Theoretical model that marketers must master: AARRR (Pirate Model or Growth Hacker Model)

Today let's learn a marketing theory model: AARRR model. Let's take a look~

Those engaged in marketing must establish a relevant theoretical knowledge system in order to better understand complex factors such as market environment, consumer behavior and competitive situation, formulate more effective marketing strategies and guide specific marketing practices to achieve better marketing results.

Marketing theory models use specific frameworks or graphics to express relevant theories. Their structured and visual features enable us to better understand and master the theories, and provide an efficient thinking path for understanding and analyzing complex problems, predicting market trends or consumer behaviors, etc. They also enable peers to use the same language and framework to describe and solve problems based on the model when communicating, thereby improving collaboration efficiency and reducing understanding biases. All of these help improve the efficiency of marketing work and help marketers achieve continuous growth.

Therefore, it is very important for marketing professionals to master marketing theory models.

Since its development, marketing has summarized and refined a large number of theoretical models, which have been continuously improved in marketing practice. Theoretical models such as STP, Porter's Five Forces, SWOT, 4Ps, AIDA, AISAS, AARRR, etc. have long been familiar to senior practitioners and used proficiently.

However, the specific meaning of these models and how to use them are still quite unfamiliar to new practitioners or friends who have ignored the theory in the past. Many friends have asked me questions in the background of the official account and on Zhihu.

Previously, I have introduced relevant theoretical models such as STP, brand life cycle, business model canvas, consumer journey, etc. in articles. I plan to continue to share some other commonly used marketing theoretical models in subsequent articles, and I also look forward to communicating with interested friends.

Today let us learn about the AARRR model (Pirate model and growth hacker model).

1. What is the AARRR model?

The essence of the AARRR model is a user life cycle model that focuses on five aspects: user acquisition (Acquisition), activation (Activation), retention (Retention), revenue (Revenue) and self-propagation (Refer). It describes the entire process from a user understanding a product or service to becoming a loyal user, corresponding to the five stages in the product life cycle.

The AARRR model was proposed by Dave McClure, a famous Silicon Valley venture capitalist in 2007. It is also known as the Pirate Model or Growth Hacker Theory Model.

The AARRR model is called the Pirate Model because it figuratively compares the development process of the user life cycle to the predatory growth of pirates.

The AARRR model is named the growth hacker model because it is an important tool for growth hackers (people in the Internet era who use data to drive marketing, use the market to guide products, and use technological means to implement growth goals) when increasing users.

Specifically, the AARRR model consists of five key stages:

1. Acquisition: Acquire users by recommending products that consumers are more interested in to them through big data analysis.
2. Improve activation: Improve user activity by optimizing content, broadening communication channels, and providing services with greater emotional value.
3. Improve retention: In the era of hobby e-commerce, retention rate refers to the proportion of consumers who continue to use and remain loyal to a brand or product after purchasing it. For e-commerce platforms, how to help brands improve retention rate is one of the important indicators to measure the attractiveness of the platform and user satisfaction.
4. Earn revenue: By keeping users interested and maintaining their interest, you can eventually achieve sales conversion.
5. Self-propagation (Refer): In the new marketing era, self-propagation represents more diversified sharing behaviors of users. It is also the UGC content generated by brand marketing and product recognition by users, recommendations in circle of friends, and willingness to turn brand behavior/products into capital for "showing off".

The AARRR model can be abstracted into a five-level funnel model, as shown below:

It should be noted that marketing also often uses the AIDA model (Attention, Interest, Desire, Action) and the AISAS model (Attention, Interest, Search, Action, Share). I think they and the AARRR model are models that describe user behavior and the purchasing process, but they are two sides of the same coin from different perspectives: the AIDA model and the AISAS model emphasize actions from the user's perspective, while the AARRR model emphasizes the use of appropriate means to mobilize user actions from the product's perspective.

There is no absolute right or wrong in marketing theory. In practical work, we can switch between different perspectives according to actual conditions and combine these models for flexibly application.

2. Why is the AARRR model so important for marketing work?

In the Internet era, a large number of software products and services have emerged. The AARRR model has been used by growth hackers and operations personnel to promote the growth of product users and commercial monetization, and has achieved quite good results. As a result, it has been noticed by marketers and applied to marketing practices in a wider range of fields.

With the continuous improvement of industrial production capacity and the rapid development of information technology, brand competition is becoming increasingly fierce, and the media communication environment is filled with infinite temptations and huge noise. In order to maintain a leading position and achieve sustained growth, brands need to firmly grasp customers, strengthen their loyalty, and pursue a balanced development between commercial realization, user loyalty, and brand building. The AARRR model provides us with a useful thinking framework and a clear executable path.

The AARRR model provides a comprehensive perspective that describes every key link in the user life cycle corresponding to brand growth. By deeply understanding user needs and market trends, brands can formulate targeted strategies for different stages to improve user retention, conversion rate and satisfaction, so as to achieve a balance between commercial realization and brand building while maintaining rapid user growth, and more fully tap the value of the user's entire life cycle.

Data analysis plays a vital role in modern marketing. The AARRR model emphasizes the core position of data in each growth stage. Through data analysis, companies can gain an in-depth understanding of user behavior, formulate marketing strategies, track and evaluate the effectiveness of marketing efforts, and make continuous adjustments and optimizations, which is conducive to improving the efficiency of marketing resource utilization and increasing the success rate of marketing activities.

