startup metrics for pirates - copied by dave mcclure
DESCRIPTION
This is a 5-step model for creating a metrics framework for your business & customers, and how to apply it to your product & marketing efforts. The "pirate" part comes from the 5 steps: Acquisition, Activation, Retention, Referral, & Revenue (AARRR!)The origninal presentation is here: http://www.slideshare.net/dmc500hats/startup-metrics-for-pirates-long-versionTRANSCRIPT
”what!?”
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/
Customer Lifecycle: 5 Steps to Success
• Acquisition: where users come from
• Activation: happy first experience
• Retention: users come back
• Referral: users tell other people
• Revenue: you make MONEY!
Customer Lifecycle / Conversion Behavior
Website.com
4. REFERRAL5. Revenue $$$
2. Activation
1. ACQUISITION
3. RETENTION
Customer Lifecycle / Conversion Behavior
Website.com
Marketing Channels:• largest-volume (#) • lowest-cost ($)• best-performing (%)
1. ACQUISITION
SEOSEM
Apps & Widgets
Affiliates
PR Biz Dev
Campaigns, Contests
Direct, Tel, TV
Social Networks
Blogs
Domains
Customer Lifecycle / Conversion Behavior
Website.com
Activation Criteria:
• 10-30+ seconds
• 2-3+ page views
• 3-5+ clicks
• 1 key feature usage
Do LOTS of landing page tests & A/B tests - just make lots of dumb guesses & iterate QUICK
2. Activation
Homepage / Landing Page
Product Features
1. ACQUISITION
Customer Lifecycle / Conversion Behavior
Website.com
Automated emails are simple & easy retention feature
• lifecycle emails @ +3, +7, +30d
•event-based emails as they occur
2. Activation
1. ACQUISITION
3. RETENTION
Emails & Alerts
Blogs, Content
System Events & Time-based Features
Customer Lifecycle / Conversion Behavior
Website.com
Only encourage users to refer *after* they have “happy” user experience; avg score >= 8 out of 10
2. Activation
4. REFERRAL
Emails & widgets
Campaigns, Contests
1. ACQUISITION
3. RETENTION
Customer Lifecycle / Conversion Behavior
Website.com
5. Revenue $$$
Biz DevAds, Lead Gen, Subscriptions, etc
2. Activation
This is the part *you* have to figure out… I don’t know jack about your business
4. REFERRAL
1. ACQUISITION
3. RETENTION
AARRR!
Example Conversion Metrics(note: *not* actuals; your mileage may vary…)
Category User Status Conv % Est. ValueAcquisition Visit Site
(or landing page, or external widget)100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup(anything that could lead to repeat visit)
5% $1
Activation Acct Signup(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2Retention Repeat Visitor
(3+ visits in first 30 days)2% $5
Referral Refer 1+ users who visit site 2% $3Referral Refer 1+ users who activate 1% $10Revenue User generates minimum revenue 2% $5Revenue User generates break-even revenue 1% $25
Example Conversion Metrics(note: *not* actuals; your mileage may vary…)
Category User Status Conv % Est. ValueAcquisition Visit Site
(or landing page, or external widget)100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup(anything that could lead to repeat visit)
5% $1
Activation Acct Signup(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2Retention Repeat Visitor
(3+ visits in first 30 days)2% $5
Referral Refer 1+ users who visit site 2% $3Referral Refer 1+ users who activate 1% $10Revenue User generates minimum revenue 2% $5Revenue User generates break-even revenue 1% $25
Example Conversion Metrics(note: *not* actuals; your mileage may vary…)
Category User Status Conv % Est. ValueAcquisition Visit Site
(or landing page, or external widget)100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup(anything that could lead to repeat visit)
5% $1
Activation Acct Signup(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2Retention Repeat Visitor
(3+ visits in first 30 days)2% $5
Referral Refer 1+ users who visit site 2% $3Referral Refer 1+ users who activate 1% $10Revenue User generates minimum revenue 2% $5Revenue User generates break-even revenue 1% $25
Example Conversion Metrics(note: *not* actuals; your mileage may vary…)
Category User Status Conv % Est. ValueAcquisition Visit Site
(or landing page, or external widget)100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup(anything that could lead to repeat visit)
5% $1
Activation Acct Signup(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2Retention Repeat Visitor
(3+ visits in first 30 days)2% $5
Referral Refer 1+ users who visit site 2% $3Referral Refer 1+ users who activate 1% $10Revenue User generates minimum revenue 2% $5Revenue User generates break-even revenue 1% $25
Example Conversion Metrics(note: *not* actuals; your mileage may vary…)
Category User Status Conv % Est. ValueAcquisition Visit Site
(or landing page, or external widget)100% $.01
Acquisition Doesn't Abandon (views 2+ pages, stays 10+ sec, 2+ clicks)
70% $.05
Activation Happy 1st Visit(views X pages, stays Y sec, Z clicks)
30% $.25
Activation Email/Blog/RSS/Widget Signup(anything that could lead to repeat visit)
5% $1
Activation Acct Signup(includes profile data)
2% $3
Retention Email Open / RSS view -> Clickthru 3% $2Retention Repeat Visitor
(3+ visits in first 30 days)2% $5
Referral Refer 1+ users who visit site 2% $3Referral Refer 1+ users who activate 1% $10Revenue User generates minimum revenue 2% $5Revenue User generates break-even revenue 1% $25
MarketingQ: What channels / who do you market to?
• Test Multiple Channels & Different Segments• Select & Focus on:
– High Volume– High Conversion– Low Cost
• Measure *deeper* down the conversion funnel, not just to website / landing page
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• Rinse & Repeat
Founder/CEO
Q: What metrics do you choose to watch?
• Hypothesize Customer Lifecycle & Refine– Choose 5-10 conversion steps
• Measure & Iterate• Delegate each Metric to someone to OWN
Make Metrics your religion
If it’s not measurable, it’s not actionable
Rydell & Quick