Definition
ARRR is a product growth framework: Acquisition, Activation, Retention, Revenue, Referral. It helps pick the right KPI for each stage.
Example
A typical stack is CAC and signup rate (Acquisition), activation rate (Activation), 90-day retention (Retention), ARPA (Revenue), and referral rate (Referral).
How to use it
- Use one primary KPI per stage to avoid metric overload.
- Tie activation and retention to cohort outcomes, not vanity events.
- Use referral as a signal of product delight, not just marketing reach.
- Define a single activation milestone so teams align on success.
- Review the full funnel monthly to keep trade-offs visible.
Common mistakes
- Measuring stages with inconsistent definitions across teams.
- Focusing on acquisition while ignoring retention (leaky bucket).
- Optimizing one stage in a way that hurts another.
- Treating the funnel as linear when product-led loops are present.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "ARRR Funnel (Pirate Metrics)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Activation Rate Calculator) to sanity-check assumptions.
- Read the related guide (e.g., Activation rate: definition, formula, and how to improve activation) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Activation Rate Calculator: Compute activation rate: what % of new signups reach your activation event (and what you need to hit a target).
- Trial-to-paid Conversion Calculator: Compute trial-to-paid conversion rate and estimate required conversions to hit a target.
Guides
- Activation rate: definition, formula, and how to improve activation: Activation rate explained: how to define activation, the activation rate formula, and practical ways to improve activation without vanity metrics.
- Trial-to-paid conversion: definition, formula, and how to improve it: Trial-to-paid conversion explained: how to calculate it, choose a window, and improve conversion without harming retention.
- PLG metrics hub: activation, trial conversion, stickiness, and adoption: A practical hub for product-led growth metrics: activation rate, trial-to-paid, DAU/MAU and WAU/MAU stickiness, feature adoption, and PQL-to-paid conversion.