AARRR funnel
Definition
The AARRR funnel is a five-stage growth framework — Acquisition, Activation, Retention, Referral, Revenue — used to model how users move from first contact to long-term value, and to identify where a product loses them along the way.
Dave McClure introduced AARRR as a structured way for startups to stop obsessing over vanity metrics and start measuring what actually matters. The funnel is a diagnostic tool: run the numbers at each stage and the broken stage becomes obvious.
Acquisition tracks how users first discover the product. Metrics: organic traffic, paid CAC, channel conversion rates. The key question is whether acquisition is sustainable and whether acquired users are the right ones.
Activation is the first-value moment — the point where a new user experiences what the product is actually for. This stage is the most commonly underinvested. Metric: the percentage of new users who complete a specific first-value action.
Retention measures whether users come back. Most consumer products target day-1, day-7, and day-30 return rates. Low retention means the product hasn't built a habit. No amount of acquisition investment fixes a retention problem.
Referral captures organic growth — users inviting others, sharing outputs, or generating word-of-mouth. Metric: viral coefficient (how many new users each existing user generates). A viral coefficient above 1.0 means the product grows without acquisition spend.
Revenue closes the loop with business viability. Conversion rate, average revenue per user, and lifetime value vs. customer acquisition cost are the core metrics here.
Analyzing the AARRR funnel typically happens in a meeting — a whiteboard covered in stage-by-stage conversion rates and hypothesis lists for the biggest leak. BoardSnap turns that session into a clean summary with the key numbers and next experiments captured as action items.
Examples
- A whiteboard showing funnel stages with conversion percentages at each step
- Discovery that activation rate is 31% — the biggest leak — leading to an onboarding experiment
- Mapping day-7 retention by acquisition channel to identify which users stick
- Calculating viral coefficient from invite data during a referral stage review
Snap a aarrr funnel. Ship its actions.
BoardSnap turns any whiteboard — including this one — into a summary and action plan.