Hoist The Colors High
Once upon a time, there lived startups that relied only on their own hook wits and smarts to get them through the hard times of blood and sweat building their hopes on a lucky chance. There was no YCombinator around to turn to for support and advice nothing but emboldening of their foes. Some companies would find themselves blindsided by competitors they never imagined existed. So we are always on the lookout for viable digital frameworks, especially relating to the metric system, as they really help simplify the complexity of intermediate steps of our modern business environment. Complexity can lead to a severe lack of predictability in software projects. That’s why entrepreneurs should be driven by a deep need to ask the right questions and find simple answers, like how can I measure and adjust the balance of each step of my funnel to grow quickly and expand the customer base and optimize its customer relations? One simple answer that comes from pirate lingo: AARRR. AARRR is a wonderful framework to help you better understand the thinking of the other side.
The success of pirates venture during the Golden Age of Pirates was largely to do with the skeleton of art of war that also included strategy, tactics, and techniques of combat, never mind bold as brass insolent conduct and a lot of luck. It was a risk and it paid off. The sea was their world and getaway where the odds of being caught off guard are pretty small as it is three times the size of land, which makes pursuit and capture a bit slow off the mark and more difficult throughout the deep vast sea. Their force wasn’t equipped for fighting on land only time you would see pirates there was when they wanted to reap the fruits of the victory or stock up on vital provisions for their stealing adventures and daring escapades.
Yet pirates were bound by a code of conduct. Pirate ethics, attitudes and ideas were born from ethnical and cultural collective diversity and strongly influenced by a maritime law and egalitarian life at sea. A rigid code of ethics included whacking up the loot equally, distribution of wealth, democratic group decisions, honesty, fraternal assistance to comrades in arms and loyalty.
A reign of the jolly roger terror, pillaging and plundering across the oceans kept in awe all civilized world, but when tracking down ships, pirates chose tactical manoeuvre over plunging into bloodshed. In a word, they’d rather drag themselves into bar brawls than in a sea battle. Being badass pirates they were well informed of the trade routes, the going demand for goods, island policies, and they had snitches staked in every port. Armed with this intel, the pirate crew voted on whether they seized a ship or let her through. Once the pirate crew decided a ship was a hoard of treasures, they still didn’t attack. Yep, that's right! If push comes to shove then and only then they might show their colors and engage in battle. Pirates depended on the a devastating injection of speed, surprise, and a fair gotcha!
As far as AARRR are very agile and actionable engagement metrics, you’ll be able to win prizes galore as soon as you implement them. The framework doesn’t require much effort or any technical knowledge that’s why it is usable and accessible to a larger number of startups. It improves your funnel's performance, and enables you to optimize customer lifecycle and translate chances into actions. AARRR is an excellent tool for data-driven decision making, in exemplification of some of the the most powerful startups choices.
The AARRR framework is distinguished by naturally divided 5 steps. The aim is to ascend by hopping from rock to rock moving people from one step to another, from signing up to your product Acquisition, to paying you money Revenue.
You put something that you want people to see and sign up to in a particular place, so that people can notice it unawares. In a SaaS product, you generally want people to register for a Free Trial, but not for a vanity fair. Even if you have 10,000 visitors a month it doesn’t mean a thing unless you’re making it big in the publishing world selling the ratio of pageviews that an Internet advertisement receives for CPM rates. The principle that the greater number should exercise greater power is merely acceptable in this context.
Your should focus on you acquisition numbers at the starting point, they indicate which of your distribution channels are working. Where are the slow and subtle changes and where is a steady stream of visitors flowing rapidly. A moderately low volume isn’t necessarily a bad thing, following acquisition procedures throughout the whole AARRR model it can often surprise you by being the most profitable and efficient.
To be extremely pleased with response rates you should be checking how engaged the Acquired visitors were, otherwise known as bounce rates. For example, on average the ‘bounce back’ rate would be about four to six percent. Acquisition is sometimes devided into 2 general stages: landed and engaged. Once a user checks several pages, or runs eyes over at least couple of blog posts, or stays for 20 seconds, they can be considered as engaged. Until a visitor has undegone rules of activation procedure and selection criteria for engagement, they’re stuck in the landed category or bounce never making it to a qualified lead.
