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AARRR - Pirate Metrics for Ecommerce Analytics
by bloomRail Staff - October 11, 2021

What is Ecommerce Analytics? Whether you’re just beginning to sell your products online via Amazon, running a business via Woocommerce or Shopify, or managing an enterprise-level organization, acting and planning without studying data and metrics is a lot like driving a car while wearing a blindfold. Tracking and analyzing data for your e-commerce business is key to making good business decisions that lead to sustainable growth. Making moves based on instincts and whims can only take a business so far: concrete metrics will take it to the next level via truly informed decisions. Ecommerce analytics can involve tracking user-behavior on your e-commerce website, keeping your inventory management tight, analyzing sales revenue trends to plan for marketing (as we discuss under #3 here), and much more. Here, we’ll discuss AARRR, one of the approaches to e-commerce analytics that can create sustainable growth for your online business for years to come.

The AARRR Framework

A good overall approach to e-commerce analytics uses a growth funnel with AARRR metrics:
  • Acquisition
  • Activation
  • Revenue
  • Retention
  • Referral

AARRR, created by Dave McClure in 2007, and sometimes called Pirate Metrics for auricularly convivial reasons, measures company growth while staying simple and actionable and focused on what’s important. Let’s break it down:

Acquisition
Acquisition refers to data collection about where your ecommerce website’s visitors are coming from: search engines like Google, links from social media posts, paid advertising, etc. Great acquisition metrics also include the number of ‘engaged’ users who stay on the site for a while and interact with it, rather than just page hits. Knowing where your customers are coming from shows which forms of marketing are bringing customers to the table and which ones aren’t, leading to actionable insights for where to invest and what to adjust.

Activation
Activation refers to metrics about users signing up for a product-trial or newsletter. They aren’t necessarily paying customers yet, but they’re activated and much closer to a sale than other visitors to your ecommerce website. Keeping track of signup trends is another key piece of data for making decisions to create sustainable growth.

Revenue
Tracking and looking at trends in sales revenue allows for making actionable marketing decisions. Having a clear and concise window into current and past sales trends helps you grow your business as you decide where, when, and how to market your products. For online retailers, bloomRail’s Inventory Forecaster is a great tool for keeping track of sales trends (in addition to its inventory-management magic).

Retention
Sustaining customer-relationships and creating repeated sales is key to growing almost any business, so keeping track of retention data is important. It is far more expensive to reach and acquire new customers than it is to retain them, and happy, loyal customers are more likely to lead to referrals, the next, final, and arguably most important group of metrics in our AARRR funnel.

Referral
Referral metrics are The Kinks of e-commerce data: they’re one of the best, most important and influential groups, but they are often overlooked. Word-of-mouth and social media referrals from your loyal customers are the most powerful way to grow your profit margin, as they create far more sales than paid ads while adding very little to expenses. Referral data analytics provide insight into who is spreading the good word about your business and what channels they are using, providing actionable information for developing more effective referral strategies.

AARRR Pirate Metrics only provide a starting point for an e-commerce business to focus on the most important groups of data to track and analyze. At bloomRail, our experts are always eager to chat about e-commerce analytics and the best customized tools for your specific business, with no strings attached. Hit the Contact bloomRail button below and take advantage of our free consultation, anytime!

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