Product Ownership

AARRR… How To Acquire New Users!

Along with building a great product, acquiring users is right up there in the product manager’s list of daily concerns. You’re building something great, and it’s normal that you want lots of people to use it! How can you go about acquiring users? What are the main steps? This part will take a look at the fundamentals of user acquisition.

The starting block: objectives and KPIs

Before launching any acquisition campaigns or brainstorming whacky viral marketing schemes, take the time to get back to your product vision. What are you trying to achieve? What measurable KPIs can you pair with your objectives? Along with the necessary financial objectives like revenue, return on investment and profit margins, try to set an objective behind each key point of the user journey you’ve defined.

A great way to do this is by using the AARRR framework, which encourages you to assign key indicators to each step of your users’ lifecycle:

Acquisition: The performance of the different channels you’re using to acquire users (inbound or outbound marketing, paid search, etc.).

Activation: Your capacity to make an acquired lead into a real user of your product. Usually a user is considered activate once he or she has used the main features of your product (for example, has posted a photo on Instagram). This is sometimes also called engagement or onboarding. Activation isn’t only about having a great product, it can also be actively encouraged by activation campaigns that can be delivered through your marketing channels. This is also a great way to get dormant users back to using your product.

Retention: How “sticky” your product is: how often are your users coming back? For how long do they remain active users?

Referral: A measure of what percentage of your users are actively encouraging friends, colleagues, and online strangers to try your product.

Revenue: How do you make money?

Visually, the framework looks something like this:

Build and optimise your funnel

As straightforward as the AARRR framework seems, there’s a lot of work to be done behind the scenes! Let’s take a look at how to optimise the first three steps: acquisition, activation and referral.

Step one: getting prospects in the door

Working with the marketing department or the product marketing manager, you need to build an acquisition strategy that will enable you entice users and draw them to your product. There are lots of ways of doing this, and it’s usually a good idea to mix several:

Your search ranking, which you can work on by improving your product’s SEO (Search Engine Optimisation). If you’re working on an app, you can work on ASO (App Store Optimisation) to make your app more visible in the Google & Apple stores.
Direct marketing campaigns sent to the inboxes of prospects for whom you possess (or have purchased) an email address.
Paid online advertising, such as SEA (Search Engine Advertising).
Public relations efforts, which involve having an influential personality write about your company or product.

Whatever you decide is best for your product, company and brand, users should begin arriving on your home page, a landing page or some other part of your product. This itself is a step that can be optimised fairly simply: find the marketing approach that generates the most quality leads per investment, as dictated by your ROI metric. Hopefully users will be arriving on a landing page (a page you build with the sole objective of converting prospects to users), or on the sign-up page of your app. Some of the users will bounce, which means they’ll leave your property without seeing a second page. You need to work on reducing this percentage to a minimum by:

Improving the performance of your landing page. To do this, you need to understand how your prospects are browsing the page, what they’re reading, what buttons are appealing to them, etc. This can be done by A/B testing or by plugging in an analytics tool. Once you understand what’s happening, optimise the pages for the behaviour you’re trying to encourage.

Improve the targeting of your marketing campaigns. If people are bouncing from your landing page, maybe you haven’t attracted the right people? If you’re using a tool like Facebook ads, there are many criteria you can use to hone in on your target prospect.

Making sure your landing page experience is mobile-friendly. This means having a media aware page that is able to adapt itself to fit the device the visitor is using. If you’re putting up an application download link, make sure it is different for users who’re using an Android or iOS device! Small changes like this can make a big difference into fluidifying the onboarding experience and minimising your bounce rate. Don’t forget to make sure the links used in your marketing material are multi-device friendly too.

Optimising your landing pages and tuning your communication for different types of visitors:
A first version of the page should exist for people who’re getting to know your product for the first time.
Another version can exist for those who’re not logged in but returning for a second time (you can identify them using cookies).
A last version for users who already have an account but are back on the landing page, perhaps after a long break from your product.

