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Want Growth? Simplify! The AARRR model for e-commerce
In just three hours, the great Pablo Picasso drew a bull, perfecting every line, from the relief of the muscles to the texture of the hair. Then for a month he simplified the drawing, trying to depict the animal with a minimum number of lines, keeping a recognisable image. In this way, the artist wanted to show that behind all the complexity of the external world there is always a simple essence.
For more than a decade, Apple used Picasso's ‘Bull’ to explain its philosophy: ‘Only simplicity is scaled. It takes a lot of hard work to make something simple, to really understand the core problems and come up with elegant solutions.’
The same principle applies in business: you want growth, simplify. The clearer the idea (system, product), the easier it is to implement. But how to understand that the chosen business model is really effective and scalable online? This is where the AARRR framework helps - a tool that turns the chaos of user data into a clear growth system.
For more than a decade, Apple used Picasso's ‘Bull’ to explain its philosophy: ‘Only simplicity is scaled. It takes a lot of hard work to make something simple, to really understand the core problems and come up with elegant solutions.’
The same principle applies in business: you want growth, simplify. The clearer the idea (system, product), the easier it is to implement. But how to understand that the chosen business model is really effective and scalable online? This is where the AARRR framework helps - a tool that turns the chaos of user data into a clear growth system.
How does AARRR help you scale?
AARRR is a marketing model that e-commerce businesses use to measure, analyse and ‘digitise’ user behaviour at different stages of the user journey.
AARRRs are KPIs known as ‘pirate metrics’:
An online shop runs advertising, but the money is wasted: there are no orders. What is the reason? AARRR-metrics show that customers leave the site very quickly and it's not about prices - complicated navigation, unclear delivery conditions. This is the Activation level.
Another situation: there are sales, but customers do not return. AARRR analysis reveals low retention. The company urgently introduces a discount system for repeat orders and launches an email newsletter. As a result, LTV (customer lifetime value) rises. What happens at other levels? And what programmes can be used at each stage to monitor KPIs?
AARRRs are KPIs known as ‘pirate metrics’:
- Acquisition - How people learn about your product or company as a web user comes to your site.
- Activation - whether these people are taking the actions we want them to take. This is the first experience, everything to do with how people visit your site.
- Retention - how long an ‘activated’ user stays on your site and when they return.
- Revenue - how the company makes money and everything to do with monetising the site.
- Referral - why users bring new customers.
An online shop runs advertising, but the money is wasted: there are no orders. What is the reason? AARRR-metrics show that customers leave the site very quickly and it's not about prices - complicated navigation, unclear delivery conditions. This is the Activation level.
Another situation: there are sales, but customers do not return. AARRR analysis reveals low retention. The company urgently introduces a discount system for repeat orders and launches an email newsletter. As a result, LTV (customer lifetime value) rises. What happens at other levels? And what programmes can be used at each stage to monitor KPIs?
Acquisition
It's important not just to attract traffic, but to bring in a relevant audience with a high probability of conversion.
To improve Acquisition, you need to:
How to measure effectiveness in the Acquisition phase and where to find the data?
KPIs: traffic, customer acquisition cost (CAC), CTR, conversion rates.
To improve Acquisition, you need to:
- Analyse traffic sources and their effectiveness
- Optimise campaigns and landing pages
- Improve content, increasing its value for users
- Main channels of attraction: SEO, contextual advertising, content marketing, social media and referral programmes.
How to measure effectiveness in the Acquisition phase and where to find the data?
KPIs: traffic, customer acquisition cost (CAC), CTR, conversion rates.
- Google Analytics (GA4): metrics (Users, Sessions, CAC), reports (Traffic Acquisition, Acquisition Overview).
- CRM: sources of leads, value of applications, customer journey.
- Hotjar: heat maps, session records
- TON OP company: analyses of advertising clicks
Activation
Attracting a user is only half the battle. It is important that they take the first targeted step: registering, leaving contact details, adding a product to the basket. This step determines how quickly the customer will see the value of your product.
