We live in a world where measurements and information are abundant, be they heartbeats per minute, number of application downloads, or social media followers. What’s crucial is to learn what information is relevant and how to use it.

The goal of this blog post is to take us through two Product Frameworks that will help us select the ideal metrics for the right product/company maturity. They break down metrics into categories, which will, in turn, help us define a metrics strategy and consequently start measuring a product’s performance.

This data is then used to experiment further, iterate and improve our products to deliver more value to users and the business.

AARRR Framework 🏴‍☠️

This user-lifecycle-centered metrics framework, created by Dave McClure, focuses on assisting teams in defining metrics that will help them get insights from the users’ journeys to increase revenue.

It’s more adequate for products and companies in their early stages, as it focuses more on the business side of things. During their early days, companies and products need to create a solid user base and generate revenue as soon as possible. This framework helps guide them in that sense, helping them be more effective and efficient.

Acquisition — How do users find the product?

These metrics will help you understand how your users are finding the product. They will help you know what Marketing strategies, such as SEM and Refer-a-friend campaigns, are paying off. Within these Marketing strategies (Social Media, Blog, SEM, SEO, Paid, etc.), you may find metrics related to:

• Devices being used (Desktop, Tablet, and Mobile)
• Sources of traffic (Direct, Social Media, etc.)
• Landing Pages (Conversion Rate, Bounce Rate, Page Views, etc.)

Activation — Are visitors becoming users?

These metrics will aid you in understanding conversion results. With these, you’ll be able to identify if you are successfully turning visitors into users. Typically, this happens when users have reached a level of engagement with the product that makes them feel it’s worth their investment — the “Aha” moment. This could be a user purchasing a license after a product trial. Examples of metrics that will help you with this are:

• Click-through Rate (CTR)
• Number of Signups
• Exit Pages
• Number of purchases from new users (e.g., eCommerce)
• Number of users with more than 10 posts (e.g., Social Media)
• Page Views per Session

Retention — Do users come back?

These metrics aim to bring insights into how well your product keeps existing users. Keeping existing customers is cheaper than acquiring or selling to new ones, so this should be a priority. In this realm, you’ll find metrics such as:

• Number of Returning Users vs. New Users
• Time to Churn
• Average Time on the App over X days
  
  

  Referral — Are users referring the product to others?

  These metrics give visibility to how/if users recommend your product to others. It’s widely believed that word-of-mouth is the most effective form of Marketing and, thus, an extremely important means to increase adoption. Examples of these metrics include:

  • Net Promoter Score (NPS)
  • Percentage of Customers Referring Friends
  • Social Media (Number of social mentions)

  
  Revenue — How can you increase revenue?

  These metrics’ purpose is to help learn how a product’s doing revenue-wise and consequently what can be done to increase that value. Examples of these metrics are:

  • Customer Lifetime Value (CLV)
  • Customer Acquisition Cost (CAC)