Aarrr metrics for ecommerce
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AARRR Metrics for Ecommerce: The 5 pillars of consistent and repeatable growth
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AARRR Metrics for Ecommerce: The 5 pillars of consistent and
repeatable growth
We owe it to…
Dave McClurea founding partner of 500 Startups
AARRR stand for…
Why you should care
The framework is created with revenue and growth as a goal
It’s simple and logical – one leads to the other
Keeping those 5 metrics in check is a pretty good indicator of good business performance
Each step can be improved over and over again to drive additional growth.
Why we like the concept
Applicable to SaaS & Ecommerce
A neat and simple analytics frame to follow
Improving one metric secures improved performance on the next in line, too
The term imitates pirate talk.
#1 Acquisition: Get customers inRead the whole Acquisition Guide here
Why is Acquisition important for Ecommerce? The UX comes after people are
through your door. Get the right people in, not just
many. = EFFECTIVE acquisition
Case study: How a young company is growing customer base so much, it needs to start
selling offline
How to measure Acquisition?
Acquisition channels
Cost Quality
Conversion rate
Volume
Acquisition channels SEM
Social network
s
SEO
PR
Campaigns/ Contests
Affiliate program
s
Blog
Social ads
Offline ads
Display ads
Events
Facebook• 85% of ecommerce
orders come through there
• 1,85% the highest conversion rate in e-commerce among social media
• 81-98% of all social media acquisitions for photography products, pet supplies, sports gear, jewelry, clothing, food, and beauty products
Twitter• 53% of people
expect a response within an hour when tweeting at a brand (for complaints, 72%).
• Hashtags best for engaging during an event – both attendees and outsiders.
• 49% of monthly users follow brands or companies. (16% on average for social networks).
• A “Buy” button
Pinterest• Great for visual
content + branding
• Search by term, no brand awareness needed.
• Content is evergreen – repins show up in feed again and again.
• 93% of users research on it before buying and 87% have made a purchase because of Pinterest
• A “Buy” button
Social Networks as Acquisition Channels
Paid acquisition All tools for paid KY traffic
Google Adwords
Promo emails by KY
GSP
Follow around the webRemarketin
g
Banners in the display
networkGoogle Display Ads
Paid search resultsSearch Ads
Content for acquisition = Inbound marketing
Content ideas for online stores
How to Start Inbound Marketing for online
stores
Create & Measure Inbound Marketing for online stores
People don’t want to buy right away. Like with SM, give to stay top-of-mind. Inform, educate, entertain, inspire.
They’ll remember you.
#2 Activation: the first real touchRead the whole Activation Guide
here
Why is Activation important for Ecommerce? On landing page, do something
or leave. 96% of visitors are not ready to
buy.
Case Study: 20-year-old company engages customers online like a boss
What counts as activation?
Registering Subscribing for newsletter/ blog Downloading a resource Following on social media Watching a demo Using a tool provided for free Browsing through gallery/ lookbook Reading content
...and logging back regularly
...and reading emails
...and keep coming back
...and being actively engaged
...till the end
...for quite some time
...and visit often
... for hours
#3 Retention: keep customers coming backRead the whole Retention Guide
here
Why is Retention important for Ecommerce?One-time customers are more pain than gain.
Happy customers do come back.
Acquisition = 5x retention in cost
+5% in retention = +25% profit
60 – 70% chance to sell to an existing customer vs 5-20% chance of converting a new one
Retention tactics [1/5]
Virtual shopping assistance Make sure they’ll “walk out” happy with their choice, also minimizing returns and refunds.
+30-40% in sales
Retention tactics [2/5]
Follow up a few days after delivery
Ask for feedback. Improve on it to attract more people like these.
People want to influence the companies and to be part of the creation process.
Retention tactics [3/5]
Customer support throughoutDon’t undermine your own chances for another order from the same people.
67% of online shoppers use social media do contact a company for support.
