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Master your pirate metrics, AARRR

by Nicolas Vérité

This is an excerpt from Boost your engine of growth with chat and social value by Nicolas Vérité.

Instant messaging or chat is a constantly self-reinventing universe. In this article we focus on businesses who are building chat apps and apps with chat. From early stage startups to big corporates, it is always good to remind and always be conscious of some the basics of business, and how the interlinking and mechanics of social and messaging allows you to accelerate growth and consolidate your sustainability.

Master your pirate metrics, AARRR

Pirate metrics are business KPIs for product or service marketing, sales and more generally product management. It is a big funnel of quantitative data telling the story of your customers’ journey. This data describes different stages of your relationship with the client: Acquisition, Activation, Retention, Revenue, Referral. Together these pirate metrics add up to a famous pirate battle cry - “AARRR”.

What are the metrics behind AARRR?

  • Acquisition: people who come to your product or service
  • Activation: people who actually do something with your product or service
  • Retention: people who continue to use your product or service regularly
  • Revenue: people who pay
  • Referral: people who talk (positively, hopefully) about your product or service!

More precisely, it is a set of critical engine parts of your growth machine. Each single value of these five metrics is important for your measure, so that you better understand your customer journey, and can optimise it.

The ratio of conversions for each step is also very important. But don’t lose sight of the bigger picture; it helps you identify what you are good at, and where to improve.

Going deeper, next we will focus on the organic aspects of Instant Messaging: Acquisition, Retention, Referral. We will not cover Activation, because it mostly belongs to your onboarding, neither will we cover Revenue because it mostly belongs to your business model. However, it is clear that Activation and Revenue are not fully disconnected from Acquisition, Retention, and Referral.

Here is how to boost the triplet “Acquisition, Retention, Referral”.

Features for Acquisition and traction

There are a number of generic chat features available that appeal to your potential users and thus contribute to Acquisition. One-to-one chat or interpersonal messaging obviously comes to mind first. Then group chat is definitely contributing a lot to your traction, as it is more fun and collaboration for users, the generation Slack/HipChat and their dozens of followers showed that massive enthusiasm and need. And finally, social networking is taking all of that to the super next level.

Then you can consider secondary features, such as presence, status, availability, profiles, avatars, and contact management, including blocking. There are even more features, such as typing notifications, last message correction, sent/received/read receipts, pictures/sounds/video/location messaging, archiving, mentions, stickers/emojis, integrations, chatbots, full-text search, the stories craze, and of course end-to-end encryption.

Let’s not look too deep into all the features on offer for now, you should focus on creating your own subset, based on your customer demand, and the problems you are trying to solve. Your unique custom features will be your differentiators.

Warning: carefully craft and tailor key distinctive features for your audience. Do not use ALL the commodity features. The goal is to avoid feature factories, making your app look like blinking Christmas decorations. “It seems that perfection is attained not when there is nothing more to add, but when there is nothing more to remove.” (Terre des hommes, Antoine de Saint-Exupéry, 1939)

Activities for Retention and engagement

Here you will use mechanics that will not add friction, nor will you focus on the features that “just add value” for individuals. You will focus on conversation (re)activators, such as chatbots, integrations, group chat and social chat (natural user feature, not marketing features to synthetically force the use of the app).

These “wake up” conversations are to be considered in the perspective of the user. These simple tricks allow you to re-capture a significant ratio of dormant users, and greatly improve user engagement with your app.

Warning: be careful of notification fatigue, and information overload. Of course you cannot control your audience’s activity. So be wise in buffering, aggregation, and re-activation. “A wealth of information creates a poverty of attention.” (Designing Organizations for an Information-Rich World, Herbert Alexander Simon, 1971)

FOMO for Referral and going viral

A highly interconnected community will naturally, organically pull the missing people in, and bring more nodes and interconnections into the network. This relies on a very simple psychology trick: FOMO (or the Fear Of Missing Out). If a group or community is almost fully present on your app, having fun with all the content and interactions, then the elements that are still outside this circle will be magnetically attracted.

Warning: do not expect virality to spontaneously generate. The ecosystem will grow starting with much seeding effort. This is why you need to focus on two major tasks: capture a niche first in order to jump into another one, and ignite a viral wildfire on social media using best practices, i.e. prioritising micro-influencers. “A referral is the key to the door of resistance.” (Bo Bennett)

Each one of the organic triplet “Acquisition+Retention+Referral” feeds each other:

  • Acquisition+Retention: an app user seeing new friends joining in will engage and explore even more with the network
  • Acquisition+Referral: virality reduces your cost of acquisition
  • Retention+Referral: missing elements of an active and consistent group or community will be invited to join in

Interested in learning more about the power of social messaging and how to successfuly expand your app engagement? Read the full article: Boost your engine of growth with chat and social value by Nicolas Vérité and get practical advices on how to combine the forces of chat and social to increase the network value of your product.

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