AARRR Metrics Will Help You See More Clearly

"Pirate Metrics" AARRR good for business

Being that "Growth Marketing" is all-encompassing, supporting every stage of the customer journey, it can get really messy really quickly without the proper tools for ranking and organizing. The more you have going on, the more challenging it becomes to manage and prioritize new initiatives. This could lead to a lot of wasted time.

The Case for Pirate Metrics: Why Digital Marketing KPIs are Not Enough

Digital marketing KPIs and other types of "smart KPIs" can sometimes steer us off course if they're not beholden to certain standards of achievement — think of how many different definitions there are for Marketing Qualified Leads (MQLs). It's tough to set digital marketing KPIs around something that defies a single definition of success. 

Enter AARRR Metrics.

AARRR metrics, also known as Pirate Metrics, help solve this problem. Instead of specific digital marketing KPIs, AARRR metrics offer a universally simple KPI achievement standard that can be applied to any industry, business model, and growth marketing experiment.

Here's how it works AARRR Metrics / Pirate Metrics work:

AARRR Metrics & The 5 Stages of the Customer Journey

AARRR Metrics / Pirate Metrics target a specific stage of the customer journey. By breaking down the customer journey into these 5 stages, you'll have the ability to quickly and easily isolate where in the customer experience break-downs and opportunities are occurring. 

The stages of AARRR Metrics / Pirate Metrics and their simplified definitions are:

1. Acquisition metrics measure from stranger to lead
2. Activation metrics measure - from lead to willing participant in the sales process
3. Revenue metrics measure 1st-time customers
4. Retention metrics measure engagement retention and renewals, including life-long customers
5. Referral metrics measure expansions and external introductions or testimonials
   
   

How AARRR Metrics help you prioritize ideas over other digital marketing KPIs

When leveraging AARRR Metrics / Pirate Metrics, every idea that gets put on the board should fit into one of those five stages of the customer journey. By doing this, you make it easy to identify the strategic purpose of any experiment. For example, if there's a problem with existing CUSTOMERS canceling their subscriptions, then you're going to want to zero in on the ideas that address RETENTION metrics. 

If you're like us, you have dozens of ideas (maybe even hundreds over the years) waiting for the right time to be deployed. By labeling those ideas using the 5 stages of AARRR Metrics, you make it easy to sort out anything that could otherwise be distracting.

Here's a quick case study to illustrate

• Business: Marketplace for Users to find healthcare practitioners
• The current state:
  • MVP was just launched
  • There are no leads except a couple of purchased lists
  • Proof of concept has yet to be established
• The MVP:
  • Practitioner & User attraction plan (Paid ads, SEO, email)
  • Fully functional website app marketplace
  • Separate portal experiences for Primary audiences (Users & Practitioners)
  • Primary audience Activation sequences (multi-stage email sequences + in-app tutorials)
  • Payment links and automated payment distribution

The fully-developed MVP needs traffic to start working out the bugs and identifying opportunities in the different sequences for improvement. But, despite all of the research and planning and development and approvals and effort to stand it up, a major stakeholder pulls the plug because they're convinced the email sequences will work better than they might today if we change everything about them.

Before long, desperation kicks in - Where's the ROI on all of this work???

The Conclusion on Using AARRR Metrics  Over other Digital Marketing KPIs

When we applied AARRR metrics (aka "pirate metrics") to all of the experiment ideas and leveraged those stages in the conversations around prioritization, we were able to take a truly LEAN approach to growing.

With an MVP fully functional and launched, we should have been focusing on acquisition metrics, but gut instinct and decision-making insecurity were driving us to other letters in the AARRR metrics, like activation metrics and even revenue metrics. This meant every idea that took the lead was prioritized based on somebody's unsubstantiated, totally anecdotal opinion. At one point it even helped us ward off Retention and Referral metric-focused ideas.

Labeling everything with the AARRR Metric / Pirate Metric instead of focusing on other digital marketing KPIs helped us get us moving in the right direction almost immediately. Pairing up AARRR Metrics with ICE Scoring, we were able to effectively steer ALL contributions (no matter the source) to the appropriate spot on the roadmap.

To learn more about AARRR pirate metrics and how to apply this universal standard for service, sales, and marketing KPIs to your business, check out our Growth strategy certification. We have an entire lesson dedicated to what it means and how to leverage it: