AARRR Metrics with an example

AARRR is a framework, which can be useful in determining the most appropriate metrics at different stages of a user’s journey through the product.

Acquisition Stage - The acquisition stage deals with acquiring new users. At this stage, you are trying to answer questions such as how many new users are you adding, which channels are giving you the newest users, what is the cost of acquiring a new user, etc. Identifying the relevant metrics for Zoom based on the AARRR Framework

Key Acquisition Metrics

• Total Users

• Customer Acquisition Cost (CAC)

• Cost per Click (CPC)

• Bounce Rate

• Cost per App Install

Activation Stage - Activation is the stage of the user journey when a user has had the Aha moment, that is they do a core action or actions which demonstrate they have achieved success or get value from the product. Different companies would define activation events differently. Activation events for some companies are listed in the table below.

Retention Stage - Retention answers the key question of how many of your users are continuing to use the product i.e., being retained over time. Retention and engagement go hand in hand determining the health of the business. Many businesses when thinking of growth they think of only acquisition, but that is a big mistake. If you are acquiring new users but not retaining them or your users are not engaged, you are doomed to fail. This is why retention and engagement are so core to any growth strategies.

Key Retention Metrics

• Daily/Weekly/ Monthly Active Users (DAU/MAU/WAU);

• Churn Rate

Revenue Stage - In the revenue stage, we look at the key monetisation metrics for the users. This is the stage where you should figure out how can you convert your potential customers into paying customers which contribute to your revenue.

Key Revenue Metrics

• Average Revenue per User (ARPU)

• Gross Merchandise Value (GMV)

• Gross Margin/ Gross Profit

• Lifetime Value (LTV)

• Conversion Rate (Free to paid users)

• Monthly Recurring Revenue (MRR)

Identifying the relevant metrics for Zoom based on the AARRR Framework

Referral Stage - Referral is the stage where you are asking how can you turn your current users into promoters such that they help in getting new users. One of the best ways to drive growth is through referrals.

Key Referral Metrics

• Net Promoter Score (NPS)

• Viral Coefficient (K)

• Referral Invites Sent

• Revenue from Referral Signups

Acquisition Metrics

1. CAC = Customer Acquisition Cost - When it comes to customer acquisition, your Cost Per Acquisition is one of the key metrics you need to monitor. This is important to know how

much you are paying for marketing, campaigns and other sorts when you are trying to acquire customers for your business.

2. Click Through Rate - This metric is expressed in percentages and measures the number of times your ad, email, or organic search result has been clicked compared to the number of times it was viewed.

3. Traffic Source - Your website's traffic also plays a crucial role in how you are acquiring customers. By understanding where your traffic is coming from, you will get to know how well your strategy is working.If you find that your traffic is increasing yet you still have a low traffic-to- lead ratio, it could mean that you are missing something on the page. One factor could be a misalignment in the information provided on what your customers are clicking on. If you fail to answer their question on that page, your customers may leave your website to look for another resource. Before you start optimizing your content, you need to identify the pages on your site that are getting the highest bounce rate as well as the lowest view-to-contact rate. By having this knowledge, you'll know which pages you should be putting your efforts into.

Activation Metrics 1. Activation Rate - The percentage of people who convert from free users to paying users in a specific time frame.

2. Number of users scheduled their first meeting in post sign up: This will help us to understand that users are using one of the core feature of zoom i.e., scheduling a meeting for others after sign up.

3. % of users who have joined their first meeting on Zoom post sign up: This is an important metric for activation which will show how many users have used the core feature of zoom after signing up.

Retention Metrics

1. Churn Rate - The percentage of users who stop using your freemium product, or who don't convert to premium version after certain time period.

2. Daily/Weekly/Monthly Active Users – It gives us an idea of how many users are being inactive or not using the product or not attending any meetings via Zoom.

3. Average Minutes per meeting: This will help zoom to understand engagement and find for how long does the users spend time in a meeting.

Revenue Metrics 1. Average Revenue per user (ARPU): It is the average revenue earned per user. It can be calculated by dividing total revenue earned by total active users in a month. This will help Zoom to analyze the company’s revenue generation capability and growth at the per-unit level.

2. Monthly Recurring Revenue (MRR): It is the amount of average revenue earned per user

multiplied by the total number of users in a particular month. This will help Zoom in budgeting and allocating money. This can also be an indicator of whether the business is doing well or not over a period of time. This metric can be calculated monthly.

3. Customer Life Time Value (CLTV): It is the amount of money that a customer will spend on zoom during their lifetime. This will help zoom to do cohort analysis and manage financials.

Referral Metrics

1. NPS = Net Promoter Score: It is used to measure the loyalty of a company’s customers. NPS gives quick and reliable feedback from customers. For this, users will be giving a rating between 0 and 10 and the users will be divided into three groups: detractors, passives, and promoters. NPS is the % of promoters — % of detractors. The higher the NPS score, the more the users are loyal and will recommend Zoom to other people.

2. Viral coefficient: It is the number of new users generated by existing users. This will help zoom to understand the growth of the company and how satisfied are the users. It is also a metric of a good product.

3. Revenue from Referral Signups: It measures the total number of users who opted for the premium version of the product from those who signed up by referral program.

Wireframes for the Web-based Analytics Dashboard - https://www.figma.com/file/OJCv4bYhtDsxvP8ShnWJS6/Untitled?node- id=0%3A1