One thing that all
marketers humans have in common is that we are all running out of time.
It doesn’t matter if you are a solopreneur or the CMO of a giant organization you only have 24 hours in a day, which means all of your actions have an opportunity cost.
Take for example, the tedious task of manually responding to new leads.
For every hour spent responding to new leads, you lose an hour doing something else for your business (working with existing customer relationships), or for leisure (spending time with your family).
Pirate metrics is a helpful customer-lifecycle framework invented by Dave McClure from 500 startups that you can use to determine where you should focus on optimizing your marketing funnel, to make the most of your scarcest resource — your time.
Don’t worry, you don’t need to be a pirate
Pirate metrics is essentially a way of categorizing different metrics and KPIs, and is made up of the metric “categories” Awareness, Acquisition, Activation, Revenue, Retention, Referral — or AAARRR for short (like a pirate. Pirate metrics, get it?)
I suggest you head on over to Slideshare to read the original slide deck outlining Pirate Metrics. During my time as a marketer I have adapted Dave’s methodology a bit to better suit my needs as a “marketer’s marketer.”
(I have adjusted the order a bit, and added the “Awareness” category to the beginning of “AARRR”)
Depending on your vertical, you will be paying attention to different types of AAARRR metrics, and the shape of your funnel will look different, but the basic pirate metrics framework should still apply.
Awareness metrics focus on the brand-building aspect of your marketing efforts.Awareness pirate metrics focus on the brand-building aspect of your marketing. Tweet this!
Awareness metrics are focused on introducing yourself to your potential customers, and trying to drive them to take action. It would be impossible to measure, but anytime a person sees somebody wearing a t-shirt with your brand on it, or a logo sticker on a laptop, that would be awareness.
Awareness “matures” as people have a recollection of your brand, so when they see that logo they know what it is. Traditional advertising like TV, radio, billboards are all marketing channels meant to drive awareness.
CPG (Consumer Packaged Goods) companies like Tide and Campbells soup spend a lot of time in the awareness category, and awareness is typically what “muggles” think of when they think of marketing an advertising.
Pirate Metrics means to remind us that awareness for awareness sake is not your objective. The ultimate goal is to tie awareness campaigns to objectives lower in the funnel, so that you are driving brand awareness for the right people.
Keep in mind that awareness metrics are not commodities. Some (those likely to convert further down the funnel) are worth more than others.
Awareness metrics to measure: Impressions, CTR, Attention-minutes, site visits, vanity metrics (likes, social shares, social impressions), podcast impressions, etc…
Channels to work on: SEM (AdWords), SEO/Content, Display, Word-of-Mouth, Retargeting, Affiliate
Acquisition is when you can begin to identify your customers as individual users.Acquisition marketing: When you can target customers as individual users (and measure the results). Tweet this!
Acquisition is your first transaction with a user. Only instead of exchanging money for a product or service, you are typical exchanging some form of content for the permission to message them again in the future.
For a SaaS company, this typically takes the form of PDF downloads – Case Studies, Whitepapers, etc… For an ecommerce company this could be a seasonal catalog, or a one-time coupon code.
It is a good idea to spend as much time trying to move your visitors from Awareness to Acquisition as quickly as possible — even if you don’t plan to message them.
Once you have a user acquired, you can begin to fill out their profile with customer attributes. Customer attributes are pieces of information about a lead that you can use to help sculpt both your product and the way you position your product.
Consider a product marketer *cough*, that wants to communicate the values of a marketing automation platform to several types of customer personas (ecommerce, SaaS, solopreneurs, etc…).
If that product marketer knew the potential customer’s persona, then he or she could create tailored onboarding campaigns that create the most value for each individual person.
Acquisition metrics to measure: New leads, email subscribers, resource downloads, support/sales chats, pretty much anytime you get a customer’s email address.
Channels to work on: Conversion Rate Optimization (CRO), Lead-magnets, Webinars, Chat Widgets, Newsletter subscriptions, Landing page optimization, promotions
Activation is the process where your user actually tries your product.Getting users isn't enough – you have to help them get the most value from your product. Tweet this!
Different verticals have different shaped funnels, but activation is generally the amuse bouche of your product. For SaaS companies we are most familiar with a limited time trial (like a 14-day free trial) or a freemium offering with limited features. For an ecommerce company this could be a loss-leader product, and for a photographer this could be a free consultation and/or product samples.
Depending on your vertical, the “height” of the activation stage in your funnel will vary, but it is generally when a customer is able to experience the product you are offering first hand.
The differences between Acquisition and Activation are confusing, so it is important to remember you are solving a customers problem with content during the acquisition stage, but you are solving their problem with a sample of your good or service during Activation.
Activation metrics to measure: New trial signups (SaaS), loss-leader product sales (ecommerce), freemium customers (SaaS), replies (sales).
Channels to work on: User-experience, feature adoption, customer success, traditional sales, early customer success.
Revenue is probably the easiest stage to remember. It is when your contact finally takes the plunge to swap out some of their money for some of your products.
For a SaaS company, this is when a customer makes their first month’s payment.
For ecommerce, it is when they make their first “real” purchase (you may have a loss-leader product that you charge for, but doesn’t generate revenue).
For a consultant this could be when you sign a contract, or receive a security deposit, etc…
The most important thing to remember about the revenue stage of the pirate metrics framework is that you are not done!!