The AAARRR framework is a Growth Funnel that will help you grow your business and achieve exponential growth. It’s called the AAARRR Framework because it consists of 7 stages: Awareness, Acquisition, Activation, Retention, Referral, and Revenue. This framework was first introduced by Dave McClure in 2008 when he wrote his book “Growth Hacker Marketing“. He has since then been preaching its value to entrepreneurs all over the world. This blog post will go through 10 steps that will help you build a Growth Funnel using the AARRR framework!
Acquisition/Awareness: How do you get users?
For many businesses, acquiring users is the hardest part; it’s the first stage of the AAARRR framework.
You can have a great product and provide great value, but you’ll find it hard to acquire users if nobody knows about it.
There are many great ways to acquire users, but it starts with knowing who you’re trying to attract. To identify the user type of the person you’d like to target, you’re going to have to figure out whom you’d like to target.
Start looking at personas for your ideal users. These personas are specific characters with traits and behaviours, and they’re built using data to understand better how your users interact with your product.
By narrowing your choice of users to a couple of key personas based on the characteristics outlined above, you’re ready to start building your list of prospective advertising targets and newsletters.
As it turns out, there are a lot of personas out there to choose from. Some people use a more specific framework, such as the Social Engagement Model. Others use the Targeted Personalization Model.
You may also create a new persona. The point is, whatever persona you choose, it’s going to serve as an abstraction for your target audience rather than an exact description of every user on your list.
For a lot of businesses, the future comes before the past. Right now, a user is a person trying to do one thing: drive traffic to a website.
However, people behave in a very patterned way on the web. As this person gets more and more into certain articles, they’re also prone to certain biases, which biases their decisions as to what article(s) they’d like to read.
For example, some people like to read content related to relationship suggestions and relationship status, whereas others enjoy finance content.
Unfortunately, this personality bias that every person experiences impact the decisions businesses makes about email outreach.
Activation: How do you turn your leads into customers?
Activation happens when a user can complete the desired goal with your product. This is the next stage of the AARRR framework.
Activation happens when the customer achieves their desired goal on your platform; this could be through getting them to sign up or purchase something to coming back for new content.
At the activation stage, these users would be considered as leads.
There are many different ways that you can activate your users, but here are some of our favourite methods:
- Give them something they want (e.g., free stuff)
- Keep people coming back by providing new content regularly (e.g., blog posts)
- Offer a sneak peek of a new product.
If you’re building a blog, there needs to be some reason for people to keep coming back.
If you own a SAAS tool, activation would mean getting users to use your product regularly.
The key is to find what they’re hungry for and then give them more of it.
Retention: How do you keep your customers?
The next stage of the funnel is Retention.
You have to ask the question, “How do I keep my customers coming back?”
Retention means that you’re trying to keep your customers continually.
You can do this by giving them the value of what they need, which could be anything from:
- Customer service support (e.g., chat)
- Discounts or bonuses for continued use
- Added features to your product
Retention happens when a customer keeps returning, which is the result of meeting their needs and expectations.
For example, if you have an account with Netflix, then they’ve retained you as long as the service has been able to meet your needs and expectations within that time period.
As soon as their service becomes less valuable to you, then they will have lost you. If a customer loses you, it’s known as a churn.
Your responsibility is to make your churn rate as low as possible.
Retention is the bottom line of any company because it’s all about keeping your customers as long as possible to become loyal customers.
It’s also important in attracting new customers and making sure people want to come back for more from you.
To find out how well your business does at retention, ask yourself these questions: Do my customers come back again after they make a purchase? How often do my customers return?
To try and improve your retention rate, make sure you’re giving them what they need to come back.
The customer service must be great so people can come back for more if needed.
Remember this; it’s a lot cheaper to retain a customer than it is to acquire one.
Why is that? Well, retaining a customer is cheaper because you already have a lead.
Your customer has just been activated and retained, so you’re getting the best return on your investment.
Activating new leads cost more money because you have to spend money on advertising.
You’re paying for new leads all the time, whereas, with a customer, you already know that they want your product and will use it.
This is why retention is key because it allows you to save time and money in other business areas.
Referral Engagement: What makes your users spread the word about your app? (formerly known as Virality)
A referral is the next stage of your funnel.
It’s all about getting more people to use or buy your product for free through word-of-mouth advertising.
So how do you get this going? Well, first off, make sure that your customers are happy with what they’re buying and using from you because it will be what they tell people.
If the customer is happy, it’s easy for them to refer you because they can give a good review or recommendation.
This means that customers will come back on their own and do some of your marketing work for you with no additional investment from yourself!
There are many different ways to make referrals on your behalf, but the easiest way is to create something that people want and give them a reason to tell others.
One of my favourite examples of this is Dropbox. If you’ve ever used their service before, then I’m sure you’ve seen the email send-outs they do every once in a while with what’s new with Dropbox.
What they’re doing is giving you a reason to tell others and share the love of their service, which would lead to more sign-ups for them.
How do we apply this? Create something that people want, give your customers a reason to tell others about it, and reap the benefits of word-of-mouth advertising.
Benefits of Referrals:
- You get more customers for free!
- It’s cheaper than spending money on other marketing efforts because you’re paying people to do it themselves.
- Word-of-mouth is the best form of advertisement, so why not take advantage? – The customer gets a sense of pride because they’re spreading your word.
- You can build a community around what you share with others, and it’ll bring them back for more!
- Referrals are also known to increase customer lifetime value, which is good news for your company’s bottom line.
Revenue: How do you make money from them?
For example, to generate income from your blog, you have two options: 1) Advertisements on your site 2) Affiliate Links The first one is easy to do but has a limit on how much you can make.
The second one is more difficult to set up but can generate a lot of money if you do it right.
Understanding how to generate revenue is essential to the success of your business, but it’s not enough. It would be best if you generated profit from what you do as well.
A revenue stage is typically a subsystem of the system in which it generates profit from a user base through sales to end customers or other organizations. The revenue stage will depend on variables such as the type of product produced and the target audience.
The revenue stage does more than generate income, however. It also helps you understand your business’s profitability or how well you can sustain your business through the generation of funds. Therefore, your revenue projections should be accurate and show how much money you should expect your company to generate over a certain period of time.