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AARRR, The growth hacker funnel to convert

aarrr

What is it and what is it for ?

It’s means Acquisition, Activation, Retention, Referral and Revenue. It can be represented as a conversion tunnel. It is a simple method where you only have to follow one metric per step.

AARRR - Conversion tunnel

5 steps to measure your activity and improve them over time:

1.Acquisition2.Activation3.Rétention4.Referral5.Revenue
The number of people acquired divided by the price it cost to acquire themNumber of people acquired as a percentageRepresented by a cohort to give itself a vision over time of its usersThe number of sharing of your content with the share buttons, tweet, etc…This is the turnover for a paid product. For a free product, it is less obvious since it is necessary to find your metric

Aarrr : The Acquisition is based on techniques to attract Internet users to its site

Here are some examples:

  • The use of robots that trigger notifications to Internet users who are on social platforms.
  • Advertising on Facebook, Twitter, etc.
  • Content marketing.
  • Emailing actions.
  • The creation of a blog.

It is a question of finding the innovative technique that suits you best. To find it, you can follow these three steps:

  1. Define a strategy.
  2. Test it.
  3. Measure its impact.

In this way, you stay in the factual and reduce the areas of uncertainty. To compare well, launch two campaigns in parallel.

The challenge is to find the channel that will take 20% of your time and bring you 80% of customers (Pareto’s law)

aArrr : Activation is the success of having an action performed by an Internet user

First of all, it is the number of Internet users who have performed an action that you want compared to the number of Internet users who came to your site. Also called conversion, it is a question of defining the action to be performed because it is different according to the service.

For a blog or landing page, it is the transmission of an e-mail that is searched. On the other hand, for an e-commerce site, it is the validation of a basket containing at least one product.

Then, it can be a question of optimizing the home page and the landing page. The difference between these pages is that the landing page is specific to the targeted users and the home page tries to convert non-targeted users.

In the case of the Landing Page, you present a service to Internet users that they cannot yet use. When they give you their email, they express their desires and you can keep them waiting.

attract internet users to its sites
Create a frustation that remains to be cultivated until service is ready

Here are some activation techniques:

  • Customer testimonials are delighted to have purchased your solution.
  • The number of Internet users consulting the same offer.
  • The competition of an Internet user with others to put him under pressure and encourage him to act.

aaRrr : Retention, the mechanism to get customers back on the site

First, it is easy to imagine its service as a “pierced seal” in which thanks to the acquisition and activation techniques we add liquid. It is in this phase that we will try to close the gaps to keep our liquid.

Indeed, to achieve this it is necessary to create habit among the Internet user. This is necessary to generate a margin for e-commerce sites because the acquisition cost is very high.

For a social network like Facebook, it is difficult for an Internet user out of habit to move to another social network unless a huge effort is made. This retention is facilitated by the fact of finding all your contacts in one click.

To properly visualize retention, we must use the cohort which consists in segmenting users according to their subscription dates

To show what a cohort looks like I used as an example a blog with the following question:

How has the total number of pages viewed changed over the past 14 days ?

cohorte

To be read from bottom to top. Taking the social network as an example, it represents the life cycle of using the service, which is always composed of three stages:

  • The registration process
  • The use
  • The permanent discontinuation of the platform’s use

It is the most important and complicated element that is systematically studied by investors.

aarRr : The referral to ask the user to talk about your service

It is all the mechanisms that will ask the Internet user to tell his family about your service because it is always easier to convince them if one of their friends recommends it. This translates into the number of shares, tweets, etc. They can be encouraged to share because they are rewarded for it.

Let’s take the example of Dropbox. The offer is an additional 500 MB for all sponsorships. This is a good way to make users passive into active users who share their files themselves. Airbnb offers each sponsor 20 euros for each new user sponsored. It is an incentive to promote the service that corresponds to their value proposition of offering low-cost housing.

aarrR : Revenue is the capital that you generate through your service

There are 6 financial indicators to follow:

CashChurnCMRR (Contracted Monthly Recurring Revenue)LPC (Lifetime Profit Per Customer)CACR (Customer Acquisition Cost Ratio)CPA (Cost Par Acquisition)
The money that can be mobilized from the company’s bank account. When it falls to 0 you must declare bankruptcy and stop the activityThis is the number of subscription deletions per month / by the total number of subscriptionsThis is the income you generate each month. (Total number of paying accounts – number of cancellations in the month)*monthly priceThis is the amount spent by the subscriber on your site. In short, larger is the LPC, more you need to invest in marketing to accelerate your growthThis is the ratio that allows you to know the time it takes for the Internet user to use your service to reimburse your acquisition costs.This is the marketing cost per customer. The goal is to minimize this cost

To go further…

Nicolas Brunn In : Growth Hacking – Révolutionnez votre stratégie Marketing Digital [Online] Paper book format in French available on : < https://amzn.to/328Kgkh >

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