Acquisition, Activation, Retention, Referral, Revenue. AARRR is the acronym for the 5 steps modelling the customer lifecycle. Much more than a simple marketing strategy, it's a state of mind with a crystal-clear goal: the rapid growth of your business.
Focus on this Growth Hacking tool that has been key to the expansion of some of the most famous businesses in the web industry.
The AARRR model aims to maximise conversion and growth for businesses in the short and medium term. From acquiring users to converting them into customers, it goes through the 5 stages of development of a company by classifying its objectives and identifying its blocking points. The goal is to give the company all the tools to analyse the market’s response to its product/service.
Highly acclaimed by growth hackers in the start-up world, the AARRR matrix was created in 2007 by the American Dave McClure, entrepreneur and business angel of more than 500 start-ups. To help them get more visibility, he looked at the 5 essential steps to follow to optimise the funnel of conversion.
Aarrr for Acquisition (attracting new prospects)
If you want to develop your prospecting portfolio and identify potential buyers, you need to focus on the Acquisition of new leads. Attracting visitors to your website will only be possible if you are visible. If you don't make a name for yourself, you won’t have one in the eyes of your audience. To capture their attention and increase your visibility, you need to play on different acquisition channels.
- SEO to define keywords relevant to your target/market and optimise your pages and your content strategy.
- SEA to boost your SEO with sponsored content.
- A strong Inbound Marketing strategy for a high added value approach.
- Social Media to add value to your expertise and interact with your visitors.
- Emailing to share your digital marketing campaigns.
aArrr for Activation (convincing your visitors to take action)
So, people know who you are and they see you on the web. Bravo, your efforts have paid off. But... that’s not enough. You need to turn these visitors into users. The Activation step is crucial because it helps you determine the maturity and interest of your prospects for your product/service.
Your offer needs to match their needs. For this, focus on offering a fun and engaging user experience through, e.g., signing up for a newsletter/webinar, requesting a demo, downloading a white paper, etc. Always keep in mind that to convert, you must convey relevant information that meet the expectations of your prospects.
To ensure optimal conversion, choose clear landing pages and persuasive but consistent content, and invest time on your calls-to-action so they have the right impact.
aaRrr for Retention (converting leads into regular users)
With an effective acquisition strategy, some of your users should already be activated or will be soon. They have adopted your product/service and given you their contact details via your landing page. Time to turn your attention to Retention. You want to make sure these users come back on a regular basis and they become active users.
Let's look at a simple example: you have acquired 1,000 visitors to your website. Of these, 100 have used your service. But only 1 returns regularly. That means all the hard (and efficient) work you did in the first two stages of AARRR is pointless. The results you expected are not showing.
Here is how you can optimise your retention rate: use marketing automation to create automatic emails and maintain the relationship with the user. This way, they’ll always interact with your brand one way or another. Set up a content marketing strategy. Regularly publish quality content and share it on social networks. This will help you value your expertise to better engage and keep your users.
aarRr for Referral (encouraging users to invite other users)
At this stage of the framework, no doubt, your visitor flow exceeds your expectations. Your activation rate has never been so high and your users are loyal. Let’s up the tempo and start thinking about Referral. In other words, it's time to turn your users into ambassadors.
Since the dawn of time, word of mouth is a very effective way to attract new prospects. And this has been even truer with the arrival of the Internet. Then came the social networks, where every review and comment on your brand can potentially be seen by thousands of users.
A satisfied user will not hesitate to recommend it to his peers. Referral is without a doubt one of the most powerful marketing levers to generate business.
Encourage your ambassadors to talk about your brand by offering sponsorship deals with rewards for sponsors and sponsees. Finally, make good use of social networks where the virality of the user experience will help amplify word of mouth marketing.
aarrR for Revenue (generating and boosting revenue per user)
While the first 4 steps are not aimed at making money, the last R is all about Revenue. Now that your engagement process is well-oiled, set your goals on generating and increasing your revenue per user. Time to talk about money!
In short, monetisation is the root of the financial health of your business. This is why you need to convert users into customers. To do so, start by analysing the factors that could slow down this conversion.
Is your offer clear enough to be understood by everyone? Is there a technical issue or a problem with the price?
If you want to improve your conversion rate, you will need to constantly challenge yourself. Your decision making must be based on facts, not intuitions. List ways to improve it and test your actions so you can define the ones that will have the greatest impact. Don’t hesitate to contextualise your messages to mature your prospects in the perspective of continuous improvement.
There is no magical method and each company is different but the AARRR matrix is an effective lever of growth that has largely proven itself. Each stage of the conversion funnel builds a set of values, and provides you with an overview of the customer lifecycle that will help you speed up your business opportunities.
We highly recommend using a CRM tool to achieve the best commercial and marketing management of these 5 essential steps. It is a valuable asset to be closer to your users and customise all your actions.