First blow is half the battle so squeezing off the first shot is making users to signup on your website but it’s only the first beat of the bar. Visitors are never predictable they may just sign up and never try your product. They need to be predisposed enough to be Activated. The goal here is to take people on board of your jolly boat so that those who log in can clearly understand your value proposition and all the work you do to stack up against other products and the way it might help them to attain their goals in life. You can email people who never log in or try to call these “cold prospects” to remind of your offering and induce them to stay.
Newly acquired users they are going to see the inside of your app and if it has no beginner leadthrough but a complex UI with poor onboarding they are most likely to bounce off.
Many SaaS startups usually subdivide Activation into several funnel stages like initiating the first campaign, integrating the embed code, releasing their first report. Try to choose the correct one or two activation stages and stick to these KPIs.
It’s important to focus on your Activation performance long before the beginning of smth else like new features or rock-steady account subscription and payment integrations.
A user most probably won’t enter credit info and buy what you you are selling if they haven’t activated yet. Once users have given of so generously their time and focus, they will have developed a mental concept as a consequence of the process of perception of the value of your product and will be willing to part with cash to continue experiencing that value.
Once you’ve brought in a bunch of motivated users, and they’ve all recognized and used your product, initiated their first invoice and built their first project you need to focus on making those users make a return visit systematically.
The retention of something is the keeping of it so we track the cyclicity coefficient of our new users logging in on a weekly and on a monthly basis. We trace back the number and the duration of sessions that each user has logged, which indicates their relationship between their frequencies of use. As a function of your SaaS app or mobile app the concept of retention is relative varying from daily, weekly or monthly use requirement.
Referrals, which particularly involve people who know each other well and believe that their contacts and friends could also reap tremendous benefits from your product, are the highest conversion rates you will ever bring in your app introducing the possibility to expand your userbase exponentially.
Everybody wants to be the chosen one to discover and implement that value in the community. In couple of months they’ll be like “Yeah, and it’s all owing to Johnny, he told me about it”.
There are some more business-like drivers for referral. Dropbox is an outstanding example of its kind: refer a friend and we’ll provide you with more volume of storage space on your account for free. These transactional bonuses conduct a great work in consumer products.
At this stage of the referral game, it’s vitally important to ensure that all connections between exposure and viral mechanisms like share link buttons, promo codes, affiliate links, invite a teammate are in place and properly calibrated. Once you get some of these and lots of eyeballs rolling, you can proceed with A/B testing and give a dry run to check the performance of your referrals to see how those referrals actually turn into paying customers.
Tracking revenue transaction is a preventive measure taken to eliminate vanity metrics in your startup. It allows you not to be caught off guard by the speed of the events such as subscribing to the blog, or opening an email, or clicking on some tweets, and seeing how those adopted attitudes anchor to the bottom line.
It’s extremely valuable to be able to lay open the results of an A/B testing that has continually doubled the price of your product region by region. No doubt, conversion rate dropped, the number of transactions dropped, but both MRR (Monthly Recurring Revenue) and LTV (Life Time Value) seem to have increased absolutely and in comparison with other categories.
It might be really risky if you become enticed by revenue too soon. While implementing dedicated revenue functionality can be pricey in regard to your total MVP effort cost it is also intended to put you on the wrong track in terms of fitting product market preferences and needs.
Such a thing can undermine the foundations of an early startup. You need to have the game in your hands and be sure that you’ve discovered your unique value proposition, drew irresistibly the attention and interest of users and got them so passionate about it that they want to share this advantage with their friends. Then, and only then, you are perfectly approaching the revenue growth.
Why Should Startups Use AARRR metrics?
What it all boils down to is that the power of AARRR is marked by plainness and simplicity. The more functional a model, or an interface, or control of a process or system might be, the more likely you’d want to have it and be able to use it. There is no need in dealing with the state or quality of being intricate or complicated if no one is buying it.
AARRR metrics are cultivated for the purpose to issue guidelines for those entrepreneurs who are in the best original condition and want to take action and boost into the orbit.
KeyUa team chooses AARRR as the inspiration because it paves the way for startups to grow. We needed a a whole new approach that any entrepreneur can understand, and that every entrepreneur could use, without slaving over reports. So go do something about it: leave no avenue of AARRR funnel unexplored then get out of your data and into a model of efficiency.