In addition, the AARRR model mobilizes users from the perspective of product development, emphasizing the key role of user experience in brand growth. From the first contact with the user, the company needs to provide an impressive first impression and continue to provide a good user experience, which will then drive R&D, design, production and manufacturing departments to continuously upgrade product services and improve quality, and drive customer service, marketing, sales and other personnel to strengthen interactive communication and optimize service experience, so as to ensure user satisfaction and tap into its potential business value.

3. How to use the AARRR model to optimize marketing efforts?

The AARRR model provides us with a framework for thinking and an execution path, but how to use this model specifically depends on the actual situation. Generally speaking, we can start from the following aspects at different stages:

1. Acquisition – Attract as many potential users as possible to the brand.

However, this does not mean blindly carrying out high-volume dissemination and high-frequency, large-scale activities in various communication channels. Instead, it means accurately positioning potential users based on research and then concentrating resources on penetration.

First, brands need to conduct market research and user surveys to understand who their target users are, where they are, and what their needs and interests are;

Then, brands need to develop user acquisition strategies based on the information collected, including choosing appropriate channels and promotion methods, such as social media advertising, search engine optimization (SEO), content marketing, partnerships, etc., to attract potential users to the brand or product;

In addition, brands should regularly evaluate the effectiveness of their acquisition strategies and make adjustments and optimizations based on the data. Effectiveness evaluation can focus on indicators such as acquisition cost (CAC), user source, and conversion rate.

2. Activation – guide users to use the product and fully understand the brand.

To do this, brands need to lower the threshold for use, eliminate access barriers, and provide excellent user experience.

Brands need to attract customers' attention in an appropriate way and provide easy-to-use interfaces, excellent customer service, clear usage guides, interesting interactive experiences, etc. to meet user needs and expectations.

For example, a brand can collect users' mobile phone numbers during marketing activities or guide them to register for an app, follow a public account, or add staff WeChat. This can be achieved by providing free trial samples or coupons, and then guiding them to use the product in depth through text messages, public account messages, WeChat communications, or phone calls. In order to motivate them, coupons can be provided, a membership opportunity system can be used, or interactive activities can be planned.

3. Retention – Keep users using your product or service, maintain and increase their loyalty.

To this end, brands need to regularly update products, provide new features and services to meet user needs and expectations, maintain user interest and engagement, and establish a high-quality customer service system to respond to user questions and feedback in a timely manner, and improve user loyalty through professional and friendly customer service;

Secondly, brands can maintain long-term contact and interaction with users through emails, notifications, events, etc., and can also try to establish effective incentive systems, such as points, levels, coupons, etc., to encourage users to use products or services more frequently;

In addition, brands can also establish user communities to encourage interaction and communication among users and better understand user needs and feedback, strengthen their recognition of brand culture, participate in the development and upgrading of product services, and increase user stickiness and brand loyalty.

4. Revenue – Formulate and optimize pricing strategies, and provide convenient payment methods so that users are willing and able to pay for products and services.

In terms of pricing strategy, companies need to consider a variety of factors to ensure that prices match the value of their products or services and are competitive, such as value pricing (ensuring that prices match the value perceived by users), market comparison pricing (setting their own prices based on competitors' prices to provide more competitive pricing), and differential pricing (setting different prices based on different user groups, product versions, or service levels) to meet the needs and expectations of different users and increase their willingness to pay.

At the same time, enterprises need to choose the right payment model to attract and meet the needs of users. For example, frequently used services such as storage and online office suites can adopt a monthly or annual subscription model, which not only provides users with flexible payment options but also ensures the company's continued revenue; products such as software and games that users can use permanently with a one-time payment can adopt a buyout model, which increases the willingness to pay by providing permanent use rights; or a "free + value-added" model can be adopted, which is a model in which basic functions are free and advanced functions are charged, such as a differentiated service model with free ads and no ads charged, which ensures a large user base while encouraging users to pay for higher-quality services.

In addition, the brand must support multiple payment methods such as credit cards, Alipay, WeChat Pay, and provide clear payment process instructions to ensure that users can easily complete the payment; it can also carry out promotional activities such as discounts, buy one get one free, and bundled sales to attract users to pay and fully tap the potential commercial value of retained users.

5. Referral——Understand users recommending brands or products to others.

In order to motivate users to recommend brands or products to others, companies need to provide excellent user experience, make users satisfied with the products or services and generate a willingness to recommend, and establish effective recommendation mechanisms, such as recommendation rewards and sharing functions, to motivate users to actively participate in recommendation activities.

In addition, brands should be good at using social media and word-of-mouth marketing to further expand their brand awareness and influence, such as planning interactive activities with prizes to guide old users to participate and attract more potential users' attention and trust, and precipitate relevant communication content by establishing topic tags or brand areas to achieve longer-term sustainable brand influence.

IV. Conclusion

The AARRR model provides a comprehensive and systematic marketing framework designed to guide brands to better understand users and build long-term relationships with them. This model focuses on the entire user life cycle, attracting more potential users, improving user satisfaction and loyalty, increasing revenue, expanding influence, and ultimately achieving sustained growth and success through acquisition, activation, retention, revenue, and recommendation.

Therefore, understanding and applying the AARRR model is crucial for the long-term development of a brand. This requires brands to not only focus on a single sales or promotion activity, but also look at the relationship with users from a higher-level perspective and a longer time period, and use data analysis to drive accurate and efficient marketing activities to achieve corresponding marketing goals at different stages of the user life cycle.

Author: Chen Hao, WeChat public account: Brand Market Relativity