Hi there đ
First of all, let me wish you a successful year 2021!
I hope you had good times with your family during the past two weeks, and that you are ready to kick asses in the next twelve months. đ
Today, I am going to talk about a tool I love and use every time I can to design and optimize go-to-market (or marketing) strategies.
Itâs called the AARRR! model.
Itâs a framework that is based on the main steps of a customer journey. It is not really a funnel but you can see it a bit like one.
Disclaimer
The AARRR model is NOT a step-by-step guide. Itâs not sequential. Itâs a fill-in-the-boxes tool, and not in a particular order.
Every A or R reinforces all the other ones.
Letâs go deeper.
Where does the AARRR! model come from?
The AARRR! framework was designed by Dave McClure, the founder of the famous US based startup incubator 500 startups.
His objective was to define a way to measure the success of any tech startup/product marketing strategy in terms of customer growth and to find where optimizations are needed.
He explains what metrics can be included in the model to measure every step of the funnel in this 5 minutes video đ
If youâre interested in reading more, you will find the slides of Dave McClureâs Startup metrics for pirates (long version) presentation on Slideshare.
What does AARRR! mean and how to use it?
A for Acquisition
This includes all the channels and tactics that you can use to acquire visitors, generate trafic to your website or have people downloading your app.
It can be:
SEO or Search Engine Optimization
SEA or Search Engine Advertising
Social & Display Ads
Public Relations
Business Development
Content Marketing
âŠ
You get the point. đȘ
Your job here is to find the appropriate channels that bring a large audience at the lower cost with the best performance in terms of conversion.
A for Activation
Every digital product has its own definition of Activation.
But, globally, it is defined by an action or task completed by a new user in the product. You, as a product owner, have to choose it.
It can be:
Create an account
Use a specific feature of the product
Add an item to the basket (e-commerce)
Repeat an action x times
âŠ
For example, Twitterâs Activation indicator is not a user that has completed the registration process. Itâs a registered user that has followed at least 6 other Twitter accounts or tweeted twice.
They chose this metric because they noticed that such a user will tend more than another who didnât to come back to use the service.
(Editorâs note: you can follow me on Twitter here. đ„)
Your job here is to find what metric defines an active user for your product. You also have to implement whatâs needed to provide the happiest possible first experience, including helping achieve the action that drives the most engagement.
R for Retention
Your retention rate is the pourcentage of users that come back to use your product after a certain period of time.
The opposite is your churn rate: the pourcentage of people that leave your product and never come back.
Most digital products use the following tactics to make users come back.
E-mail notifications
Push notifications
Rewards
...
These are what we call âExternal triggersâ that aims to bring users back into the product. If you are a social media user, you know what I am talking about. đ
âHooked - How to build habit-forming productsâ is a very interested book on how to create what Nir Eyal, the author calls âInternal triggersâ. I' will develop this topic in a following issue.
Itâs your job to implement triggers that will make the users come back (often).
Because Retention is the most impactful metric of the AARRR model to sustain your growthâŠ
Wondering why itâs not Acquisition? đ€
Because the more people come back to use your product, the more you probably found what we call âProduct/Market-Fitâ. The right product for the right user. The product that solves a real problem. I wrote about this in this post.
But also, more satisfied customers means more word-of-mouth, more referrals⊠more users (=Growth).
QED. Quod Erat Demonstrandum. đ€
R for Referral
A Referral is a recommendation of your product or service by one of your user towards a pair or friends and family.
There are lots of things that you can do to help or push your customers to recommend your brand to their pairs.
It can be:
Encourage reviews
Ask for and display customer testimonials
Encourage social sharing
âŠ
You can also set a referral program up. You can incentivize your customers to invite their friends to your product or service in exchange of a reward. đ
Dropbox is probably the most famous example of this kind of tactics, also called a Growth Hack. More about this later.
They grew their user base from 100,000 to 4,000,000 in only 15 months! Impressive. đł
They simply offered heir users up to 16GB of free extra storage to refer the service to their friends. 500MB per invited friend that signed up to the platform.
This presentation of Drew Houston, the Founder and CEO of Dropbox, is telling their debut story. Itâs a must read for anyone interested in entrepreneurship and tech startups. So, if you have 5 minutes⊠â
Well. Referral. Almost free growth. This is how you can start to make money⊠đ€
R for Revenue
This is how you generate (more) revenue.
It can be:
Selling physical items
Selling digital items (ebooks, e-learning, âŠ)
Selling subscriptions
Selling online services
Exclusive features
Advertising
âŠ
So, of course, here, youâll measure turnover, margins, average basket value, âŠ
The AARRR! model applied to BCW.com
This is how I like to visualize a AARRR model/GTM strategy I designed. đ
This one is not about how to get celebrities to join the service/platform. Itâs about the end-users.
Acquisition
The idea is to attract the first user using social and web platforms they use but targeting the fans of the celebrities that will play the game. Thatâs why a key activity in my business model is called âAuction campaignsâ.
I plan to ask celebrities and beneficiary non-profits to share a home-made by the celebrity itself video on their social media accounts to announce the launch of the campaign and possibility for people to bid.
Iâll also use some Facebook/Instagram and Google Ads to target fans of the participating celebrity.
Activation
Once on the platform, those people could place a bid to win the session. They will have to create an account first.
Some, less engaged with the available celebrity could just register to a newsletter, leaving their preferences, to get informed of future interesting sessions.
Retention
I plan to notify users that placed a bid that somebody else just put a higher bid and that they can outbid (again).
The newsletter will let people know when new artists/celebrities live chat sessions are available on the platform.
Referral
I plan to encourage social sharing after the winner of an auction is notified.
I also plan to ask winners to rate their experience after the live video chat session with the celebrity, and to use those ratings for reassurance of new visitors.
The third major thing I plan is to offer the participants to download and share on social media the video recording of their session, so their friends learn about our service.
Revenue
Obvious. The revenue will be generated by the selling of the live video chat sessions.
What do you think of this strategy?
Any insights you need to share with me?
Donât hesitate to comment đ
Time for me to go âïž
In the meantime, if you liked this content, please share it with someone who you think will find it useful too. đ
See you next week. (Iâll have turned 40 đ±)
Fabee