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Friday, October 15, 2021

Here is Everything You Need to Know about AARRR Pirate Metrics

When you want to run a successful business, there are a number of things that you need to improve. The most basic aspect of improvement is measurement. There are a number of ways that can be used to measure the various factors that are at play in your business. Pirate Metrics are basically one of the ways that are employed to group several metrics and categorize them on the basis of what you want to measure. AARRR metrics hence stands for acquisition, activation, revenue, retention, and referral which are some of the groupings employed in pirate metrics. These five groups represent the chronological stages in the life cycle of a customer.

This model was created in order to help an entrepreneur not only identify where the problem lies but also to help them concentrate their efforts to make the sales and marketing atmosphere ideal for the success of the business. The AARRR framework was initially developed by Dave McClure about 10 years ago. Dave McClure was an angel investor, a venture capitalist who introduced this system of analysis in order to help any business grow

What does Pirate Metrics mean?

AARRR metricsAs already mentioned, pirate metrics are one of the best ways to analyze your business using its five-step model. The AARRR funnel has been used by businesses all over in order to get a deeper understanding of their customer and their life cycle when interacting with the company. This is one of the best systems as it will help you to make your funnel ideal, as well as help you set up reliable and workable goals for your company. The five metrics that are the main components of the AARRR metrics have been widely known as the most important aspects that you must concentrate on. These metrics are easy to measure and simple to understand. But they are extremely fundamental in measuring the growth of your company. 


This is the first metric of the AARRR funnel and is used to understand how potential customers can find you and then turn into your customers. While you must investigate the number of visitors on your site on a regular basis, the acquisition metric also takes into consideration the number of visitors you have on your site as well as how they turn into your customers. It is important to take note of how a potential customer becomes a royal one and visualize this journey every step of the way. Each and every step is important here and not just how the final conversion happens.

Pirate growth chartThe reason why you must study these Pirate Metrics in detail how a customer finds you and buys your product is important as it helps you to measure not only the route of your customer’s journey but also helps you to optimize this pathway for your future customers. 

Customers and Leads

It is important for you to make a clear distinction between a qualified lead and a lead in this respect. A lead is basically anyone who visits your website and whose contact information you have been able to get your hands on. Now, you cannot make a confirmation that a person wants to purchase from you simply because they have given their contact information to you. They might simply want to keep up with the development in your company for further all later purchases, which might not happen eventually. A qualified lead is a person, who takes the conversion journey a few steps further.

They might want to view a video of how your product is to be used. They might even attend a webinar related to your product. This person now becomes a qualified lead. Hence, your sales team can act upon in order to convert them into your customer in the pirate funnel.


This is the second metric in the Dave McClure pirate metrics. Activation takes into account your customers’ first experience with your product. It is pirate funnelvery important that your customer realizes the value of your product. Moreover, this will bring them back to it again and again. Suppose the first experience your customer has is unsatisfactory. Hence, it will not take much time for them to uninstall the application or simply give up on it. Provide something extra special to make sure that the first impression your product has on a customer is absolutely mind-boggling. To optimize the user’s experience of your application, understand how much content and what design suits your customers the best. For this reason, activation is more important for SaaS and apps and relatively less important for E-Commerce websites. In short, an activated customer is one who keeps using your product and comes back to it frequently. 


The third pirate metric is retention is described as how regularly customers use your product. This is one of the most important aspects that you have to keep in check on which the success of your business depends on. This is measurable in an E-Commerce business when a particular customer buys from you multiple times. A well-retained customer would be someone who keeps using your application over a wide period. For a SaaS business, the person must use your software often. Also the person should be subscribed to it for a significant length of time. Customer churn is also a very important variable for measurement. It is somewhat opposite to customer retention. Also, it is a good metric to understand the level of product/market fit for your business. 


pirate marketingIn pirate marketing, a referral is the fourth step. A referral-based system will help your company grow successfully in no time at all. You must be spending a lot of money marketing your product with very little success. Use your present customer base to influence others to buy your product. Furthermore, establish an incentive-based process. There are two metrics included in the pirate funnel that you want to look out for when using referrals which include Net Promoter Score which basically measures your customers’ likelihood of referring your product to someone else. The other metric is the Viral Coefficient which refers to the number of users a particular customer recommends. The viral coefficient basically needs to be more than 1 for you to grow as a company. 


The final chapter in the pirate funnel is revenue. When you optimize the previous four measures, revenue will be bountiful in no time. A carefully strategized monetization plan is important in any company at all times. The best way to boost your revenue is by decreasing the customer acquisition cost. Also, by increasing the customer lifetime value. 

It is very important for you to make full advantage of the AARRR Pirate growth chart which will help you in every step of your business. Make sure to optimize these metrics for imminent success.


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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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