The Growth Funnel is a crucial concept in marketing and business strategy, often used to map the entire customer journey and identify areas for optimization.
The most widely recognized framework for the Growth Funnel, especially in startups and product-led growth, is the AARRR Funnel, also known as Pirate Metrics.
The AARRR Growth Funnel (Pirate Metrics)
Developed by Dave McClure, AARRR stands for the five key stages a user goes through:
| Stage | What it Measures | Goal | Key Activities |
| Acquisition | How users find you (e.g., website visitors, leads). | Attract potential customers. | SEO, Content Marketing, Paid Ads, Social Media. |
| Activation | Users’ “Aha! Moment”—their first truly valuable experience. | Get users to experience the core value of the product/service. | Sign-ups, completing a key action, first-time feature usage. |
| Retention | How many users come back and continue to engage. | Encourage users to keep returning and engaging. | Email campaigns, push notifications, continuous product value/updates, loyalty programs. |
| Referral | Users recommending your product/service to others. | Turn happy customers into brand advocates. | Referral programs, social sharing features, Net Promoter Score (NPS) surveys. |
| Revenue | The actions that generate income for the business. | Maximize the monetary value of a customer. | Purchases, subscriptions, upselling, increasing Customer Lifetime Value (CLV/LTV). |
Funnel types
It’s important to note that the term “funnel” can refer to a few different models, though the overall concept is similar:
- Traditional Marketing/Sales Funnel (AIDA): Focuses more linearly on moving a prospect toward a sale.
- Awareness
- Interest
- Desire
- Action
- The Growth Funnel (AARRR): Expands on the traditional model by emphasizing the post-purchase experience (Retention and Referral) as critical components of sustainable growth.
The primary goal of using a Growth Funnel is to create a data-driven approach to understand where customers drop off (bottlenecks) and continuously run experiments to improve conversion rates at every stage.