Metrics, schmetrics. What the heck is all that noise about??

Build, measure, learn. Actionable metrics vs. vanity metrics. Cohort analysis. Sorry, I may be simple, but can you speak English please?

I get the principle. We want to build products people love. We want to find a repeatable and scalable way to reach customers and make money. And metrics can help us measure if we are on the right track to achieve that. You can also talk to customers (and you should), but metrics are cool as you measure what customer do, not what they say.

I get that. But how do I get started?

Can Dave McClure’s  AARRR – metrics for pirates help? Dave breaks down the path from an unaware visitor to a happy paying  customer into 5 steps.

1. Acquisition: how effective are your channels in generating leads? E.g. % blog readers ending up on your landing page. Or Google Ad click through rate.

But also, user’s journey on your site, from an unaware visitor to an interested prospect. E.g. % of visitors that don’t bounce from the sales pages, and actually end up on the signup page.

Or in case of face-to-face sales, acquisition could be % calls / e-mails resulting in the first meeting.

2. Activation: how effective are you in delivering on your promise? E.g. % of visitors of the sign-up page making it to their first gratifying experience with the product’s main feature.

Think of playing a game for the first time. Good games will allow you to quickly experience the rush of accomplishing the game’s basic objective: shooting down that zombie, taking down that cute piggy with an angry bird, or collecting some obscure treasure.

Your first versions don’t necessarily have to be optimized for conversion – but for learning. You may introduce extra steps to see where people fall off.  Or require additional info (e.g. phone number to call and check why the customers are not sticking).  

3. Retention: do customers come back to your product? E.g. % of users that come back 3 times in first 30 days.  Or % of users that complete a significant task (e.g. in my case actually complete a grant proposal).

You’ll probably rely on things like e-mail, loyalty programs or social pressure to pull users back in. One thing to measure then will be the effectiveness of these tactics.

4. Revenue: the bottom line. How many customers actually pay after the free trial is up? Or, how many customers, after seeing your demo, sign the line that is dotted?

Revenue only happens after we acquire and activate the customer,  and typically only after some repeat use. Therefore, driving revenue up will require driving these conversions first.

However, not all customers are created equal. I might find a channel that drives lots of uninteresting traffic to my website. Traffic that does not convert. E.g. freeloaders. The lesson here is that we need to track a single customer all the way until revenue or referral (of new customers that do convert!). And drive the segment that converts. 

5. Referral: your existing customers become your marketers. Happy with your product, users spread invites through e-mail or social networks.

You’ll probably include features that make it easy for your most passionate users to spread their love of your product. Or even offer them some incentive. Measure how effective are these mechanisms.

A lesson from Dave: don’t include viral features while your product still sucks. Bad news can spread as easily. 


Cool, these were all great examples of things I could measure. There are still a couple of things to do:

  • Map actions of MY users on MY website to Dave’s 5 steps (define AARRRs in terms of concrete actions on my website)
  • Pick a few key metrics to focus on. We are simple creatures after all
  • Build a simple dashboard that is easy to update, and is accessible to everyone in my team

So, am I ready to start yet?

Oh snap! I forgot the most important thing! We first need more users willing to log in and use our product. Need some funding? ;-) Seriously, if you haven’t launched yet, the most important steps will be the first 2: Acquisition (can you get customers for your beta launch) and Activation (can you get them to sign up and consume the value proposition of your product). 

One comment

  1. Wow, this paragraph is fastidious, my sister
    is analyzing such things, so I am going to inform her.

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