Lucas Hamon May 12, 2021 8:01:11 PM 14 min read

AARRR You Kidding Me with these Pirate Metrics?

Successful businessman on the top of a mountain holding pirate flag-1

Remember when impressions, likes, and shares were enough?

Me either... not even when they were considered to be the ideal of marketing success... the pinnacles of measured branding.

do, however, remember when inbound leads were the gold standard, and I had no problem selling services for lead generation in a vacuum.  So, please don't take offense.

Today, growth is measured in a much more comprehensive manner, and agencies such as Orange Pegs are expected to have a much larger sphere of influence than just a single aspect of the sales continuum.... especially when dealing with businesses in high growth mode or trying to get there.

Enter the AARRR Pirate Metrics Framework - the most important accountability standard any investment in growth can be held to.

Before I break it down, I want to add another A to the mix...

This is what it stands for:

  1. Acquisition
  2. Activation
  3. Revenue
  4. Retention
  5. Referral

Right between Activation and Revenue OR between Revenue and Retention, we'd like to add "Adoption" - depending primarily on the revenue cycle and where success can be attributed.

Typically, for a SaaS it looks like this:

  1. Acquisition
  2. Activation
  3. Adoption
  4. Revenue
  5. Retention
  6. Referral

For a Professional Service it looks like this:

  1. Acquisition
  2. Activation
  3. Revenue
  4. Adoption
  5. Retention
  6. Referral

Quick note: we're talking about the entire sales continuum today, which means that we're not limited to what marketing has the capacity to influence. This is also about sales, production, and the overall direction of your business. For this exercise, however, we're going to focus primarily on sales and marketing.

Let's break it down, shall we?

1 - Acquisition

One of the simplest acquisition metrics is lead generation. Basically, visitors that come to your website or app give you their information.

Maybe you buy this information off of a list or vendor, or, but ideally, this information is given to you willingly and directly from the human being tied to it.

Inbound lead generation, a method of attracting visitors to your website through SEO, blogging, social media, and paid media--and converting them into leads through gated content offers, is an important aspect to growth. However, this is the very beginning of the buyer's journey, not the end, so those who participate in the growth flywheel shouldn't consider it to be a success on its own.

It's also not just the job of marketing to generate noise and leads. Don't forget about sales! They too can drive visitors to the website by way of calling, social media, and networking.

Acquisition Metrics:

  • Leads
  • Marketing Qualified Leads
  • Sales Qualified Leads

Acquisition KPIs:

  • Ranked keywords
  • Impressions
  • Traffic
  • Click and bounce rates
  • Visitor-to-contact ratio
  • Landing page conversion rates

2 - Activation

Your leads need to raise their hand at some point and tell you that they want to engage with your business in the sales cycle. This can happen by way of signing up for a trial on your software or going through the discovery process with your sales team.

You can activate your leads with sales calls or emails, marketing emails, social media, chat bots, and more. 

Activation Metrics:

  • Discovery calls set (Deals created)
  • Trial sign-ups
  • B2B2C program sign-ups

Activation KPIs:

  • Email open/reply/click rates
  • Sales call connects

 


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3 (or 4) - Onboarding

As previously mentioned, onboarding comes before or after revenue, depending on your sales cycle.

In the case of B2B2C SaaS, you're likely going to go through onboarding sequences after you close the business... I'm specifically referring to any app dedicated to healthcare offered through businesses or something along those lines. Trial sign-up is another key indicator of revenue and retention success. 

Pre-Revenue Onboarding Metrics:

  • Critical features activated
  • Payment method received

Pre-Revenue Onboarding KPIs:

  • User signup complete
  • Terms and conditions accepted
  • Profile created
  • Onboarding call completed

For the businesses where Onboarding occurs after revenue, such as in professional services where first payment is due prior to work commencing, it will look something like this:

Post-Revenue Onboarding Metrics:

  • Plan delivered
  • SLA signed
  • Tools engineered to customer specifications
  • All RFIs fulfilled

Post-Revenue Onboarding KPIs:

  • Kick-off meeting held
  • Project management and communication tools agreed upon
  • Accounting/billing cycle determined
  • Gaps identified
  • Solution planning complete

 

4 (or 3) - Revenue

Revenue metrics are also dependent on the business type. A B2B, for example, will likely require an executed SOW and paid invoice to consider revenue success. Whereas a SaaS may not generate revenue until individual users are activated after the contract is signed.

Revenue Metrics:

  • First payment received
  • Signed SOW (sometimes considered a KPI)
  • Customer lifetime value (LTV)

Revenue KPIs:

  • Signed MSA
  • Signed SOW
  • Payment information entered
  • Trial expired without cancellation
  • Customer acquisition rate

 

5 - Retention

If your contracts are monthly vs annual, you may have different metrics to measure here as well, but recurring revenue is the key.

Retention Metrics:

  • Renewal rate
  • Early termination rate
  • Recurring revenue
  • Upsell revenue

Retention KPIs:

  • User-behavior metrics (are they logging in or engaging with your program?)
  • Customer service engagements & resolutions
  • Survey results

 

6 - Referral

This is an easy one... are they sending you business, and are you able to close it? Just like everything above, this can come from both sales and marketing. Of course, you can also generate referrals through production and the app itself.

Referral Metrics:

  • Referral leads closed
  • Referral revenue generated

Referral KPIs:

  • Referral leads received

 

Where are your trouble spots?

Whether you're trying to fill the top of the funnel with more leads, generate better outcomes in the sales cycle, retain your clients long-term, or anything in between, our Growth Marketing Services are designed to help. 

Click HERE to learn more:

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Lucas Hamon

Over 10 years of B2B sales experience in staffing, software, consulting, & tax advisory. Today, as CEO, Lucas obsesses over inbound, helping businesses grow! Husband. Father. Beachgoer. Wearer of plunging v-necks.

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