The AARRR Matrix, the strategic issues
The AARRR matrix is used when creating a growth hacking strategy, this technique consists in attracting new customers through 5 different stages, each representing the company’s customer life cycle:
- Acquisition
- Activation
- Retention
- Referral
- Revenue
Each stage of the conversion funnel corresponds to a stage of the customer life cycle. The goal is to optimize them as much as possible by identifying the key performance indicators for each.
Definition of each stage of the AARRR
Acquisition
The Activation phase is used to identify so-called “hot” prospects, that is to say, they know the products offered by the company and can quickly enter into a product purchasing process. It is therefore appropriate to define an activation indicator which will correspond to an action by a user showing interest in a product or service offered by the brand. These activation indicators can be measured using various media such as subscription to the newsletter, the number of pages visited or the addition of a product to the basket. Identifying your indicators then makes it possible to improve a user’s first experience by adapting their needs according to their expectations and to understand what works best with their customers.
Retention
The Retention phase helps build customer loyalty by offering offers so that the customer returns to the site and repeats the purchase of products from the company. This step is decisive if we wish to maintain the growth of the company. It is therefore important to establish customer follow-up and propose actions based on customer behavior. This can materialize through targeted newsletters, posts on social networks or the establishment of regular blog articles on the website. The retention rate can be optimized by segmenting the audience and targeting customers who have been inactive for a long period of time in order to restart the interaction process.
Referral
The Referral phase materializes by the transformation of customers into prescribers of the company/brand. A prescribing customer is a customer who will talk to and advise the brand around him. This step is an essential lever to consolidate the growth of the company in the long term.
Revenue
The Referral phase materializes by the transformation of customers into prescribers of the company/brand. A prescribing customer is a customer who will talk to and advise the brand around him. This step is an essential lever to consolidate the growth of the company in the long term.
Strategic issues
The main challenge of the AARRR matrix is to optimize business growth and identify areas for improvement through each key performance indicator. The goal is to have an overall long-term vision and improve your conversion rate from one stage to the next.