AARRR metrics for ecommerce
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The AARRR Metrics framework can be applied to DTC brands successfully. Simple and focused on sustainable growth, it's a great guide to business performance for entrepreneurs .
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AARRR metrics for ecommerce
- 1. AARRR Metrics for Ecommerce: The 5 pillars of consistent and repeatable growth
- 2. We owe it to… Dave McClure a founding partner of 500 Startups
- 4. Why you should care The framework is created with revenue and growth as a goal It’s simple and logical – one leads to the other Keeping those 5 metrics in check is a pretty good indicator of good business performance Each step can be improved over and over again to drive additional growth.
- 5. Why we like the concept Applicable to SaaS & Ecommerce A neat and simple analytics frame to follow Improving one metric secures improved performance on the next in line, too The term imitates pirate talk.
- 6. #1 Acquisition: Get customers in Read the whole Acquisition Guide here
- 7. Why is Acquisition important for Ecommerce? The UX comes after people are through your door. Get the right people in, not just many. = EFFECTIVE acquisition Case study: How a young company is growing customer base so much, it needs to start selling offline
- 8. How to measure Acquisition? Acquisition channels Cost Quality Conversion rate Volume
- 10. Facebook • 85% of ecommerce orders come through there • 1,85% the highest conversion rate in e- commerce among social media • 81-98% of all social media acquisitions for photography products, pet supplies, sports gear, jewelry, clothing, food, and beauty products Twitter • 53% of people expect a response within an hour when tweeting at a brand (for complaints, 72%). • Hashtags best for engaging during an event – both attendees and outsiders. • 49% of monthly users follow brands or companies. (16% on average for social networks). • A “Buy” button Pinterest • Great for visual content + branding • Search by term, no brand awareness needed. • Content is evergreen – repins show up in feed again and again. • 93% of users research on it before buying and 87% have made a purchase because of Pinterest • A “Buy” button Social Networks as Acquisition Channels
- 11. Paid acquisition All tools for paid KY traffic Google Adwords Promo emails by KY GSP Follow around the web Remarketing Banners in the display network Google Display Ads Paid search results Search Ads
- 12. Content for acquisition = Inbound marketing Content ideas for online stores How to Start Inbound Marketing for online stores Create & Measure Inbound Marketing for online stores People don’t want to buy right away. Like with SM, give to stay top-of-mind. Inform, educate, entertain, inspire. They’ll remember you.
- 13. #2 Activation: the first real touch Read the whole Activation Guide here
- 14. Why is Activation important for Ecommerce? On landing page, do something or leave. 96% of visitors are not ready to buy. Case Study: 20-year-old company engages customers online like a boss
- 15. What counts as activation? Registering Subscribing for newsletter/ blog Downloading a resource Following on social media Watching a demo Using a tool provided for free Browsing through gallery/ lookbook Reading content ...and logging back regularly ...and reading emails ...and keep coming back ...and being actively engaged ...till the end ...for quite some time ...and visit often ... for hours
- 16. #3 Retention: keep customers coming back Read the whole Retention Guide here
- 17. Why is Retention important for Ecommerce? One-time customers are more pain than gain. Happy customers do come back. Acquisition = 5x retention in cost +5% in retention = +25% profit 60 – 70% chance to sell to an existing customer vs 5-20% chance of converting a new one
- 18. Retention tactics [1/5] Virtual shopping assistance Make sure they’ll “walk out” happy with their choice, also minimizing returns and refunds. +30-40% in sales
- 19. Retention tactics [2/5] Follow up a few days after delivery Ask for feedback. Improve on it to attract more people like these. People want to influence the companies and to be part of the creation process.
- 20. Retention tactics [3/5] Customer support throughout Don’t undermine your own chances for another order from the same people. 67% of online shoppers use social media do contact a company for support.
- 21. Retention tactics [4/5] Surprise Rewards Wow them. Everybody loves that. Example occasions: anniversary of 1st purchase a pattern of regular purchases a very high-spending customer + new collection a new partnership + high-value customers birthday How to develop a Customer Retention program based on loyalty
- 22. Retention tactics [5/5] Emails with a twist Even your email offers should reflect your respect and care for your customers’ tastes. Base offers on: Purchase history Frequency of orders Spending habits Feedback received Known or assumed personal details (kids, family, hobbies, etc.)
- 23. #4 Referrals: Make them bring their friends Read the whole Referral Guide here
- 24. Why are referrals important for Ecommerce? Easy traffic Can be cheap, too Qualified – people influence each other on tastes and opinions. Set realistic expectations – less chance for disappointment, higher for activation. Higher LTV & AOV.
- 25. How referrals work A referral for one is an acquisition for another. • Tested by referring friend • True to expectation • Lead gained • Part of target audience • Like-minded • Recommendation trusted • Set expectations • Naturally share with close ones • To look cool or knowledgeable Pass on Quality traffic Positive experience Referral successful
- 26. Referral Tactics Content for fun [Games, quizzes, travel guides, recipes, videos] Free features Conversation starters [charity, freebies, surprise upgrades/ gifts/ gestures] User-generated content [visual] Provide them with samples to share Make it easier for them to show the experience. Tell me more about the tactics above!
- 27. How local culture can be an advantage for a special referral program? Target • Old-school • Doesn’t shop online • Food is important • Tight communities • Not tech- savvy Program • Ambassadors in neighborhoods • Help place orders • Community orders for free delivery • Work on sense of belonging to a group + exchange of recipes Result • Initial resistance overcome • Quality proven • Convenience appreciated • Part of the community • Stable cash inflow Read the whole Case Study here
- 28. #5 Revenue: the prove all four other metrics work Read the whole Revenue article here
- 29. Revenue is influenced by the other metrics Acquisition: Costs decrease net profit Activation: Activating the wrong people does not serve. Referrals: Weak brand means random leads. Retention: No stable cash flow with one-timers. Revenue
- 30. Analyze revenue by… Source • Where to spend your marketing budget Campaign • Stop the ineffective, re-run the best-performing ones. Incentive • Follow through what novelties work. Product • Which ones drive repeat business and high LTV? Customer • How to replicate high spenders’ experience on your site with others?
- 31. Extra sources of revenue for online shops Courses & classes Memberships Special resources (books, videos) Tickets to events Affiliate links to partners