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AARRR metrics

AARRR metrics (also called pirate metrics) is an approach to analyzing a business' performance that focuses on customer satisfaction. The metrics, which were developed by venture capitalist Dave McLure, are used by growth hackers, analysts, consultants and business owners  to improve profitability.

AARRR is an acronym the individuals standing for:

Acquisition - How does the business get new customers?

Activation – How many customers are satisfied with their shopping experience?

Retention – How many customers return?

Revenue – How much money does each customer bring to the business?

Referral – How many customers suggest that other people should consider your business?

An important goal of AARRR metrics is to break the customer base down into stages that make analysis easier.  The easier analysis allows the issues of the business to be seen and addressed individually for more efficient problem solving keeping. The ultimate goal of AARRR metrics is to maximize the profitability of a startup.

By breaking down customer response into stages, AARRR allows business owners to honestly focus on where their business could do more to help itself rather than blame the market or the entirety of their business. For example, the metrics may reveal that the business doesn’t draw as many customers as it needs. Then the business can begin to focus on how it might be failing to attract customers and take corrective measures. 

This was last updated in April 2019

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