There are numerous ways to measure the impact of your marketing efforts, and it’s easy to be tempted to monitor them whit a lot of tools and metrics. The Pirate metrics is a tool to avoid tracking too much things at a time and keeping things simple.
Pirate metrics allow you to visualize your metrics in a simple funnel for a specific aspect of your product or service and allows to find where you have to put your efforts.
The Pirate Funnel is composed of 6 groups of metrics: Awareness, Acquisition, Activation, Revenue, Retention, Referral. The name Pirate metrics comes from the acronym: AAARRR !
The whole user journey with your product is covered, from the first day he heard of you to the day he refers friends. This model was originally applied to SaaS by Dave McClure but it can also be applied to other businesses. His presentation is available on SlideShare.
I’ll now describe the different groups and the kind of metrics to take into account for each of them. I’ll also give an example based on my project: Seety. All metrics have to be observed for a specific time-frame: daily, weekly, monthly. I prefer to measure the metrics on a weekly or monthly basis but it depends on your business, its maturity and the marketing actions you are taking to boost your metrics.
The first group is Awareness. It measures the amount of people reached and that know your product or company. For this group, the metrics can include:
- Website visits: The amount of visits on your website or landing page.
- Impressions: The reach of your ads, your social media posts,…
- Offline: People that went in front of your shop
For Seety, a mobile application, we can measure the Social media impressions per week for example.
The Acquisition group measures the conversion from a simple visitor to a lead. You want to measure the actions performed by your visitors, that are now becoming leads. Some metrics can be:
- Newsletter registration
- Reactions on your social posts
- App downloads: A user that downloads an app is acquired, but you can also focus on app opening.
For Seety, I would use App downloads per week.
When a lead becomes a user, it’s said to be Activated. Here are some examples:
- Account creation: When a user creates an account, you can contact him later
- A product added to the shopping cart. For a e-commerce, it’s a strong Activation.
- A customer enters your offline shop: It’s your job to make him buy something
For Seety I would use the users that input their credit cards per week.
When your users are activated, they are ready to create value for you. The order of the next steps depends on your business and the value you want to get from your users.
This group is straightforward. It measures the revenues you get for the measured time period. You can measure it per transaction, or per amount:
- The amount of payments for the period: This is only important if your pricing is fixed
- The revenue for the period: Either the average per user, or the total
For Seety, as we take a free commission on parking payments, the amount of transactions is our metric.
When you have a paying user, you want him to stay active and to consume more of your service. For this group, you can measure the following metrics:
- Retention rate: How long will a user use your service on average ?
- Customer lifetime value: The average amount a user will spend on your product
- Product usage: At what frequency do the user comes back ?
For this metric to be easy to relate with the other stages, I fix a time period I want the user to stay (let’s say 5 weeks), and I count the mount of users that use the service for more than 5 weeks.
For Seety, it can be the amount of users that did a parking session more than 3 weeks in a row.
A happy user is your best ambassador. You want to be sure that each user can bring new users. That’s the referral metric. It can be measured by different means:
- Referral links sent: If your users can send a referral link to friends, count the clicks
- Shares of your products on social media. For some businesses it’s super important
- Good reviews on the app stores. A Good review on the store is a super boost for an app!
For Seety, we have a referral system with a dedicated link. We can thus count the amount of clicks on those links per week.
Google Sheet canvas
Now that you understand the different groups in theory, it’s your turn to apply it to your product or service. I compiled the Pirate metrics in a Canvas I use for my projects. It’s super easy to use in a Process and to be sure that you always focus on the right group of metrics before going to the next one. For example, at CovEvent, we review this Sheet every week for the team meeting.
Access My Google Sheet here for Free: Pirate Metrics Canvas.
How to use the canvas
- First, define one metric per group (in the second line). This will be the group’s key metric. It’s important to only focus on one metric per group.
- Paste the link to the measurement of that metric in the third link. It’ll be easier to find the metric back for each period. Link to your Google Analytics, Amplitude, CRM,… dashboards there. One link per metric as it has to be as simple as possible to retrieve the metric.
- Each period (monthly, weekly,…), you define the group you want to optimize (The one you want to grow the metric): That’s your focus metric. Highlight it to keep a track. Then, fill the metrics for each group for that period.
- Decide how you’ll act on that Focus metric and which actions you’ll take to grow it. That’s a discussion you must have with your team. That’s the point where the Pirate metrics is useful.
For each period you fill, the spreadsheet computes the evolution of your metrics between groups (the conversion in the funnel, from left to right), and the evolution of each group compared to the previous period (from top to bottom). Those computations allow you to understand if your marketing efforts or product changes are good or not for your focus metric. It’s also useful to take action and to measure those actions.
Pirate metrics pitfalls
The main pitfall of the Pirate metrics is to optimize everything whereas you have to focus on a specific metric (a specific stage) at a time. Generally, you optimize the stages from Awareness to Referral.
It’s also tempting to use multiple metrics per group. Doing so, will certainly loose you as you’ll track too many metrics at a time.
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