Introduction to AARRR metrics for UX professionals

The idea of AARRR metrics, a.k.a. 'pirate metrics' is widely known in the startup industry and came from Dave Mcclure. The AARRR process can be applied to any product. With this process, you will study the product from five aspects (AARRR) and determine what to concentrate on to get the best outcomes by putting less amount of effort.

What AARRR is?

1. Acquisition

2. Activation

3. Retention

4. Revenue

5. Referral

You can use AARRR to check how your product is performing in each stage.

Acquisition - How customers find the product?

The Acquisition means how user or customer reach to the product. How are you planning to get new users? It is mainly the field of marketing like:- SEO/SEM, Email marketing, Social media marketing, Paid advertisements, Direct marketing etc. If you focus on Acquisition, you are putting an effort to get the right users to find your product.

To measure the Acquisition performance, you can reach to analytical tools like Google Analytics to see how many users you are getting through PPC, Organic, Email, Referral, etc.

The data you are analyzing enables you to have an idea about the major issues you might have with the product.  Researching and comparing this data and your business modal with our competitors will be beneficial.

Activation – How users use your product?

Activation is about getting the visitors to do some actions on your product and use the product. For example, if you selling SAAS solutions then the activation step will be signing up to your platform or subscribing to the newsletter to get updates about your product.  

UX has the tools to boost the activation process. If you focus on activation, you need to look at the following:

§  How was the user's 1^st experience on your product, You can carry out interview/usability tests to confirm the issues users are facing during the activation process,

§  Are they using the product? Are they fulfilling the business goals?

Retention – do you have repetitive users?

Retention is a step to measure users who keep coming back to use your product, or they just visited once and then leave forever?

If you want to retain users, then you need to focus to transform your 1^st-time users into repetitive customers. Make sure users spend more time on your platform and making it a habit to use your product. If a lot of people are dropping off your product after they have started using it then evidently something might be incorrect either your product or the message. You need to analyze why users are dropping off. Keep improving the product to retain existing customers. Many product companies don’t understand that retaining an existing customer is much cheaper than obtaining new customers.

In the words of Bill Gates: "Your most unhappy customers are your greatest source of learning".

Revenue – Are you generating enough revenue?

In AAARR revenue is about making the maximum revenue from your product. That means we have already implemented AAR (Acquisition, activation, and retention) and we have visitors coming in and you are converting them to returning customers. Customers are signing up for your offerings and your product has started generating revenue.  Now you want to generate more revenue by finding new ways to monetize your product.

So what can be the best ways to increase revenue?

By optimizing conversion rate, sales funnel, improving your Customer Lifetime Value (CLV) and reducing your Customer Acquisition Cost (CAC). You can also find new ways to monetize the product. For example, Facebook and Instagram started out as pure social media and non-monetary platforms, They adopted the advertising business and become successful.

Referral – Is your customer advocating your product?

 Does your user recommend your products to others? Do they find your product more usable than your competitor? Does your user discuss your product on social media? 

The best way to find growth is through referrals. Why would you spend a large amount of money on marketing of your product when referrals can help with organic spreading for less or no investment.

To really run referrals you need to have an efficient process. Like: Dropbox introduced a referral program on early-stage was one of the main driver of growth. Dropbox grew 3900% with the simple referral program.

 

Summarizing, the AARRR metrics is the simplest and most efficient way to look at improving your business and measuring growth. As a UX designer, you should follow AARRR metrics and keep improving the user experience based on the results.

About Author

Praveen Sharma 
HI am a UI/UX Designer, Having 13 years of experience in Web Development, UX/UI Design. Working with HCL Technologies as a Technical Lead UI. 

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