Step Two: converting prospects into users

If you’re running a SaaS product, the objective of your landing page is most likely to encourage sign-ups to your product. Unfortunately, not all your acquired prospects will make it through this part of the funnel either. Here’s what you can do to make sure you don’t lose too many of them at this key point in the funnel:

Try to understand which segment of your prospects are making it through to the sign-up phase. Maybe there’s a distinctive trait you can pick up on, which in turn can be used to further optimise your targeting. If your targeting is spot on, you should already be getting decent conversion results, as the prospects you’re attracting should be dieing to discover your product and have their needs met!

Analyse at which point exactly users are abandoning the signup process. As a product owner trying to acquire new users, it’s normal to want to ask them for lots of information: however keep in mind that each extra form or question will put some users off. The longer the signup process, the more users will be lost.

Make life easy for your prospects! Implement the login systems that seems the most appropriate for your target audience. Also, keep in mind many people have strong preferences when it comes to signup mechanisms: not everyone wants to use Facebook Connect, for example. Try to offer a few choices and let your users choose what suits them best.

Step three: From signup to regular user

This is the hardest part of the process which is highly dependant on the quality of your product, as well as its fit with the audience you’ve targeted. It’s time to build and promote the first experience a user will have on your product. To get started, try to answer the following:

What feature, or combination of features can be presented as a coherent journey which will enable your user to understand what your product is for, and what problems it aims to solve?
How can you be sure the solution to your user’s problem is presented clearly, as part of a seamless experience?

Once you’ve thought about these key questions, we recommend trying the following:

Storyboard this first product experience you’re trying to design: where will the user be coming from, what will he or she know about your product, what will be the most appealing, how can you lead the user from one part of the experience to the next?
Come up with several options: your users are all different and will not necessarily gravitate to the same feature, page or journey when they first try your product.
Show your user how much of your product he or she has used or discovered (for example, LinkedIn shows you a percentage-based indicator when you’re filling in your profile).
Try to gamify the process by progressively unlocking new features, awarding small prizes within your product or making your user feel satisfied by bestowing a special status or title to him or her.

This is all a lot of work, and should be the fruit of a prolonged collaboration with your design team. You should be constantly seeking to improve your acquisition funnel, as well as working to remove any friction that might exist within your process. Don’t hesitate to gather first-hand data about the onboarding experience itself, by reading app store reviews, talking to the support team who deals with users first-hand, and even talking to some of your users directly if possible.

What about making my product viral?

Once you’ve sorted out a first approach to acquisition, activation and retention that works, you need to start working on the virality of your product, or, in less exciting terms, your referral rate. By definition, a viral product is one that has a large amount of its acquisition driven by customer-to-customer referrals. There are two measures you can take to understand your product’s virality:

The K-Factor

This KPI is an indicator of how many referrals you are generating on a per-user basis. Simply put, your K-Factor is the average amount of users that each user brings to your product. To calculate this, you need to multiply three different variables:

The percentage of your users who invite other people to the product.
The amount of users they invite on average.
The success rate, or, in other words, how many of their invitations lead to a new user acquisition.

Everyone dreams of having a product with a K factor that is over 1, as this means your organic referral growth rate will be exponential! Obviously, you need to work on improving your K-Factor by improving your acquisition funnel and the product itself.

Net Promoter Score (or NPS)

NPS can be used to measure virality indirectly. It is a straightforward way of measuring your users’ satisfaction with regards to your product. NPS is measured through a single question: how likely would you be to recommend this product, from 0 to 10?

Your NPS will help you break down your user base into three categories:

From 0 to 6: These users are not very satisfied, and could even bring harm to your product’s reputation.
From 7 to 8: This group is happy with the product, but they’re not over the moon with it, and could just as easily swap to your competitor’s offering.
From 9 to 10: These are the users who love your product and are ready to recommend it to friends, family and colleagues.

Once you’ve measured this for a sufficient amount of users, you can calculate the gap between the amount of satisfied users compared to the amount of unsatisfied users. If your score is negative (more unsatisfied users than satisfied users) your user satisfaction score needs work. If it is positive, you’re doing alright!

If you want to increase your referral rate, you need to build social features that will help your happiest users to spread the word about your product. However, be careful with this: you don’t want to create a spammy feature that may well end up having a negative effect on your product’s virality.

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