four-week period.

Revenue – the user purchases in-game currency.

Referral – the user invites their friend to the game using a referral link to obtain bonuses.

Now let’s look at each of the AARRR stages:

Acquisition

Acquisition is the stage where the user learns about the product while the business identifies the audience profile and acquisition channels.

Questions to ask at the Acquisition stage

Key question: Where do the customers come from?

Additional questions:

Acquisition channels

Acquisition tactics

Metrics for measuring acquisition 

Activation

Activation is the stage where the user has an “Aha!” moment and realizes the value of your product after performing a certain action. This moment determines whether the customer gets drawn to your product or walks away from it.

Questions to ask at the Activation stage

Key question: How do interested customers become active?

Additional questions:

Activation channels

Activation tactics 

Metrics for measuring activation

Retention

Retention is the stage where you need to encourage users to return to the app and perform certain actions. Retention of potential customers requires an individual approach, so segmentation and personalization are key here.

Questions to ask at the Retention stage

Key question: How to retain an interested customer?

Additional questions:

Retention channels

Retention tactics 

Metrics for measuring retention

Revenue

At this stage, customers make a purchase, and it is a key yardstick by which a product's effectiveness from a business perspective is measured.

Questions to ask at the Revenue stage

Key question: How to convert a user into a paying customer?

Additional questions:

Revenue channels and tools 

Revenue tactics 

Metrics for measuring revenue

  1. ROI – return on investment in product development.
  2. ARPU/ARPPU – average revenue per user / per paying user.
  3. LTV – lifetime value, i.e. revenue generated over the entire time the customer uses a product or service.
  4. CAC – customer acquisition cost.
  5. AOV – average order value, calculated as revenue divided by number of transactions over a certain period.
  6. Revenue.
  7. Paying users.

Referral

At this stage, news of the product is spread through word of mouth.

Questions to ask at the Referral stage

Key question: How to encourage customer referrals?

Additional questions:

Referral channels and tools

  1. Reviews;
  2. Brand advocates;
  3. Referral programs;
  4. Share buttons.

Referral tactics 

  1. Review requests via email.
  2. Rewards for recommendations.
  3. A referral program rewarding customers for each lead.
  4. Share buttons in your owned media (blog, social media page, etc.).
  5. Nurturing brand advocates: interacting with users who write positive reviews, setting up closed chat groups for loyal customers.

Metrics for measuring referrals

  1. Percentage of users who referred their friends.
  2. Percentage of users acquired through referral links.
  3. Percentage of purchases by referred users.
  4. K-factor – how many new users each existing user introduces to your app.
  5. NPS – net promoter score.

aarrr metrics

To sum up

The AARRR framework is about analyzing steps, needs and changes at every stage of the customer journey, which is a great way to ensure sustainable and manageable growth of a business.

These stages do not exist in a vacuum, meaning each new stage should build on the results of the previous one. Retention cannot be viewed in isolation from acquisition and activation, whose metrics still need to be given proper attention. However, tracking every last metric is hard, and it would be best to relegate that job to an analytics system such as MyTracker.

MyTracker supports all the key metrics for each A and R in the AARRR framework. Track performance using preconfigured dashboards and automated reports, compare your metrics, forecast revenue by user cohort and tailor offers to boost your app’s revenue by as much as 10–30%.

Tags: product analytics