Retention tactics [4/5]
Surprise RewardsWow them. Everybody loves that.
Example occasions: anniversary of 1st purchase a pattern of regular purchases a very high-spending customer
+ new collection a new partnership + high-value
customers birthday
How to develop a Customer Retention program based on loyalty
Retention tactics [5/5]
Emails with a twist
Even your email offers should reflect your respect and care for your customers’ tastes.
Base offers on:Purchase historyFrequency of ordersSpending habitsFeedback receivedKnown or assumed personal details (kids, family, hobbies, etc.)
#4 Referrals: Make them bring their friends
Read the whole Referral Guide here
Why are referrals important for Ecommerce?
Easy trafficCan be cheap, too
Qualified – people influence each other on tastes and opinions.Set realistic expectations – less chance for disappointment, higher for activation.
Higher LTV & AOV.
How referrals work
A referral for one is an acquisition for another.
• Tested by referring friend
• True to expectation
• Lead gained• Part of target audience
• Like-minded• Recommendati
on trusted• Set
expectations
• Naturally share with close ones
• To look cool or knowledgeable
Pass on Quality traffic
Positive experienc
e
Referral successful
Referral Tactics Content for fun [Games, quizzes, travel guides, recipes, videos] Free features Conversation starters [charity, freebies, surprise upgrades/ gifts/ gestures] User-generated content [visual] Provide them with samples to share
Make it easier for them to show the experience.
Tell me more about the tactics above!
How local culture can be an advantage for a special referral program?
Target
• Old-school• Doesn’t
shop online• Food is
important• Tight
communities
• Not tech-savvy
Program
• Ambassadors in neighborhoods
• Help place orders
• Community orders for free delivery
• Work on sense of belonging to a group + exchange of recipes
Result
• Initial resistance overcome
• Quality proven
• Convenience appreciated
• Part of the community
• Stable cash inflow
Read the whole Case Study here
#5 Revenue: the prove all four other metrics work
Read the whole Revenue article here
Revenue is influenced by the other metrics
Acquisition:Costs decrease net
profit
Activation:Activating the
wrong people does not serve.
Referrals:Weak brand means
random leads.
Retention:No stable cash flow
with one-timers.
Revenue
Analyze revenue by…
Source • Where to spend your marketing budget
Campaign • Stop the ineffective, re-run the best-performing ones.
Incentive • Follow through what novelties work.
Product • Which ones drive repeat business and high LTV?
Customer • How to replicate high spenders’ experience on your site with others?
Extra sources of revenue for online shops Courses & classes Memberships Special resources (books,
videos) Tickets to events Affiliate links to partners
Sourceshttps://www.shopify.com/blog/12731545-which-social-media-platforms-drive-the-most-sales-infographic; https://www.shopify.com/blog/12731545-which-social-media-platforms-drive-the-most-sales-infographichttps://blog.bufferapp.com/social-media-stats-you-need-to-know?utm_source=Webbiquity.comhttp://www.convinceandconvert.com/social-media-strategy/7-surprising-statistics-about-twitter-in-america/http://www.socialmediaexaminer.com/how-to-use-twitter-buy-buttons-and-pinterest-buy-buttonshttps://blog.pinterest.com/en/pin-trends-weekhttp://skyrocket.is/insight/how-pinterest-drives-ecommerce-conversions/https://www.marketingtechblog.com/social-media-ecommerce/http://www.socialmediaexaminer.com/how-to-use-twitter-buy-buttons-and-pinterest-buy-buttons/
https://www.youtube.com/watch?v=irjgfW0BIrwhttp://blog.hubspot.com/insiders/lead-nurturing-tipshttps://econsultancy.com/blog/11051-21-ways-online-retailers-can-improve-customer-retention-rates/https://www.groovehq.com/support/social-media-customer-service-tips
http://www.extole.com/blog/6-reasons-why-referred-customers-are-your-best-customers/
