The Pirate Funnel is a framework designed to help businesses identify in which stage, or stages of the funnel the company is losing its customers. The framework cuts the business in pieces which allows companies to pinpoint bottlenecks and identify opportunities for growth hacking. The term was first coined by David McClure in 2007 and the letters – AAARRR – spell out for awareness, acquisition, activation, revenue, retention and referral. As shown in the image below, the AAARRR framework illustrates that marketeers traditionally focus on the top of the funnel. Growth hackers, on the other hand, take a broader approach as they focus on all stages of the Pirate Funnel. Today, the Pirate Funnel is a well-known framework within growth hacking and widely used by businesses and growth hackers. Now that you know the definition of the Pirate Funnel, let’s take a closer look at each component of the framework.
The six stages of the AAARRR Pirate Funnel
The awareness stage gives insight into the reach of marketing campaigns. This stage was added later to the Pirate Funnel as it was initially referred to as the AARRR framework.
In this stage of the funnel, marketeers and growth hackers aim to understand how many people visit your website and where they came from. Users can come from search engine advertising, social media, influencers, marketing campaigns, blogs, or affiliate marketing, to name a few.
Activation is all about understanding what your visitors are doing on your website. This stage tells you how long a visitor is browsing the website, how many pages they visit and how they engage with the content. For instance, are they signing up for the newsletter, or requesting a brochure?
Once you have acquired a new customer, you want them to make repeat purchases. This stage of the Pirate Funnel, thus, shows whether a business is successful in converting first-time customers into loyal customers.
Using sales metrics, this stage of the AAARRR funnel gives insights into how many visitors turn into actual customers, and the revenue these customers are generating. Two important metrics to assess revenue are the customer acquisition costs and the customer lifetime value.
Finally, worth-of-mouth is one of the most powerful methods of marketing since research shows that 88% of the people showed the highest level of trust in a brand when friends or family recommend it. Social media posts, backlinks or blogs are useful indicators of the performance of businesses in this stage.
Are you seeking growth for your business and are you unsure how to get started with growth hacking? The AAARRR Pirate Funnel is a good starting point to kickstart your growth hacking process!