Question

Explain in detail Dave McClure's pirate metrics.?

Answer 1

A former PayPal employee, Dave used a simple mnemonic to help drive home what he'd been talking about. And for doing that, he borrowed the oldest pirate joke in the book.. Acquisition, activation, retention, referral, and revenue, or AARRR, are now widely accepted as the five areas most crucial for startups to focus on.

Optimize Your Acquisition- Acquisition represents the first and most important step for any application. If you have no users, then your product will fail. But you do need to identify the correct metrics because you know the best way to monitor the acquisition — without that, you don't know whether you're really improving. You will not know if you spend money on the right channels and you will not know if you reach the right audience.To really track your acquisition numbers success, you need to track how many people you are converting into clients. Start checking and modifying everything from your landing page to your ad photos, until you are on top of the numbers, to find out what messages lead to real action.

Speed Up Your Activation- Activation is that magical time between a client discovering your product and falling in love with it. It's the "AHA!" moment in which your product 's value clicks, where ambivalence becomes habit and you have a real user on your hand. Building and testing new user flows to actually bring those AHA users! However, moments quicker and more effectively are among those confounding mixtures in marketing and software growth.

Retention- Retention of customers, or holding people around after they sign up or download your app, is how you turn your acquisition and activation success into growth. With low retention, or a "leaky bucket" of a product, you will lose more and more customers the more you ramp up your efforts to acquire them. You'll also be burning huge quantities of money in the process Bain & Co. reported that having new customers 7x more costly than keeping one around. Well-timed, targeted emails are the most potent tool to encourage retention. The inbox is one of the last places to reach out to clients in a personal, meaningful way. Few advertisers are getting it right, making email a big opportunity for those who are willing to put in time to personalize their messaging.

Referral - One of the most powerful ways of driving growth for your company is by referrals. That's because referrals are frictionless users are happy to share them if they get anything out of it and because you get prequalified for the new clients. A friend told them that it's worth checking out your product, and that will allow them to stick around and try it longer than your current average customer. Many entrepreneurs assume that the only true form of referral is the kind in which each new customer you gain refers to more than one or a viral coefficient k>1.

Revenue- Increasing sales is the only way to get more money from your clients than it costs to get them. That is governed by the ratio LTV: CAC. The Lifetime Value (LTV) is how much you earn from your customer while using your product. To get the customer, the customer acquisition expense (CAC) is what you spend on advertising, ads, meetings, steak dinners etc.