AARRR
Dave McClure’s Startup Metrics for Pirates is a good framework for thinking about macro metrics:
- Acquisition
- Activation
- Retention
- Revenue
- Referral
Focus on them in this order:
- Activation, Retention (happiness)
- Revenue (sustainability)
- Acquisition, Referral (virality)
This order is the Ash Maurya or 37signals order: charge from day one.
Most of our clients are early stage, focused on getting a product built that makes customers happy and keeps them around. That means we want to:
- Instrument a dashboard
- Gauge customer happiness
- Test customer adoption (# of users, # paying)
- Automate emails after sign up (3 days no activity, 30 days free trial ending)
Here’s an example of a marketing dashboard for pbb.fm:
Once customers love the product and know what conversion rates currently are, we’ll help you optimize conversion and build referral mechanisms into the app at points immediately after users have a happy experience.
At that point, we can help you measure a viral growth coefficient. If it’s greater than 1.0, you have a hit on your hands:
X * Y * Z- X = % of users who invite other people
- Y = average # of people they invited
- Z = % of users who accepted an invitation
Again, drive referrals after users have a happy experience.