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How many steps are involved in growth hacking?

Growth hacking: a vast subject


What is Growth Hacking?

Growth hacking isa method that combines marketing and sales levers. Today, it has become a catch-all term for all kinds of jobs. In this article, we’ll give you the keys to starting a Growth strategy based on your core expertise. To sum up, growth hacking must be a red line in your development that brings together several trades: sales, marketing, SEO, SEA, SEM… and so on.

Fortunately for you (and for us), it’s quite possible to start Growth without mastering all these skills. The key is to follow the AARRR model .

What is the AARRR model?

The growth hacking process can be analyzed by applying the AAARR model (Acquisition, Activation, Retention, Recommendation and Revenue). This model involves reinforcing each stage of the sales process before activating it. Take the image of a funnel: if it’s full of holes, no matter how many prospects you put in, few will make it to the Revenue and become customers.

Let’s analyze how the AARRR matrix works:

  • Acquisition (or awareness) – How do people find out about our product or company?
  • Activation – Are these people taking the actions we want them to take?
  • Retention – Do our activated users continue to engage with the product?
  • Recommendation – Do users like the product enough to tell others about it?
  • Revenue – Are our personas willing to pay for this product?)

Who created the AARRR model and why?

Dave McClure, a Silicon Valley investor and founder of 500 Startups, developed the AARRR model. McClure has found that many startups are easily distracted by superficial metrics, such as likes on social media.

With AARRR, McClure has a dual objective. Firstly, to show young companies how to focus solely on the indicators that can have a direct impact on their business. Then, help these companies use the right data to evaluate the success of their marketing and product management efforts, and improve initiatives that aren’t working.

Want to deploy an AARRR method in your acquisition system?

How does the AARRR model work?

Step 1 of the ARRRR method :

Identify your metrics or KPIs. As McClure shows in his Introduction to AARRR blog, your first step should be to define conversion and activation metrics for each of these five user behaviors.

Conversion metrics:

In AARRR, conversions refer to all the channels you use to tell people about your products. Here are some examples of the most popular conversion measures:

  • SEO: Search engine positioning
  • Social networking: which social network brings me the most traffic to my site? How do Linkedin users behave? etc
  • Marketing campaign: opening rate, response rate, click rate…
  • Apps and utilities: Number of downloads, number of people buying the premium part…
  • Advertising: Number of sales… etc

Activation measures:

Activation measures are generally represented by CTAs or “Call To Action”. The aim here is to drive traffic to your product by appealing to the imagination, so as to convert it into a prospect. The aim of activation measures is to encourage the prospect to perform an action, demonstrating his interest in your product and activating it. Here are a few examples of easily deployable activation measures:

  • “See additional pages”: you increase your prospect’s “scoring”: the more time he spends on your site, the more interested he becomes in and for you.
  • “Make an appointment”: at least that’s clear.. ahah
  • “Subscribe to your newsletter”: this allows you to build up a pool of customers who are not yet ready to make a purchase for various reasons, such as lack of budget, but who are interested in your service.
  • “Sign up for a free trial”: the famous Freemium model with which we are all familiar, both as professionals and as individuals. Who hasn’t been attracted by the famous “1euros per month for 12 months” then in very small print “The subscription increases to 40 euros / month after the first 12 months”.
  • The time your prospect spends on your landing or on a page of your site is a good indicator of their interest in your service.

Retention measures:

Once you’ve succeeded in activating your first users and turning them into customers, you need a retention or loyalty strategy. They need to be satisfied with your product (logically), but also not get tired of using it. To do this, they can

  • Return to your product several times over a given period, triggering additional features.
  • Access to tips or a blog reserved exclusively for customers
  • Receiving a little postcard for Christmas… It may make you smile, but don’t forget that business is also (if not mostly) done with people you like.

Recommendations :

These are users who recommend your company or products to their friends and colleagues. You can set up tools and campaigns to track recommendations, for example :

  • E-mails with integrated sponsorship ads
  • Sponsorship contest
  • Other marketing campaigns designed to make it easier to share products with others.

Income index :

Finally, you’ll need to define a realistic revenue target for your users. This will help you understand whether your acquisition costs, activations and other efforts are translating into profitable growth. For example, you’ll want to know how to define user-generated revenue:

  • Minimum income
  • Equilibrium income
  • Revenue versus customer acquisition costs.

Step 2 of of the ARRRR method :

Set up processes to track and analyze AARRR metrics. Once you’ve determined the types of data you want to collect for each of these stages of the AARRR framework, you’ll need to set up tools and methods for data collection and analysis.

Assuming your product, application or content is digital and online, you can use tools like Google Analytics to collect much of this information.

Step 3 of the ARRRR method :

Test all stages of user behavior to identify the best approaches. When gathering this data, McClure recommends running several A/B tests to find where you can improve user engagement at each stage of the AARRR framework.

At Stepward, we carry out these tests on all our prospecting campaigns, to be able to find the method that works best.

Step 4 of the ARRRR method :

Use these measures to improve your initiatives. Finally, as you learn what works and what doesn’t at each level of the AARRR framework, you and your team can begin to find ways to align your marketing and product management initiatives.

Here’s how the AARRR matrix translates into a rigorous and effective customer prospecting logic that will enable you to create a continuous flow of potential leads for your product. At Stepward, we understand each step of the matrix, and can help you implement it as effectively as possible.

Ready to get started?

The best way to understand growth and its power is to put it into practice. We’ll help you do it in just a few weeks.