March 21, 2014

AARRR Metrics

The AARRR Metrics for Marketing/Product Fit Strategy Dave McClure creator of the AARRR Metrics, also cofounder of 500Startups, argues that for a startup founder/CEO to be successful, one should only focus on 5 key metrics. And we completely agree. The following is automatically baked in to all of the campaigns built, managed, and measure on the MarketingRunner platform. He believes companies are building too many features and spending too much money before they know if their product is going to have a good market/customer fit and produce revenue. His challenge is to gather effective and measurable feedback to guide product decisions. He agrees with Eric Ries‘s model in The Lean Startup:

Define an idea.
Build something to test your idea.
Measure customer responses.
Modify your idea based on what you learned.
Repeat the process. The faster you move through the loop, the more your learn, the more likely your idea will succeed.

What and how do you measure customer responses? Dave McClure’s challenge in several of his online conference videos (links below) is to base what features you build into your product by developing a feedback loop that provides specific metrics about your users, their lifecycle and conversion behavior. Dave’s Pirate Metrics helps you perform quantitative and comparative analysis of your business by tracking 5 key metrics: Acquisition-Where and what channels do users come from? SEO,widgets, Facebook, etc. Activation-What % have a “happy” initial experience? Retention-Do users come back & re-visit over time? Referral-Do they like it enough to tell their friends? Revenue-Can you monetize any of this behavior?

Customer Lifestyle/Conversion Behavior by David McClure