Whether it is about optimising your acquisition channels or your product, your approach must be simple, measurable and show results in the short-term.
You've probably heard about Dave McClure's famous AARRR framework, a 5-step method to successfully create leads or sales, while attracting new users on board, turning them to active customers, preventing from churn and making them so happy that they'll suggest your product to their friends.
If this doesn't sound too familiar, here's a great short video by Dave himself explaining this cycle. In short, these steps are:
Acquisition
Activation
Retention
Referral
Revenue
This video was shot back in 2007 and over the years, with the help of data utilisation and technology, these steps have intertwined and have become more fluent, rather than a step on their own.
Acquisition Stage
This is the stage where your brand needs to speak loudly to its audience about its marketing message. The purpose is to attract our very first customers and make sure they see the right message on the right channel.
This is done by creating communication messages for different channels, each channel being treated uniquely on its own. Questions to be asked at this stage might be:
-Do we have to (or can we) communicate on social media?
-Which social media channel is the right one for us? Facebook, Instagram etc.
-What should we expect to achieve from these channels?
-What sort of a Google search would a person do, to end up seeing our message?
-Could we attract them through our organic content?
-Should we go for PPC, and show ads to people who search for our service on Google?
In order to answer these questions (even primitively), we have to be taking into consideration all constraints in the business such as resources being team members, time allocated for each task, time allocated for each channel's growth, the budget for media activities etc.
Activation Stage
Once your users are already considering to purchase your product / service, it’s important to understand that user’s relationship with your product from beginning to end.
Example of step-by-step user behaviour:
User sees your brand’s message on Facebook for the first time
Clicks your content / ad, and visits your website for the first time
Scrolls through the page, doesn’t take any action and then leaves in 30 seconds
Then comes the next day via Google search, and completes the first purchase.
Some important questions to ask at this stage might be:
Why didn’t that user complete the purchase on the first visit?
How many pages did the user visit on the website until the moment of purchase?
How much time did the user spend on the website until the moment of purchase?
Why did the user prefer to come back the next day from Google?
At this stage, there are already many users searching for products on your website, asking questions, comparing prices with your competitors' websites, asking their friends if they had previously bought from you and if your products are reliable, should they trust the guarantee coverage, shipping process, and so on.
The task in hand is to make sure all users have easy access to information, and answers to questions they might have inside their minds, and you need to do anything in order to convince, make the process easier, more transparent, and better than your competitors.
Remember; as Nir Eyal mentioned in his book (Hooked), "Influencing behaviour reducing the effort required to perform an action is more effective than increasing someone's else's desire to do it. Make your product so simple that users already know how to use it, and you've got a winner."
Keep in mind this is a delicate process; you can win or lose many of your potential customers with little tricks here and there. That's why it's essential to be able to analyse each little step, using the data you have on your Google Analytics.
Revenue
There are many struggles of purchasing products or services online, whether it is trust to the company, quality of the website, how well the brand is represented online, how well the information of a product is presented or how the overall User Experience (UX) of the website is designed.
Each step from the first visit to the website up until the screen that shows the user the successful purchase of the product can be analysed separately and optimised to make sure the user does not suffer from any complications and have the best possible flow.
Sometimes companies make mistakes at a single step that can create huge damage to the overall revenue. As I mentioned before, each step on this workflow needs to function in its full potential.
Referral
According to studies on consumer behaviour on how people make buying decisions, a positive comment from a trusted friend is still one of the most important elements.
There are many ways of suggesting a user who just purchased a product / service, to recommend that to a close friend. This is done in the form of loyalty programs, gamification, instant win, and similar setups. The most important part is deciding the sort of data set and product framework to be used.
Retention
Similarly, the retention phase is where the product team needs to constantly work on how to attract that first time user to come back and purchase another item in a given time frame. This time frame can vary for the product / service being offered, as well as the need to purchase that product / service and the pricing.
For example; the steps required for shopping from an e-commerce website for a laptop, and shopping for clothes are different since that user may not need another laptop for another 5 years and the other might need a new piece of clothes the following month. In this case, it’s important to evaluate this process with an approach of product, pricing, consumer behaviour, consumer needs, competition and brand loyalty.
Sustaining an effective purchase cycle habit over customers is one of the hardest exercises for a brand, and it’s only possible through setting a set of realistic, achievable goals, and with endless iteration. There should never be a point where you can say 'okay this is it, we may stop here'.
Our purpose is to make sure you reach a high level of understanding of the product and market knowledge for each step, so that the execution process is smooth and efficient, with or without us.
Also, with all the efforts and resources spent within the process, it is highly important to calculate customer acquisition costs, customer retention costs, and customer lifetime value. These are industry-wide acclaimed metrics that are not only crucial to a startup's success but are also needed to make predictions for the future of any business.
This 5-step framework is highly beneficial for a startup business to adapt but at the same time very easy to adapt and implement inside a marketing agency, as long as their clients are also a good match to be part of this system.
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