How Product Managers can use AARRR Framework ?
As discussed in the last post , AARRR empowers PMs to analyse & optimize each stage of the customer journey by thorough focus on one single metric which is known as TMTC ( Top Metric That Count ). In today’s post, I will share the details regarding the application of the AARRR framework by the PMs in their product funnels.
What is AARRR framework ?
It comprises 5 stages a customer experience in their product journey. The framework was initially crafted for startups but lately it has been found valuable & helpful for the larger organization as well.
The strength of the framework lies in the fact that it give just 5 metrics as an output, mapped across each stage & thus helping the organization to focus on their goals.
How PMs can apply AARRR framework?
The framework measures the performance of your user funnel. For instance , there are 10K users visiting your app daily, out of those how many are the transacting users?
The funnel view ensures that drop offs are captured & thus addressing the loopholes in the stages.
Let’s understand with the help of an example .
The framework comprises of 5 stages, each stage mapped with TMTC ( Top metric that count ).
The TMTC is the key metric which solely captures your mind within that stage for a particular duration of time. Its simplicity ensures that the stakeholders are convinced, aligned & are on the same page towards addressing one single goal.
Example
Let’s say you are a PM of Hyperlocal Organic food app where users can browse through various organic fruits and vegetables such as Mango ( harvested in a farm near you ) & users can place the order in one click. There is a rise in awareness about the benefits of Organic food & its impact on building immunity in the wake of COVID. The app is the solution for Organic food discovery problem.
Since it’s a discovery solve so the idea is to increase awareness & land those users searching for organic food to your playstore app. As a PM , you got an attractive landing page ready that lets you user download the app from Google Playstore.
Stage 1 — Acquisition
In this stage , the TMTC is to increase the # of App Installs, this showcase that how many users are landing on your Web page & subsequently installing the Android App. It also helps in measuring the performance of the landing page in terms of content & intuitive CTA.
Surrogate metrics to be measured :-
- # of Users landing on Web page.
- # of Users landing on the Google Playstore
- Conversion rate of users landing from web page to Google Playstore
TMTC (Top Metric That Count) :-
- # of App Installs.
Stage 2 — Activation
The stage tries to captures the first experience which user has with the your app. The TMTC for this could be # of items browsed by the user post first login. This depicts that users have understood about your product & how it able to solve their discovery problem.
Surrogate metrics to be measured :-
- Time spent on the App by the user after first login
- # of repeat logins after signup in first 10 days
- # of items added to the cart
TMTC (Top Metric That Count) :-
- # of items browsed by the user post first login
Stage 3 — Retention
In Retention stage, the TMTC should be Repeat Ratio . It captures the no of users coming back to the app. This enhance the confidence of the problem solving ability of the app & highlights that users are finding it valuable and helpful over a period of time.
Surrogate metrics to be measured :-
- Daily Active Users , Weekly Active Users & Monthly Active Users
- Login Users Trend — Daily , Weekly & Monthly
- Churn Ratio
TMTC (Top Metric That Count) :-
- Repeat Ratio
Stage 4 — Referral
# of App Installs through referral program is the TMTC . It measures the performance of your referral program & corresponding impact of word of mouth. The app should ensure that it provide sufficient awareness about the referral benefits.
Surrogate metrics to be measured :-
- # of clicks on “ Share invite “ in the Refer section
- Touch Point Score ( TPS )
- # of signups using referral code
TMTC (Top Metric That Count) :-
- # of App installs through Referral program
Stage 5 — Revenue
Revenue per user is the TMTC in this stage. This metric strengthen the fact that users are successfully making a purchase in the app & thus deriving value out of the offerings.
Surrogate metrics to be measured :-
- Customer Life Time Value ( CLTV )
- # of transactions per user
- Average Ticket Size of the order
TMTC (Top Metric That Count) :-
- Revenue per user
Overall , the AARRR framework is the most straightforward & efficient method to optimize your customer journey at each stage.
Thanks for reading! If you’ve got ideas to contribute to this conversation please comment. If you like what you read and want to see more, clap me some love! Follow here, or connect with me on LinkedIn
