AARRR Framework: The Growth Marketing Matrix
What is Growth Marketing?
Growth Marketing appeared to remedy the constraints of Growth Hacking linked to GDPR issues. Its purpose is to thoroughly examine the life cycle of a customer (purchase and behaviors) to optimize the marketing and sales strategy in order to engage prospects. It is based on marketing elements such as:
- Inbound blogging,
- The creation of CTAs or even landing pages,
- automated campaigns,
- In-depth work on natural referencing, etc.
Growth Marketing aims to attract, engage and retain customers. To do this, it uses the AARRR matrix, which will optimize your conversion work and therefore ultimately increase your income. It is therefore not just a “growth hacker trick” but or key tool for every business.
What is the AARRR framework?
The term AARRR corresponds to the acronym of the 5 stages that illustrate the life cycle of your customers, namely: Acquisition, Activation, Retention, Recommendation and Revenue. It is a model used by a lot of growth hackers and which will allow you to analyze your data to improve your conversion funnel.
Its objective is to maximize conversions and optimize the development of your business. Thanks to its 5 steps, you will be better able to identify your objectives and your blocking points. It was designed by the American Dave McClure in 2007, business angel of more than 500 startups who knew how to optimize the conversion funnel of these companies.
Every step of the AARRR growth framework can be optimized. It is a funnel that should allow you to improve your sales process. You will be able to see if each of your actions has a positive impact on the development of your business, and improve them if necessary.
What are the steps of the AARRR marketing framework?
Aarrr: Acquisition, or how visitors find you?
This first step is rather obvious. Indeed, acquisition concerns the different channels that allow you to have visitors on your website, listeners on your podcast, viewers on Youtube, etc. There are many acquisition channels: social networks, SEO, Ads , e-mailing, affiliation, partnership, etc. On the other hand, all channels are not equal and their effectiveness will be different depending on your company.
Your objective is as follows: increase your conversion rate by working on the visibility of your company. Be careful to target your audience correctly and not to be tempted by the easy way of trying to reach everyone. It is counterproductive and you will end up with a parasitic marketing funnel.
But then, how to measure it? It's simple, if you have a tool like Google Analytics you can see where your visitors come from. The goal is to find the sources of acquisition that work best.
aArrr: Activation, or the first user experience
The activation stage consists of gauging the temperature of a prospect and convincing them to take action. For example, by subscribing to your newsletter, filling out a landing page or requesting an appointment, etc. You must therefore offer content with high added value to encourage your visitors to interact with you.
But to know your activation rate, you must define an activation indicator upstream that clearly demonstrates that a prospect is interested in your offer (example: the time spent on your site, a download, the number of pages visited, adding an item to the basket in the case of e-commerce, etc.).
If your visitors have a successful first user experience, they will stay on your site and come back. This is why you must ensure that your visitors understand the added value of your product or service and perceive the benefits they can derive from it. And don't forget to collect as much information as possible to keep in touch!
aaRrr: Retention, or how to retain your customers?
Retention is a more than important step. It is synonymous with an interest that your visitors have for your service or product: they are already using it or are about to use it. The question that then arises is: how to bring it back?
Note that retention allows you to know your loyalty rate over time. Remember that it is always more expensive to acquire new customers than to keep existing ones.
So if your retention rate is not good, if you are unable to control it or understand it, your acquisition and activation efforts will be in vain. You must therefore bet everything on the retention stage!
To do this, you have several techniques including marketing automation or e-mailing. A good content marketing strategy will be necessary. You can also implement an inbound marketing strategy, such as nurturing, to nurture your prospects with tailor-made content that will make them progress until, fingers crossed, becoming an ambassador for your company.
aarRr: Reference, or how is your recommendation rate?
Once your traffic picks up and you have more and more customers, you can start converting them into ambassadors. The goal ? That your customers satisfied with your products or your services recommend you to their families, friends, colleagues.
The recommendation is a powerful lever for acquiring new prospects since it is based on the trust that a person has in a product or service. Word-of-mouth is an effective means of attraction, even more so since the advent of Internet users and social networks (#testimonials, reviews and comments).
Be careful, your customer must still win something, an advantage such as a promotion or a gift.
The reference or recommendation stage is a long-term organic growth factor. It allows you to replenish the start of your marketing funnel with prospects that are potentially already more engaged than those coming from your acquisition channels.
aarrR: Income, or how do you earn money?
This is the final step for you: the income step. It's simple, if you sell a product or a service, you increase your turnover. This step can also be placed before the reference step, since you don't always pay after being loyal.
Logically, by working your AARRR steps correctly you should be able to increase your income. This is why you must absolutely carefully target your audience so as not to waste your time or your money. Otherwise, you must analyze the factors that will slow down the act of purchase.
Namely, income is directly linked to three elements:
- The lifetime value (CLV): this is what a customer will bring you during his life cycle. To increase this data, there is of course the optimization of retention but also the work of Upsells by offering related products or services.
- The cost of acquisition: it's simple, the more you reduce the cost of acquiring a customer, the more you will increase your margin. It's up to you to judge what needs to be reduced, reworked or deleted.
- Pricing: in terms of pricing, you must find the right balance so that the increase in your prices does not impact your conversion or retention rate. Conversely, you should not “undersell” your services.
So never stop challenging yourself to constantly improve your conversion rate. Base yourself on facts, on your analyzes, and test your actions.
Conclusion: The AARRR Framework in Marketing
The AARRR model is a great way to measure the efficiency of your funnel and analyze the health of your business. Simple to set up, it will help you manage your business by observing the life cycle of your customers.
The most complicated will be to define what the activation, retention, etc. step corresponds to, according to you and the objectives of your company. Then just follow the key performance indicators you have defined and optimize your funnel accordingly.
However, don't rely on it for the order of the customer journey you need to work in. Acquisition will not necessarily be the first step for you, retention may be the most important step to improve at first, for example.
Finally, do not hesitate to equip yourself with a CRM tool to facilitate the management of your 5 steps.