When we travel from one place to another we are clear about one aspect that is our destination. Assume you are traveling from Place A to Place B, so you know the starting point = Place A, and your destination point is Place B. But the mode of this movement can vary. You can take flight, car, train etc. Assume your main goal (OMTM) is to find the cheapest path from point A to point B. To do that you need to analyze every path and find solution.
Similarly, for a website we know the destination or goal. You need to define your OMTM (One Metric That Matters). Generally, this destination either be generating sales or generating leads. The (A)AARRR funnel is a well known funnel in growth hacking or conversion optimization community. This funnel also called the Pirate Funnel.
The (A)AARRR consist of five distinct elements. This funnel shows the steps each customer must progress in order for your business to extract value from them. These matrices are crucial to track important information for your business.
Acquisition = You want people to signup for something.[e.g. You create an account on a site to purchase your travel ticket]
Activation = People who activated, are using your product. Often happens user signup but never use your product. [e.g. you place an order to book your ticket]
Retention = Retain your customers to place order again. [e.g. you get a special offer from your travel booking site to place another order. An lucrative offer you can’t resist to apply]
Referral = Ask users to give referrals sharing some benefits. [e.g. your travel booking site offers you special $10 for each successful referral. That can motivates you to refer more users]
Revenue = Understand what users are buying and why. [e.g. you booked economic class air tickets for your family and a business class ticket for your business trip. This information helps to analyze the type of users you are and accordingly the site will share offer with you.]
Awareness = Notify users about any special offers or information to increase awareness among users. [e.g. You get notification from your travel booking site about any special offer]
These are the matrices which are crucial to track for long term success. Implement the funnel using tool like zapier, google tag manager, google analytics, heap or mixpanel.
Let us know if you’ve additional questions.