This article is written by Mohammad Eslim, a Contributor Author at Startup Istanbul.
Adam Berk is a lean entrepreneur, lean teacher, and Serial Entrepreneur. He is one of the more intrepid experimenters. He is currently an Implementation Coach at Pearson and Entrepreneur-In-Residence at The Entrepreneurial Science Foundation.
Sea wolves, or pirates, have an important role in the business and NO I’m not talking about thievery, murder and other crimes. It’s just the famous AAARRR!!!
It’s funny to imagine Dave McClure wearing an eyepatch talking about it and explaining what it is in 500 startups, but the point here is that there is no other connection between him and piracy other than the ‘AAARRR!!’ which is equisetic.
The AAARRR stands for Awareness, Acquisition, Activation and Revenue, Retention and Referral for the RRR or triple R. so what are these and what is the whole point of this metrics?
First, Awareness is focused on gaining the attention of your potential customers, and it grows as people have a recollection of your product, brand or your services, so when they see that logo they know what it is. Traditional advertising like TV, radio, billboards are all marketing channels meant to drive awareness.
Second comes the Acquisition which is when you can begin to identify your customers as individual users. It’s considered as your first transaction with a user. Only instead of exchanging money for a product or service, you are typical exchanging some form of content for the permission to message them again in the future.
After that, the final A is for Activation and this is where your user actually tries your product. The differences between Acquisition and Activation are confusing, so it is important to remember you are solving a customers’ problem with content during the acquisition stage, but you are solving their problem with a sample of your good or service during Activation.
Regarding the Revenue, the first R, It is when your contacts finally are making the step to get out some money out of the pockets for some of your products which is important if you are about to make something big of your business.
Then comes the Retention, which is quite of importance for you to scale into a bigger, stable market. We can say it’s the amount of incremental revenue that you can generate from a given client considering that the goal is for your customers to cling to you. Speaking from a product management perspective, retention is an important group of metrics to keep an eye on. If your retention numbers are low, it is very likely that you are not marketing the right product to the right people. Re-think your offerings, or who you market to.
And the final R is grammatically incorrect (‘R’ can’t be ‘is’, can it? Whatever), the final R refers to Referrals are one of the most important, and often overlooked group of metrics to focus on—even more so than retention. New business isn’t the only reason to continue to develop a referral marketing strategy. In fact, 43% of social media users report buying a product after sharing or marking it as ‘favorite’ it on Facebook, Twitter or Pinterest.
For these reasons, the Referral stage is really a specialized Awareness stage, and why we sometimes refer to Referrals as “closing the loop.”