Introduction

Product managers must understand user behavior to drive growth. AARRR framework, is a part of Pirate Metrics, helps focus on important metrics. Dave McClure created this concept. It breaks user engagement into five areas: Acquisition, Activation, Retention, Referral, Revenue. Each area guides product excellence journey. Shows where users come from, how they use product, if they pay.

Many struggle to know where to start with product metrics. This guide explains AARRR framework for product people using LiveSession. Focus on these key metrics to turn data into strategies. Improve user engagement, drive product adoption. Now we look at how to use Pirate Metrics for product led growth growth.

Why should you implement Pirate Metrics?

Dave McClure created this concept to solve real problem. Young companies often do not know which metrics matter most. They struggle to separate useful data from vanity metrics. Social media likes, website visitors - these numbers look good but do not always help business grow. Pirate Metrics changes this. It gives clear focus on metrics that drive real growth. For product-led companies, this framework is especially valuable. It turns attention to user behavior that impacts business directly. You see how users find your product, start using it, stay with it, tell others, and pay for it. This practical approach helps make decisions based on facts, not just feelings. By using Pirate Metrics, you stop guessing and start knowing what works for your product and business.

Section 1: Understanding Pirate Metrics

AARRR framework breaks user journey into five key stages. Each stage provides valuable insights into how users interact with your product, helping you identify strengths and areas for improvement that all lead to more product growth.

Acquisition focuses on how users discover your product. Through which channels your potential customers find you? It could be social media, search engines, or direct referrals.

Activation measures whether users are taking the desired actions that indicate they are experiencing value from your product. This could involve completing an onboarding process or engaging with key features.

Retention tracks the ongoing engagement of users with your product. It seeks to answer whether users continue to find value over time and return repeatedly for interactions.

Referral assesses whether satisfied users are willing to recommend your product to others. This stage is vital for understanding the organic growth potential of your user base.

Revenue evaluates the financial aspect of your product's success. It looks at whether users are willing to pay for your offering and how much they contribute to your overall revenue.

Section 2: How to Implement Pirate Metrics?

To make the most of Pirate Metrics, you need the right tools. A product analytics software is essential. The problem though with most of them is a lot of noise. Many popular options can be complicated and hard to set up quickly. Or they often lack the customization you need to track specific metrics effectively. In this section, we will show you how to create your own dashboards for Pirate Metrics using LiveSession.

This platform offers a straightforward approach, allowing you to easily tailor your metrics to fit your needs. By using LiveSession, you can turn data into actionable insights.

Acquisition metrics

In the AARRR framework, acquisition is the first critical step in bringing users to your product. It encompasses all the channels through which potential customers discover your offering, such as SEO, social media, marketing campaigns, integrations, and advertising. Understanding where your users come from is essential for optimizing your marketing efforts and maximizing reach.

To start implementing acquisition metrics in LiveSession, follow these specific actions:

1. Set Up Your LiveSession Account: It’s free to test, but you only have 14 days to build the dashboard for tracking pirate metrics. (It will take you max. 1 day with this playbook)
2. Identify Acquisition Channels: Determine which channels you are currently using for user acquisition. This could include organic search traffic, social media platforms, or paid advertising campaigns.
3. Create custom user segments for each channel:
   1. SEO: referrer google
   2. Directories: referrer getapp OR g2 OR capterra
   3. Social media: referrer facebook OR reddit OR linkedin
   4. Paid advertising (UTM Tag is CPC)
4. Track Key Metrics: Use LiveSession to monitor essential metrics such as:

• Number of Signups: Track how many users sign up for trials or demos through different channels.
  • Create text card in your first dashboard and call it “Acquisition metrics” for description
  • Create multiple metrics (depending on how many main acquisition channels you have) from scratch. To define a metric use a count of unique users and select the segment you created in the previous step.
  • This is how it could look like for you

Activation Metrics

Activation refers to users taking the desired actions, or next steps, after their first encounter with your company’s product, website, or content. For example:

• Visiting additional pages
• Experimenting with additional features
• Spending a given amount of time in a key feature
• Signing up for your newsletter
• Signing up for your free trial of premium features

To implement activation metrics in LiveSession, consider the following specific actions:

Define Key Activation Actions

Identify which user actions are most indicative of activation for your product. This may include completing onboarding, using specific features, or reaching an "AHA moment."

