What framework helps a business find where customers might be lost in their journey, from finding to using a product?

The AARRR framework, also known as Pirate Metrics, helps a business find where customers might be lost in their journey from finding to using a product. This framework categorizes the customer lifecycle into five key stages, each represented by a letter: Acquisition, Activation, Retention, Referral, and Revenue. By tracking metrics for each stage, businesses can identify specific points where customers drop off or fail to progress, indicating where they are being lost.

Acquisition refers to how customers discover a product or service. At this stage, customers might be lost if they do not find the product through marketing channels, visit the website, or download an application. Businesses track metrics like website traffic or app downloads to understand initial reach.

Activation is the stage where customers have their first positive experience with the product. This typically involves completing a key action, such as signing up, completing an onboarding process, or using a core feature for the first time. Customers are lost at this stage if they register but do not complete setup, fail to engage with the product's primary value proposition, or abandon the initial experience.

Retention measures how many customers continue to use the product over time. This involves repeat usage and continued engagement. Customers are lost from retention if they use the product once but never return, stop using it after a period, or churn (cancel their subscription). Businesses monitor metrics like daily or monthly active users to track this.

Referral is when customers recommend the product to others. This stage indicates customer satisfaction and loyalty, as happy customers share their positive experiences. Customers are lost from the referral stage if they use the product regularly but do not share it, participate in referral programs, or invite new users. Net Promoter Score (NPS) and direct referrals are common metrics here.

Revenue is the final stage, focusing on how the business monetizes its customer base. This involves customers making purchases, subscribing to paid features, or upgrading their service. Customers are lost at the revenue stage if they use the product but do not convert to a paying customer, cancel subscriptions, or reduce their spending. Metrics include customer lifetime value (CLTV) and conversion rates from free to paid tiers.

By measuring the number of customers and the conversion rate at each transition point between these stages, a business can pinpoint precisely where the largest number of customers are being lost, allowing them to focus efforts on improving those specific areas of the customer journey.