The breakdown of AARRR (PIRATE) Metrics Framework

By Matthew Knoot

Here is another post in my series of Product Management cheat sheets. Today I am sharing a breakdown of the AARRR (PIRATE) Metrics Framework that is popular here in Silicon Valley. This framework is lean and mean and commonly used in startups. This framework helps us to approach a problem in a thoughtful, methodical, and analytical way while defining key KPI’s to track and their related metrics. I find this handy to follow along as I am working on a problem to ensure every step is taken with intention and meaning.

I like to think that other people would like to use this information as well so I figured I should share it with you all. Feel free to add me on LinkedIn and show some endorsement <3 if you like the information!

AARRR Metrics Framework

By Matthew Knoot

Sometimes called “Pirate Metrics,” popular in SaaS companies, and start-ups.

Used for “Reporting Metrics” not “Exploratory Metrics.”

Acquisition – metric for users that have downloaded the app

Activation – user has created account or signed up for mailing list etc.

Retention – how many users do you retain long term?

Referral – how many users are happy enough with the product that they refer it to others? (Can be tracked with referral incentive codes or affiliate links)

Revenue – how much revenue have you made per user?

EXAMPLE for how to apply this method.

Goals – What do you want to happen?

Signals – What is the thing we need to measure? Raw data from surveys and database.

Metrics – A signal expressed over time. (the number result)

SAMPLE: Assume a company offering a mobile app that requires sign up and offers in-app purchases.

Acquisition

Acquisition Goal: Maximize amount of new user app downloads.

Acquisition Signal: # of downloads recorded in app store.

Acquisition Metric: # of app downloads per week/month/year.

Activation

Activation Goal: Maximize # of users that create an account or sign up for mailing list.

Activation Signal: # of new registered users.

Activation Metric: # of accounts created vs. # of app downloads per week/month/year.

Retention

Retention Goal: Maximize the % of users that return and place a repeat order on a monthly basis.

Retention Signal: 1. Who has ordered lemonade? 2. When did they order the product?

Retention Metric: 1. Did customers from last week/month/year return this week/month/year?

Referral

Referral Goal: Maximize # of new users that used a referral code or affiliate link.

Referral Signal: # of new users that created accounts using a referral code or link.

Referral Metric: Total # of new users divided by # of users that created account using referral link or code per week/month/year.

Revenue

Revenue Goal: 1. Maximize the value of each purchase. 2.Maximize the number of users that complete a purchase.

Revenue Signal: 1. Average purchase value per user. 2. # of users that completed a purchase.

Revenue Metric: 1. Average purchase value per week/month/year. 2. # of total users vs. # of users that completed a purchase per week/month/year.