This graphic by Eugene Sagal from thegrowthloop.io will help you define your key activation metrics

Set Up Tracking for Activation Events

Use LiveSession to track these key actions. You can create custom events to monitor when users complete important tasks or engage with specific features.

Pass events from Google Analytics or Segment you already have created

Create Dashboards for Activation Metrics

Build custom dashboards in LiveSession to visualize your activation metrics. This allows you to see trends and identify areas where users may be struggling.

For LiveSession product team one of the core activation metrics is “users who created metrics”

• Create a dimensional metric grouped by email to view a list of users who performed key activation actions

• Create a number metric filtering custom event

• Create a dimensional metric grouped by custom properties: “plan”

Here’s how it would look like after you add all of them to the dashboard

Utilize Session Replays

Review session replays of newly activated users to gain insights into their experiences and identify any friction points that may hinder their journey.

By building the metrics from previous steps the session replay regular routine is much more intentional to look for more qualitative data targeted at each component of AARRR Framework.

Retention Metrics

Retention metrics are crucial for understanding how well your product keeps users engaged over time. These metrics help you assess the long-term value of your users and the overall health of your product. By focusing on retention, you can identify areas where users might be losing interest and take steps to improve their experience.

To implement retention metrics in LiveSession, consider the following specific actions:

1. Define Your Retention Period: Determine what timeframe is most relevant for your product (e.g., daily, weekly, or monthly active users).

2. Set Up Cohort Analysis: Use LiveSession's custom segmentation to create cohorts based on user sign-up dates or activation dates.

3. Track Key Retention Events: Identify and monitor the actions that indicate ongoing engagement with your product.

4. Create a Retention Dashboard:

1. Add a "Retention Metrics" text card to your dashboard for organization.
2. Create a metric to track the number of sessions over time grouped by segments

5. Monitor Feature Usage: Track which features are used most frequently by retained users to understand what keeps them coming back.

By implementing these retention metrics in LiveSession, you'll gain valuable insights into user behavior patterns and be better equipped to make data-driven decisions to improve user retention and overall product success.

Referral Metrics

Referral metrics are crucial for understanding how well your product encourages users to recommend it to others. Due its naturally hard to measure nature.

To implement referral metrics in LiveSession, consider the following specific actions:

1. Set up referral tracking: Implement custom URL parameters or referral codes to track user acquisitions through different referral channels.

2. Create referral funnels:

1. For each referral channel (e.g., social media, email, affiliate programs), create a separate funnel.
2. Define funnel stages: Referral source → Landing page visit → Sign-up → Activation events
3. Use LiveSession's funnel analysis to visualize conversion rates at each stage for different referral sources.

3. Analyze funnel performance:

1. Compare conversion rates between different referral channels to identify the most effective sources.
2. Use session replays to understand user behavior at each funnel stage and identify potential drop-off points.

By implementing these referral metrics in LiveSession, you'll be able to optimize your referral strategies and leverage the power of word-of-mouth marketing to drive growth for your product.

Revenue Metrics

Revenue metrics are crucial for understanding the financial health of your product and determining whether your user acquisition and retention efforts are translating into profitable growth. These metrics help you assess the monetary value your users bring to your business over time.

To implement revenue metrics in LiveSession, consider the following specific actions:

1. Track Average Credits per New Subscription: Create a metric to monitor the average number of credits purchased with each new subscription. This helps gauge the initial value of new users.

2. Monitor New Subscriptions: Set up a metric to track the number of new subscriptions added in the past 3 months. This provides insight into your product's growth rate.

3. Analyze Subscription Cancellations: Implement a custom event to track subscription cancellations. This helps identify churn rates and potential areas for improvement.

4. Create a Revenue Dashboard:

1. Add a "Revenue Metrics" text card to your dashboard for organization.
2. Create metrics for average credits per subscription, new subscriptions over time, and subscription cancellations.
3. Set up dimensional metrics to visualize trends in these areas over the past 3 months.

By implementing these revenue metrics in LiveSession, you'll gain valuable insights into your product's financial performance, subscription trends, and potential areas for improvement. This data-driven approach will enable you to make informed decisions to optimize your pricing strategy, reduce churn, and increase overall revenue.

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