For some of our clients, apps/websites are a core part of their business, and they will invest heavily in a few apps/sites in the next 5 years. As app development is not a one-time effort, a signpost is needed for long term development. We find user metrics are a very useful longterm signpost.
The AARRR framework was created by Dave McClure and is widely adopted by Silicon Valley startups. His framework views how users interact with a site/app as a series of stages:
- Acquisition: Users come to your app/site from various channels.
- Activation: Users enjoy the first happy experience.
- Retention: Users come back to your app/site.
- Referral: Users like your app/site so much that they refer others.
- Revenue: Users conduct some monetization behavior.
For example, for a user to refer your app/site [referral], usually they need to have a happy experience first [activation]. And by measuring the percentages of users that have reached a specific stage, you can identify app bottlenecks. For example, if the retention rate is low, meaning people are not coming back to the app, then perhaps you should put more effort into improving retention instead of referral or revenue.
To learn more, see the presentation from Dave McClure.