Community Tip: Revisiting AARRR!
This Community Tip will revisit analyzing user behavior according to the AARRR analytics framework. By using Mixpanel to measure and iterate on the customer lifecycle, you can measure how business and product decisions independently affect acquisitions, activations, retention, revenue, and referrals.
Please note this this Community Tip will focus solely on our Engagement reports; if you’re interested in learning how to apply the same AARRR framework for People notifications, check out our AARRR! for People Community Tip!
Making decisions without data leaves us in the dark, guessing as to whether or not we’ve optimized our site or app. When one is faced with data overload, it can be difficult to get through the noise and find the most impactful insights, which means lost time, lost efficiency, and potentially frustration.
Dave McClure advocates for lean metrics with his Startup Metrics for Pirates (AARRR!), which outlines the need for a company to focus on the most high-impact metrics to make meaningful product and marketing decisions throughout a user’s lifecycle: Acquisition, Activation, Retention, Revenue, and Referral.
So… Why are pirate metrics important and how can Mixpanel help you make data driven decisions on your product and marketing for each of these metrics? Let’s get started.
We’ve just launched a business, so first thing’s first: we need to acquire customers to sell our product to! Acquisition is important because we can’t run our company by making no sales to customers we don’t have. To acquire customers, let’s say we initially decide to have some Google Ads, Facebook, Twitter, and LinkedIn campaigns, as well as an email marketing campaign.
Given all of this marketing spend, how do we know where our resources are best being spent? If we devote most of our budget and effort into an acquisition source that isn’t generating many new customers for us, this wouldn’t be the best use of our money and time. Therefore, it’s important to keep track of where our users come from to optimize the amount of resources we put into each channel.
By utilizing Mixpanel’s mobile and web attribution capabilities, we can track our direct attribution and make data-driven decisions to find our best performing acquisition channels. Once we find our top channels, we can appropriately market our product towards and/or shift our marketing spend towards these high performers.
How many new registrations did we have this past month, and what sources did the users come from?
The next “A” stands for activation: a customer’s first experience with our product. We want to ensure that our customers have a great first experience with our site or app; after all, if they don’t, will they really want to come back and keep using our product? This is our chance to make a great first impression on our users; we want to make sure we give them an easy, seamless, and positive first experience.
With Mixpanel, we can easily track our first time users, allowing us to zero in on each customer’s very first visit. McClure advocates to diligently A/B test this initial user experience in order to optimize the registration funnel — this means that we can try changing our landing page, our website colors, our text, and even the number of steps in the registration process to see what drives the most sign up conversions.
Which landing page variant is responsible for the most signup conversions?
Once we’ve ensured our customers have a great first experience with our product, we want to make sure they come back to use our product again! From our previous research, we know that if our customers are engaged with our product, they would be more likely to purchase something from us — meaning it is essential that users come back and continue to use our product over time.
Understanding our retention can help us figure out when to re-engage with our users, and this is where Mixpanel targeted notifications can help us quite a bit. Using Mixpanel’s retention report, we can measure how well we’re able to retain our users, what features of our product users come back to most often, and measure how our notifications result in downstream usage effects.
Once a user creates a character in our adventure game, how often do they come back to play the game?
Now that we have our customers coming back and using our product, how do we get them to make purchases on our site? For a fashion site, this might be making a purchase from a basket; for a video game, it might be making a purchase for an in-app weapon upgrade; for a transportation company, it might be purchasing a ride.
Using the Revenue report with Mixpanel People properties, we can quickly find which customers are making purchases by demographics — age, gender, location, etc. — as well as determine the types of user behavior our purchasing customers exhibit — purchase price, purchase quantity, number of searches, etc. Utilizing these in parallel will allow for insights into who our customers are and why they are making purchases.
Once we have some sales data, we can start analyzing it in our revenue report, but we might also want to track revenue as an event and people property to get even more out of our revenue data. This dual tracking allows us to slice and dice our revenue by event and people properties, look out for trends, and send notifications based on past purchasing behavior.
What campaign sources drive the most revenue for our business?
What has our average revenue been this past June and July?
After fully working paying customers through the customer lifecycle (woo hoo!), we can now encourage them to tell their friends about us. Viral marketing is a cheap way to spread the word about our product, so it’s in our best interest to encourage our users to talk about us on social media. We can track what social media channels have the most shares — perhaps this might give us some insights about the users in our industry and where they would be more receptive to our advertising.
Moreover, once we know users are sharing our product, we can easily dig into the characteristics of the users who share us with their friends — this could help us identify potential future product advocates! Looking even further downstream than simply tracking shares, we can also measure virality of our product based on the share rate of our customers.
What social channel is the most popular medium that people use to share our product with their friends?
What demographic profile is most likely to share our product with friends? Let’s look into age.
Analytics don’t have to be over-complicated to drive business value — you just need to ensure you’re tracking the data that’s going to be most valuable to making data-driven decisions for your business.
Have questions about how to implement and analyze your own pirate metrics? Reach out to firstname.lastname@example.org to speak to someone smart, quickly.