Startup Metrics for Pirates
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The document outlines the 'AARRR' framework for startup metrics focused on customer acquisition, activation, retention, referral, and revenue. It emphasizes the importance of measuring conversion rates and user experience at each stage of the customer lifecycle while utilizing various marketing channels and methods like A/B testing. Additionally, it provides practical examples of conversion metrics and encourages continuous improvement and iteration based on user engagement data.
Startup Metrics for Pirates
- 1. Startup Metrics for Pirates: AARRR !!! (Startup Metrics for Product Marketing & Product Management) Dave McClure Master of 500 Hats blog: http://500hats.typepad.com/ website: http://www.500hats.com/ slides: http://slideshare.net/dmc500hats/ * reminder: National Talk Like a Pirate Day is Sept 19 th !
- 2. Customer Lifecycle: 5 Steps to Success A cquisition : users come to the site from various channels A ctivation : users enjoy 1 st visit: "happy" user experience R etention : users come back, visit site multiple times R eferral : users like product enough to refer others R evenue : users conduct some monetization behavior AARRR!
- 3. Customer Lifecycle / Conversion Behavior Website.com 4. REFERRAL Emails & widgets Campaigns, Contests 5. Revenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, etc 2. Activation Homepage / Landing Page Product Features 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains 3. RETENTION Emails & Alerts Blogs, Content System Events & Time-based Features
- 4. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 5. Customer Lifecycle / Conversion Behavior Website.com Marketing Channels: largest-volume (#) lowest-cost ($) best-performing (%) 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
- 6. Customer Lifecycle / Conversion Behavior Website.com Activation Criteria: 10-30+ seconds 2-3+ page views 3-5+ clicks 1 key feature usage Do LOTS of landing page tests & A/B tests - just make lots of dumb guesses & iterate QUICK 2. Activation Homepage / Landing Page Product Features 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains
- 7. Customer Lifecycle / Conversion Behavior Website.com Automated emails are simple & easy retention feature lifecycle emails @ +3, +7, +30d status emails weekly/monthly event-based emails as they occur 2. Activation Homepage / Landing Page Product Features 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains 3. RETENTION Emails & Alerts Blogs, Content System Events & Time-based Features
- 8. Customer Lifecycle / Conversion Behavior Website.com Only encourage users to refer * after * they have “ happy” user experience; avg score >= 8 out of 10 2. Activation Homepage / Landing Page Product Features 4. REFERRAL Emails & widgets Campaigns, Contests 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains 3. RETENTION Emails & Alerts Blogs, Content System Events & Time-based Features
- 9. Customer Lifecycle / Conversion Behavior Website.com This is the part * you * have to figure out… I don’t know jack about your business 5. Revenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, etc 2. Activation Homepage / Landing Page Product Features 4. REFERRAL Emails & widgets Campaigns, Contests 1. ACQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains 3. RETENTION Emails & Alerts Blogs, Content System Events & Time-based Features
- 10. Types of Metrics & Measurement Qualitative: Usability Testing / Session Monitoring Watch what users do, figure out problems & solutions from small # of users Quantitative: Traffic Analysis / User Engagement Report what users do, track usage & conversion %'s for all or empirical sample # of users Comparative: A/B, Multivariate Testing Compare what users do in one scenario vs another, see which copy/graphics/UI are most effective Competitive: Monitoring & Tracking Competitors Track competitor activity & compare against yours; if possible compare channels, keyword traffic, demographic targeting, user satisfaction, etc. (see slide notes for links to tools & vendors)
- 11. Quantitative & Comparative Measurement Conversion Criteria: best-performing (%) channels / campaigns / copy largest-volume (#) channels / campaigns / copy lowest-cost ($) channels / campaigns / copy
- 12. Quantitative & Comparative Measurement Conversion Criteria: best-performing (%) channels / campaigns / copy largest-volume (#) channels / campaigns / copy lowest-cost ($) channels / campaigns / copy Measurement Components: Audience Segment (young women, regional metro, older singles) Channel Source (social network, SEM, organic, PR, etc) Campaign Theme / Brand Promise (“find a job”, “learn to cook”) Landing Page & CTA Copy & Graphics
- 13. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 14. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 15. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 16. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 17. Example Conversion Metrics (note: *not* actuals; your mileage may vary…) $2 3% Email Open / RSS view -> Clickthru Retention $10 1% Refer 1+ users who activate Referral $3 2% Refer 1+ users who visit site Referral $5 2% Repeat Visitor (3+ visits in first 30 days) Retention $25 1% User generates break-even revenue Revenue $3 2% Acct Signup (includes profile data) Activation $1 5% Email/Blog/RSS/Widget Signup (anything that could lead to repeat visit) Activation User generates minimum revenue Happy 1 st Visit (views X pages, stays Y sec, Z clicks) Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks) Visit Site (or landing page, or external widget) User Status $5 2% Revenue $.25 30% Activation $.05 70% Acquisition $.01 100% Acquisition Est. Value Conv % Category
- 18. Marketing Q: what channels / who do you market to? Design & Test Multiple Mktg Channels Select & Focus on Channels with: High Volume High Conversion Low Cost Measure *deeper* down the conversion funnel, not just to website / landing page Segment & Select channels & customers by conversion @ deepest possible level (ideally $$$)
- 19. Product Q: how do you choose what to build? Choose features for conversion improvement 80% on existing feature optimization 20% on new feature development Just guess, then A/B test … A LOT Measure conversion improvement Rinse & Repeat
- 20. Founder/CEO Q: What metrics do you choose to watch? Hypothesize Customer Lifecycle & Refine Choose 5-10 conversion steps Less, not More is better BUT measure & iterate Focus on conversion improvement Delegate each Metric to someone to OWN