AARRR maps the customer lifecycle across five stages: Acquisition (how users find you), Activation (first valuable experience), Retention (do they return?), Revenue (do they pay?), and Referral (do they tell others?). It helps identify where the biggest leaks in the funnel are.
Building a metrics framework, diagnosing growth problems, and identifying the most impactful stage for product investment.
- ACQUISITION: What channels bring users in? What is CAC? Which sources convert best?
- ACTIVATION: What does a great first experience look like? What % of new users experience it?
- RETENTION: What % return? What are your D7, D30 retention rates?
- REVENUE: What % convert to paying? What is churn?
- REFERRAL: Do users recommend you? What drives referrals?
- Identify the leakiest bucket — invest there first
Acquisition: app store, word of mouth, social sharing. Activation: first time a user plays a non-searched track (discovery). Retention: weekly active listening. Revenue: free-to-Premium conversion and renewal rate. Referral: NPS and playlist sharing. In 2010-2015, the biggest leak was Activation — new users received an empty library and didn't know where to start.
Please contact the author for more information on these examples at linkedin.com/in/kshitijrege
- Tracking all five stages equally — find the leakiest bucket and focus there
- Treating Acquisition as the primary lever when Retention is broken
- Confusing activity metrics (logins) with genuine retention (meaningful, valuable usage)
- Hacking Growth — Sean Ellis & Morgan Brown
- Lean Analytics — Croll & Yoskovitz