AARRR Framework for Analyzing Business Metrics

Acquisition

Cost per Acquisition (CPA): This metric helps businesses understand the cost involved in acquiring a new customer.

Organic Traffic: Measures the visitors who come to a site from organic search results.

Activation

Percentage of new users who leave a review or search for a business: Indicates the engagement level of newly acquired customers.

Retention

Daily Active Users (DAU): Tracks the number of users who interact with a product or service daily.

Monthly Active Users (MAU): Measures monthly user engagement.

Frequency of app opens or website visits: Helps businesses understand how often users return.

Revenue

Average Revenue Per User (ARPU): Reflects the average income generated from each user.

Profitability of advertisement campaigns or premium listings: Assesses the financial effectiveness of marketing efforts.

Referral

Net Promoter Score (NPS): A metric used to assess customer satisfaction and loyalty.

Number of invites or shares by users: Indicates the viral aspect of a product or service.

Conclusion

The AARRR framework provides a structured approach to analyzing key business metrics revolving around acquisition, activation, retention, revenue, and referral. By understanding and optimizing these metrics, businesses can enhance their overall performance and growth. Improving each aspect of this model is crucial for sustained business success.