The Pirate Funnel - Growth Hacking Series | Articles

“Growth Hacking” has been a buzzword and the object of many fantasies in recent years. Everyone in the digital marketing world wants to be a “Growth Hacker” and every company wants one. The term was first introduced by Sean Ellis in a blog post where he stated that a growth hacker is “a person whose true north is growth. Everything they do is scrutinized by its potential impact on scalable growth.”

In short, Growth Hacking could be defined as a marketing strategy that aims at achieving accelerated Business growth by identifying its critical points. One of the main elements of this method is the use of tests & experiments with the goal of spotting gaps and opportunities to drive smart and fast growth within your business.

But isn’t this what a data-driven marketing strategy does as well? Isn’t it the goal of all digital marketers to achieve growth and test out different solutions by iterating until they find the best one? 

In fact, Growth Hacking can be a confusing or misleading term. Indeed, you don’t really “hack” growth. There is no fit-for-all magic trick to double your sales from one day to the other. Terms like Growth Marketing or Data-driven Marketing would, I believe, be more fitted. 

But don’t get me wrong; even if we do not specifically agree on what to call it, there are a lot of interesting concepts behind Growth hacking. And in this article, we’ll start with the basics, the Pirate Funnel.

The Pirate Funnel


AARRR… ! That’s what a pirate would say, but that’s also the metrics of the AARRR framework or Pirate Funnel. It stands for the five phases of a customer’s lifecycle and they help to show you where to focus your attention. These are: Acquisition, Activation, Retention, Referral, Revenue.


1. Acquisition - How do you reach your target audience?

In this phase, you need to figure out who your customers are, where they are and how you reach them. There are many acquisition channels online and it’s important to ask yourself the right questions. What is the maximum number of people I can reach on this specific channel? How much does it cost to attract one customer with this channel? How does it compare to another channel? Test & Learn is key here.


2. Activation - How do we get users to take a desired action? 

The objective of this phase is to provide the user with an amazing customer experience. And for this, it is for example useful to understand what are the behaviors of your most valued customers. You can then use these success factors and turn them into your activation metrics. 


3. Retention - How do you keep users interested in your product or service?

It is key here to understand how you can continuously provide value to your customer base to keep them loyal. The first step is to identify customer churn and monitor early signs of churn, and then how to fight. It can be through the use of a more personalized newsletter for example if you notice a decreasing opening rate.


4. Referral - How likely are your customers to recommend your product or service?  

This is one of the most complex phases to track because people can use all sorts of ways to tell others about your business. But there are a lot of techniques you can use to track referrals, such as emails with referral bonuses, referral contests, social media campaigns where it’s easy to share the product with others, etc.


5. Revenue - Why should customers pay for your service?

The final stage of the AARRR framework. How many customers turn into paying customers? What is the average order value per customer? You need to set actual revenue targets for your users. This will help you define your most profitable customers. 


After you’ve identified the type of data you want to collect for each of the phases of the pirate funnel, you then need to implement the right tools and methods for collecting, measuring and analyzing the data. And as you gather this data, continue to test, run plenty of A/B tests to find ways to continuously improve user engagement at each phase of the funnel. Every time you improve one step of your Pirate Funnel, you are one step closer to improving your “North Star Metric” and therefore, your growth. 

The testing methodologies and processes that we use at Semetis will be the topic of the next article of this Growth Hacking series. Stay tuned!

publication author Charlie Deschamps
Charlie Deschamps

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