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Understanding the pirate funnel: the most important metrics!

Renan Andrade
Renan Andrade

May 8, 2024

Understanding the pirate funnel: the most important metrics!

In any situation that involves decision-making, whether professional or personal, every step must be justified based on something concrete. From the beginning of the concern until the final moment, different influences and situations interfere in the purchasing decision to be made. When we talk about marketing strategies, the scenario is similar. And to better understand and ensure that the final decision is something positive, we rely on the pirate funnel.

You may not have heard this term, but the practical part will certainly make you understand the importance and strong presence of this strategy in different companies in your daily life.

To learn more about what this funnel is and what important metrics to consider in your evaluation, continue reading!

Pirate Funnel Metrics

Pirate metrics are, in simple terms, a practical way of categorizing different metrics and KPIs (Key Performance Indicators) used in a strategy. The main objective is to analyze the life cycle of a potential consumer within the structure built to attract and win them over.

The funnel is used as an analogy because it involves gradual steps, filtering from the largest quantity to a number more qualified for the objective in question. Going through each step and funneling along the way, the pirate metric is organized by acquisition, activation, retention, revenue and recommendation.

This type of funnel is essentially used to understand the consumer journey and find bottlenecks to then improve the strategy.

Inbound marketing strategy and the pirate funnel strategy

Important for every marketing strategy focused on acquiring and converting leads, inbound marketing is similar to the AARRR strategy. In the first, the organization is carried out in three phases: top, middle and bottom. Formatted as a funnel, the actions carried out are based on allocating attention and qualified content to each of the stages.

Once the pirate funnel is complemented, the complementary strategies can be overlapped and analyzed together so that the planning has an even clearer objective for each of the stages.

Understanding the pirate funnel: the most important metrics! blogpost

User journey map

To correctly adapt the processes and stages, it is necessary to have well-defined questions such as where the potential customer is in the funnel. Creating content to feed each of the needs implicit in the trajectory, the user's purchasing journey map appears as a way of identifying the lead's location in the funnel and the following stages.

This way, it is possible to understand the processes and appropriately program the actions that will keep this user in the process until the final objective: conversion to a customer. With the map, the team is always one step ahead, equipped with what is necessary to solidify the relationship and resolve possible issues to be raised.

Understanding in a practical way where the leads acquired during the process are and how qualified they are is essential for possible problems to be resolved and, during the process, there are more gains than losses of potential customers, thus improving the rate of conversion.

Sales funnel: AARRR stages and metrics

At each stage of the journey, the AARRR funnel has values ​​and variants to consider. This is because each stage has an objective and, consequently, results to be obtained from the actions performed by users throughout its useful life.

Without measuring and analyzing these metrics, the work cannot be optimized or even corrected according to the bottlenecks that would be indicated for improving the correction of each stage.

To think about how to carry out the next steps efficiently and generate positive numbers for the defense of the process, it is necessary to keep in mind what to analyze after each step in the user map. Below, check out what should be analyzed so that it receives due attention from the team!

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A - Acquisition

In the initial stage of the pirate funnel, the objective is to understand how users arrived at the website, that is, to analyze which channel is bringing the largest quantity and the most qualified leads, how long these users spent consuming your content, which creations who are not engaging as much and how participatory he is in responding to calls for action.

Thus, it is possible to analyze the following metrics:

  • New visits to the website (set a period of time for comparison);
  • Leads that were won;
  • Traffic generated for the website/blog according to each medium;
  • Retention rate (reading time on the website);
  • Bounce rate (percentage of user departure according to time spent on the website);
  • CAC Customer acquisition cost organized according to the method of arrival.

A - Activation

The party responsible for understanding how long it took to acquire one of your products, that is, at what point the decision was made to purchase a service that you made available free of charge for a while.

As an example of this experimentation, we have Netflix, a streaming on the mend which offers 30 days of free services for the user to use the service and, consequently, end up subscribing monthly, that is, she applied the freemium stock strategy. As simple as this action is, it is something that can generate great results. Until it was time to make the services available for free, the company probably carried out A/B testing and analyzed metrics such as:

  • Time between arrival and activation;
  • Number of new users who tested your service and/or available product;
  • Number of users who purchased the service after the free/trial version.

R - Retention

Retention is nothing more than constantly nurturing this lead so that they return and continue consuming your content or purchasing services. For this stage, useful information will direct you to what is and is not working in your offers and help you understand whether the sales flow is appropriately automated for this lead.

Therefore, the metrics to be considered are:

  • Amount of time that leads remain active in the process;
  • Analysis of retention rate and churn,
  • Value referring to the user’s lifetime on their journey.

R - Revenue

Being one of the fundamental parts for any type of company, revenue is the metric that justifies the entire process, since the objective with the pirate funnel strategy is to create a conducive environment that results in the acquisition of the product/service that is offered.

The lower the Customer Acquisition Cost, the better the revenue, and this will be proof of the good progress of the adopted strategy.

  • How much the new customer cost the company;
  • Customer lifetime and how much this metric is worth;
  • Amount of conversion and subscription from the free model to the paid service.

R - Recommendation

Important to understand consumer behavior and their satisfaction with what they purchased, the recommendation is nothing more than understanding the number of customers who drive the service. As organic marketing is known as the classic “word of mouth”, it is at this stage that there is great potential for developing and expanding sales.

This happens because, when satisfied with what they have purchased, the customer feels much more comfortable and is encouraged to recommend it to others who also benefit from it. Therefore, as in a pyramid effect, it becomes much more beneficial for the company. To do this, it is possible to create strategies to encourage this recommendation and then measure the efficiency of this process through the following metrics.

  • Number of users who recommended the service;
  • Number of leads that were generated from the indication mentioned above;
  • Rate of users who received the referral and made an acquisition.

Explore the possibilities!

With the pirate funnel and its efficiency metrics, it is possible to understand consumer behavior and adapt the strategy so that the product and/or service increasingly finds its place in the market. Now that you understand the importance of carrying out the entire sales process in an organized way to obtain the best results, it is important to study how to put them into practice and explore each of the metrics to enhance results and correct possible execution errors.

Understanding the consumer and how your strategy impacts their behavior is fundamental to the health and prosperity of every company. Do you want to know more about this planning and its importance in practice? Read the post “AARRR: Pirate Metrics in Marketing Strategies”!

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