Acquisition, Activation, Retention, Referral and Revenue Metrics (AARRR)

April 22, 2022

“There is no way you can make any profit if you do not first attract and then retain your customers” - Abimbola Ogundere- Edves Catalyst,2019. 

AARRR is a framework that was first defined by Dave McClure as a simple tool to help businesses develop a model of customer behavior, as a result, improving marketing and business growth efforts.

AARRR, which stands for ACQUISITION,ACTIVATION,RETENTION,REFERRAL and REVENUE, can be defined as a process of acquiring, activating, retaining customers, then making them advocates who then go on to refer the product or service to others, hence generating revenue.

The goal of any business organization is to make and retain her customers, therefore, the Customer journey is important to every business that desires increase in every facet.

The Acquisition stage involves first understanding the target market, then structuring the means of communication to the market in order to suit the target market. 

The Activation stage involves making every experience of the customer after they have been acquired easy, enjoyable and pleasant. In essence, it is about giving your customers an "AHA moment"...a moment where customers can really see the value of the product or service.

The Retention stage simply involves making sure the customers are happy with the product or services provided to the end that they are regularly using the product or services.

The Referral stage depicts the existing customers now love the product or service such that they are willing to recommend the product or service to others. This is one of the easiest routes to gain more customers because it shortens the time it would have taken to build customer trust.

In addition, word of mouth goes a long way in accelerating the Acquisition stage. Also, giving rewards for each referral to encourage more will help to generate massive growth. 

The final stage is the Revenue stage. Once you are able to retain customers, more so, at a much lesser price compared to the price at which they were acquired, and are also able identify which of the product or service will turn a potential customer into a paying customer, then there would be a resulting increase in the revenue.

In closing, when you find your ideal customers, you can use your marketing budget more effectively, identify the specific niche within that target market that brings the most revenue, and present your value offerings.

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