Factors influencing attraction:
How to measure effectiveness in the Activation phase:
KPIs: user journey analysis, time to conversion, percentage of visitors ordering after the first visit
Factors influencing attraction:
- Simple and easy navigation
- Minimal steps from selection to checkout
- Clear and easy to understand offer
How to measure effectiveness in the Activation phase:
KPIs: user journey analysis, time to conversion, percentage of visitors ordering after the first visit
- Google Analytics (GA4): metrics (Engaged Sessions, Time to Conversion), reports (User Explorer, Funnel Exploration).
- CRM: lead statuses
- Hotjar: Video recordings of user sessions
- TON OP: Behavioural analysis at the order placement stage, segmentation by transaction stages
Retaining ‘old’ customers is cheaper than attracting new ones. Loyalty programmes, personalised offers, quality service all help to increase Retention.
How to improve retention:
How to improve retention:
- Use email newsletters and push notifications
- Introduce loyalty programmes and bonus systems
- Gather feedback and improve customer experience.
The goal of the business is to make money. At this stage, the sources of profit are analysed: the average check, and the frequency of purchases. The more effective the monetisation, the higher the profit.
How to increase revenue:
How to measure effectiveness at the Revenue stage:
KPIs: Customer Lifetime Value (CLV), ARPU (average revenue per user), conversion rates
How to increase revenue:
- Optimise pricing
- Increase the average check, implement up-sell and cross-sell strategies.
- Analyse customer behaviour to personalise offers
How to measure effectiveness at the Revenue stage:
KPIs: Customer Lifetime Value (CLV), ARPU (average revenue per user), conversion rates
- Google Analytics (GA4): metrics (Revenue, CLV), reports (Monetisation Overview, Ecommerce Purchases)
- CRM: average cheque, repeat purchases, order history
- TONOP: analysis of user behaviour before payment, abandonment points
How to measure effectiveness at the Retention stage:
Retention KPIs: retention rate (how many users return), churn rate (how many leave).
Retention KPIs: retention rate (how many users return), churn rate (how many leave).
- Google Analytics (GA4): metrics (Retention Rate, Active Users), reports (Retention Overview, Cohort Analysis).
- CRM: Date of last customer login, repeat purchases
- Hotjar: scrolling maps
- TON OP Bulgaria: behaviour analysis of returning users
Retention
Revenue
Referral
The best customer is the one that brings in new customers. Referral programmes, testimonials and UGC content (user-generated content) help attract quality traffic with high conversion rates.
How to increase your recommendation rate:
How to measure effectiveness at the Referral stage:
AARRR simplifies business insights by turning disparate data into a coherent system. Instead of trying to cover everything at once, AARRR makes you focus on the key points that affect growth.
Going back to Picasso: removing the unnecessary and leaving only the essentials is not simplification for simplification's sake, but a search for the essence. In business, AARRR helps you do the same: cut through the noise, see what really works, and scale through precise, meaningful solutions.
TON OP doo ltd develop innovative programmes to advance the business of customers and platform partners: from strategic planning to actual implementation. TON OP software is an affordable tool that can be used to analyse market trends, sift out the unnecessary and aggregate the necessary data.
How to increase your recommendation rate:
- Start a referral bonus programme
- Reward customers for leaving reviews
How to measure effectiveness at the Referral stage:
- KPIs: customer loyalty index (NPS), referral volume, social media.
- Google Analytics (GA4): metrics (Referral Traffic, Social Engagement), reports: (Referral, Social Network Analysis).
- CRM: Tracking referral programmes, promo code data.
- TONOP company: User surveys on service recommendation, social network interaction points.
AARRR simplifies business insights by turning disparate data into a coherent system. Instead of trying to cover everything at once, AARRR makes you focus on the key points that affect growth.
Going back to Picasso: removing the unnecessary and leaving only the essentials is not simplification for simplification's sake, but a search for the essence. In business, AARRR helps you do the same: cut through the noise, see what really works, and scale through precise, meaningful solutions.
TON OP doo ltd develop innovative programmes to advance the business of customers and platform partners: from strategic planning to actual implementation. TON OP software is an affordable tool that can be used to analyse market trends, sift out the unnecessary and aggregate the necessary data.
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TON OP DOO LTD
Address: 8 BORBA STR., PLOVDIV, BULGARIA, 4021
Mail: info@tonop.bg
Address: 8 BORBA STR., PLOVDIV, BULGARIA, 4021
Mail: info@tonop.bg