The AARRR Framework, also known as Pirate Metrics (from the pirate-sounding "AARRR"), is a customer lifecycle model developed by Dave McClure. It provides a structured approach for startups and product teams to track and optimize their growth funnel across five key stages: Acquisition, Activation, Retention, Referral, and Revenue.
The five stages of AARRR
1. Acquisition
This first stage focuses on how users discover your product or service. Key metrics include:
- Website traffic sources
- Cost per acquisition (CPA)
- Conversion rates from various channels
- Click-through rates (CTR)
2. Activation
Activation measures whether users have a successful first experience with your product. It answers the question: "Do users find value in your product quickly?" Key metrics include:
- Onboarding completion rates
- Time-to-value
- Feature adoption rates
- Initial engagement metrics
3. Retention
Retention tracks whether users continue to engage with your product over time. This is crucial for sustainable growth. Key metrics include:
- Daily/weekly/monthly active users (DAU/WAU/MAU)
- Churn rate
- Session frequency
- Usage patterns over time
4. Referral
The referral stage measures how effectively users recommend your product to others. Key metrics include:
- Referral rates
- Viral coefficient
- Shares and invites sent
- Word-of-mouth conversions
5. Revenue
This final stage focuses on monetization and evaluates how well you convert users into paying customers. Key metrics include:
- Conversion to paid
- Average revenue per user (ARPU)
- Customer lifetime value (LTV)
- Renewal and upgrade rates
Benefits of the AARRR framework
- Provides a holistic view of the entire customer journey
- Helps identify bottlenecks in your growth funnel
- Focuses teams on metrics that directly impact business success
- Creates a common language for cross-functional teams
- Enables data-driven product development decisions
By implementing the AARRR framework, product teams can systematically improve each stage of the customer journey, leading to more efficient growth and better overall product performance.
