Jan 05, 2021 | by Budi Tanrim
Connect user and business with AARRR framework
“We need to double our revenue. How can we do this?” Bob asked.
“First, let’s take a look at our funnel data,” I replied.
When you work in a product team, you’ll hear that term a lot. It describes how many users move from when they discovered your product until they convert.
The simple framework I usually use is AARRR. It stands for Acquisition, Activation, Retention, Revenue, Referral.
- Acquisition is when the potential user visit your website
- Activation is when users create an account
- Retention is when they come back
- Revenue is when users order and paid
- Referral is when users recommend the product.
“It seems that our activation is poor. Only 4% of people signed up.” Bob said.
“Ok, let’s find out what problems the user had in that area,” I suggested.
Scenario: When you not sure where to start
When your team has a specific business objective, you don’t know where to start, and you still want to practice human-centered. You can look at the AARRR funnel as a starting point. You use this to oversee your product’s overall performance and identify which part of the funnel is not performing. Looking at the funnel will not give you the why, though. It tells you where is the broken part and how many people doing what.
Sometimes, it can be as obvious as your signup button is broken, and you can fix it right away. But when it is risky. Don’t make a random move and build something that will not have any impact. Dig into the why, instead. Do an interview or survey or whatever makes sense to your context.
Scenario: When you have user journey but want to translate it to business
User journey can be translated into this framework nicely. You can do this and be a better partner to the business team. So, here’s how it looks:
While this framework is great. It requires an small effort to setup. The data scientist has to work together with the developer to set the tracker and ensure the data can be displayed in a dashboard for your team to analyze this.