Chapter 16: The A3R3 Growth Funnel

In Chapter 15, we went through the process of describing the customer’s journey through a growth funnel, which we called the A3R3 funnel or the AAARRR funnel.

The funnel describes the stages of an ideal customer’s journey – which are the stages of Awareness, Acquisition, Activation, Revenue, Retention, and Referral.

In this chapter, we will learn more about the growth funnel and in the chapters following this one, we will be dedication one chapter to each stage in the funnel.

We saw 2 examples of the user’s journey in Chapter 15 where we described how they go through each stage of the funnel.

Now, let’s look into the possible methods of driving the entire growth funnel as a growth marketer.

I want you to put your growth marketing hat on. Let’s get started.

Let’s say Startup A hired you as a growth marketer to define and drive their entire growth marketing funnel. Your first job will be to define the stages of the funnel well and the next step will be to design growth experiments for each stage of the funnel.

Let’s say the startup is an edutech company that creates online educational products for 5-15 year olds.

Here are some of the growth experiments we can plan for this startup:

  1. Build influencer partnerships with mom bloggers who have parents of 5 to 10-year-olds as their target audience (since you will be mostly targeting parents of your audience) and create collaborative content with them.
  2. Ask the influencers to offer a free trial class by your startup to their audience on an Instagram story.
  3. Once parents and their children take the free trial class, offer them an easy onboarding user experiment, free training on the tool you use to teach online.
  4. Provide the first 100 users who have taken a free trial class a 10% discount coupon for their first purchase of any online learning package for their children.
  5. Review the data of how many children took all their paid classes in the package and provide the least likely to renew customers a 20% for their renewal.
  6. Ask the most engaged customers to share your startup’s offering with their parents in their community or network.

These are only some of the experiments. I’m sure you can think of many more!

Good job. Now we have one growth experiment idea for each stage of the funnel for this startup.

Let’s do back to the examples and give the names of the stage to each experiment:

  1. Influencer partnerships with mom bloggers – AWARENESS MARKETING
  2. Influencers to offer a free trial class – ACQUISITION MARKETING
  3. Easy onboarding user experiment and free training on the tool – ACTIVATION MARKETING
  4. 10% discount coupon for their first purchase of any online learning package – REVENUE MARKETING
  5. 20% for renewal of churn-risk customers – RETENTION MARKETING
  6. Ask the most engaged customers to share your startup’s offering – REFERRAL MARKETING

This example should give you an idea of how you can design growth experiments for each stage of the funnel.

While a user could be in any stage of the funnel at any given time, it’s also important to understand that a new startup will have most users in the AAAR stages that are Awareness, Acquisition, Activation, and Referral. Throughout this phase of the startup, referral marketing campaigns will be highly ineffective since the referral-ready customer segment will be too small to make a huge difference in the marketing numbers.

This is important to know so you can design and plan your marketing experiments based on what phase your startup is in.

When a startup is very mature and has seen multiple cycles of the funnel, all stages of the funnel need to operate in parallel and growth experiments and marketing campaigns run based on segments across all stages at all times.

As an overview, here’s an infographic of all the stages we learnt in the A3R3 funnel along with some experiments for each – as well as the metrics you should measure at each stage.

That’s a lot of information but we will go into each through the next chapters:

complete AAARRR growth metrics