Avast ye landlubbers, scallywags, and salty dogs! (That really just means listen up y’all.) In growth marketing circles, it is common to use “pirate metrics.” However, you don’t actually need to be familiar with pirate terminology to improve your marketing strategy using this approach.
If you’re unfamiliar, it may seem odd to bring up buccaneers during a marketing conversation, but to elaborate, pirate metrics refers to the AAARRR process used in growth marketing. (Calling it pirate metrics stems from the common “arrr” phrase uttered by pirates in popular depictions.) It focuses on getting customers through the marketing funnel from awareness to referral. If you’re ready to learn more, here’s a closer look at the components of AAARRR.
Awareness marketing seeks to educate prospective customers about your brand and the solutions it can provide. Paid advertising campaigns, content that’s optimized for search, social media posts, and company news are common awareness tactics.
Marketers have long used digital advertising to test messaging and the resultant website traffic. Today, however, the digital landscape has changed, and establishing competitive differentiation is more challenging.
That means that marketers are becoming more targeted, often testing multiple messages at once with a potential audience. They’re also using approaches that aim to both build brand awareness and convert prospects to customers.
Social media is an important component of awareness. Brands still turn to traditional platforms – Facebook, Twitter, and Instagram. But they are also using platforms such as LinkedIn or TikTok as part of their growth strategy
Acquisition is the process used to acquire more leads and gain new customers. Are you showing up for the searches in Google that matter to your audience? Are they finding you when trying to solve their problems? Getting content in front of the right audiences takes strategic thinking and innovative action.
Brands using growth marketing have used chatbots, sign-up forms, and gated content as a means to secure more leads. But, of course, those are just a few examples. There are many ways to improve acquisition and show up for the searches that matter.
Brands do well by experimenting with their conversion optimization techniques. With forms, for example, brands should mix up the content, colors, messaging, and buttons to see what works best. Short-form content and video continues to grow in popularity as marketers begin to diversify away from webinars and white papers.
Activation is the process that gets people using a product or service quickly after it’s purchased. Marketers increasingly are asked to play a key role in driving activation, especially in B2B.
Marketers can use multiple tactics to drive brand activation. Some companies sponsor brand communities to foster connection and shared values amongst customers. A great example of a business who does this well is Harley-Davidson. Other businesses organize exclusive events scheduled around new product launches to improve activation. Apple is a great example of a company that excels here.
Data can play a major role in activation tactics. Usage data, combined with observational and feedback data, can provide insights on how to get customers to activate.
The costs of acquiring a new customer are much higher than keeping an existing one. In fact, it’s often cited that it costs five times as much to earn business from a new customer rather than an existing one. Retention is a way for brands to keep customers returning to buy their products or services.
Growth marketing techniques capitalize on and leverage the existing customer relationship. Consider customer-only sales or discounts, email alerts for new offerings, and special events. Retention approaches also can include encouraging customers to follow you on social media and sign up for newsletters or other content.
Data science can play an important role in retention, too. Customer data science provides you with insights into behaviors, patterns, and similar purchase patterns. Leveraging data lets you customize and personalize offerings for existing customers to drive growth.
The question marketers need to ask at this stage is, “How can we turn potential customers into paying customers?”
When considering revenue, marketers often look at two key metrics:
- Customer Acquisition Costs (CAC) – The total costs of gaining each new customer
- Customer Lifetime Value (LTV) – The total revenue a customer generates during their total lifetime relationship with your brand
Marketers want to lessen the CAC and maximize the LTV. One way to do so is to see how customers move through the pirate metrics funnel. The quicker you can get a potential customer from awareness to revenue, the better your business will fare. You’ll spend less on advertising and marketing and profit from more sales. Then, working on improving retention boosts LTV.
Word-of-mouth is still a reliable way to drive business referrals. If your products or services are of high quality, people will tell others.
However, in today’s digital age, there are other tools marketers can use to drive referrals. The first is to push referrals through incentives. A common example on social media are contests or drawings where winners are customers who tag a friend or share a post.
Encouraging users to leave reviews — and thanking them when they do — is another way to improve referrals from actual customers. Hearing about the best qualities of a business from other real people can help build trust for potential clients.
Similarly, using brand ambassadors, influencers, and affiliate marketing strategies are other ways to drive growth through referrals. People will always like to hear authentic stories and informative messages from other people. And once they do, the AAARRR funnel begins again.
Together these six components combine to create a strong growth marketing approach. Once used successfully, it won’t be long before you’re saying the jolly expression, Yo Ho Ho and celebrating a job well done. Remember it is a process, and it takes some time. But once you’ve mastered the pirate metrics approach, you’ll be relieved you took the time to learn more.