AARRR Growth Funnel: how and why using it for backlog prioritization.
What a priority matrix is
A priority matrix is a management tool for determining the development vector where priorities are visually divided into four (or more) quadrants.
There are matrices for personal time management and complex business projects. Most of them have derived from the Eisenhower matrix created to manage personal tasks.
A prioritized backlog visually divided into 2x2 matrix in Ducalis.io
When to use a priority matrix
Use an action priority matrix when you have limited resources and you want to distribute them rationally to maximize performance and ROI.
Placing backlog tasks into four quadrants will help you visualize their impact on the main business objectives. Focus the team efforts on one of the four quadrants to have a clear understanding of where you’re heading, what results, and when to expect.
How the quadrants work
One of the most efficient and easy to use is the 2x2 matrix. It consists of two evaluation criteria: one positive (e.g., Value, Impact, or Revenue) and one negative(e.g., Effort, Costs, or Risk).
Tasks evaluated by the criteria are divided into four quadrants:
Quadrant 1—high positive score and low negative score. This quadrant is often called Quick Wins, and its tasks are low-hanging fruit that will bring you positive results immediately. Most likely, you should do these tasks first.
Quadrant 2—high positive score and high negative score. Here are your Major Projects that won’t bring immediate results but are strategically valuable and should be considered on your roadmap.
Quadrant 3—low positive score and low negative score. These are so-called Fill-Ins—cheap solutions with no significant impact. These tasks should be further discussed and implemented only when you have extra resources.
Quadrant 4—low positive score and high negative score. These are Thankless Tasks. They bring little to no value and cost you a lot. Delete them or reconsider the solution to become more valuable.
How to create and use a priority matrix
1. Think of what is currently important to your business to come up with appropriate criteria.
Do you have deadlines, and time is critical? Or you must avoid risks at all costs?
Two criteria are enough for a fast and simple prioritization. Yet, they aren’t enough for complex projects where you must consider and juggle multiple stages of user behavior or business objectives. We in Ducalis.io estimate all the vital elements for our product and just filter the matrix by the criteria we need more focus on at some point in time.
We hide some criteria to consider tasks influencing only the objective important now.
2. Decide on the score range.
What numbers will your team use when estimating the criteria?
Each criterion should be evaluated by the same numbers with prescribed interpretation. We use numbers from 0 to 3 where 0—no impact, 1—low impact, 2—medium impact, 3—high impact.
We use criteria tooltips so that we don't have to keep in mind what they and the scores mean.
3. Estimate all the necessary tasks together with the team.
Who takes part in the project and can bring a unique perspective to the table? Does the project require only engineers or designers and copywriters’ efforts as well?
Considering each task by the whole team strengthens your shared understanding and gives the best prioritization results. In our team, managers evaluate feature Reach and Revenue, engineers and UX/UI—Development Time, and everybody must estimate Activation, Retention, and two product-specific criteria, Speed and Collaboration.
Most of the criteria we evaluate together to keep our shared understanding solid, and specific ones we leave to experts.
4. Study and discuss the prioritization results.
Why have these features made it to the top? Do you all agree they are most valuable now and must be implemented?
Never take the prioritization result into work unquestioningly. Prioritization is a tool to help you make the right decisions and not make them instead of you. Discuss your top priorities with the team at the planning meeting and make sure you all understand what must be done, why this way, and why it’s important.
To Sum Up
A priority matrix is simple and efficient. You can make it far more powerful by using automation tools. Ducalis.io allows you to create a complex prioritization framework you can use both as a weighted decision matrix and action priority matrix and switch the criteria focus in no time.
Try our matrix templates. Free to sign up and free to use. No credit cards. Just jump in and prioritize for your growth.
AARRR Framework Definition:
stands for Acquisition, Activation, Retention, Referral, Revenue
metrics to understand users’ behavior
used for customers’ journey optimization and goal setting
Acquisition
Acquisition focuses on the marketing channels you use to tell about the product.
Answers the question: Through what channels will people find out about the product?
Examples: SEO, ads, social media.
Activation
Activation focuses on the first actions you wish people to take when they encounter the product.
Answers the question: What percentage of the visitors falls into leads?
Examples: sign-up, booking a demo, downloading booklets.
Retention
Retention focuses on people coming back repeatedly and using the product.
Answers the question: What percentage of the leads falls into regular users?
Examples: web sessions, opening emails, returning to the blog.
Referral
Referral focuses on people spreading the word about the product.
Answers the question: Do users like the product enough to tell others?
Examples: sharing links, SM reposts, word of mouth.
Revenue
Revenue focuses on the money you make from turning leads into paying customers.
Answers the question: Do you successfully monetize these behaviors?
Step 1: Identify the AARRR metrics for your product.
Step 2: Set up tools for collecting the data.
Step 3: Analyze the data to understand what stages of user behavior must be improved.
Step 4: Think about how you improve them and plan further actions.
Why Prioritize with AARRR
It is critical to analyze and understand users’ behavior. But presuming, you’ve gathered the data and decided on one or two metrics you need to increase. In what order will you implement the tasks from the backlog for better results?
Improving a metric requires commitment. You want to be sure every issue your team solves impacts it positively. And you want to impact it faster at the lowest cost. That’s when AARRR becomes your prioritization framework.
Ideas prioritized with AARRR criteria
How to Prioritize with AARRR
1. Transform Metrics into Scorecard Criteria
Think of the metrics as questions a task or idea must answer to understand its influence.
E.g., How the solution increases the number of people:
attracted to the website/app? (acquisition)
registered/installed the app? (activation)
using the product regularly? (retention)
eager to tell others about the product? (referral)
paying for the product? (revenue)
These generalized examples are great for a start. Specify the questions and descriptions later when you see these don’t fit. Don’t waste time trying to come up with ideal questions straight away.
2. Decide on Scope for Prioritization
AARRR is a marketing framework. We use it for prioritizing features as well. You can use it for both—divide the issues into scopes and clarify the criteria descriptions. We use two different boards to prioritize features and marketing activities. Each of them has a few adjusted AARRR criteria.
Feature Prioritization
For estimating stories and tasks, we use Activation, Retention, and Revenue with these descriptions:
Activation—Solves onboarding problems; Customer gets the value faster; Helps to understand how it works.
Retention—Helps to sustain usage frequency. The evaluation must be regular. Helps teams to evaluate on time. It’s important to remind users how many issues they need to evaluate.
Revenue—Helps to sell. Easier to make a demo. Customers understand the value. Customers don’t want to buy without it.
We also have Reach, Effort, and two product-specific criteria—Speed and Collaboration.
Marketing Activities Prioritization
For estimating marketing efforts, we use two criteria from AARRR:
Acquisition—How much traffic to the landing page expected? 0—no traffic 1—>100 2—100-500 3—500-1000 and higher
Activation—How many conversions expected? 0—no conversions 1—a few 2—about a dozen 3—dozens and more
We also use the Effort, Price, and Analytics criteria.
AARRR metrics should be improved equally. You can’t spend all your time enhancing retention only. You’ll have nobody to retain because acquisition and activation weren’t working.
At the same time, you can’t allow a substantial decline in one of the metrics and may require precise concentration. Growth means constant zooming in and out.
So, AARRR criteria should be of equal value and have the same weights most of the time. And when some of them require more team investments, increase their weights. Thus, tasks influencing the needed metrics skyrocket to the top of priorities.
Change criteria weights to manage the team's focus
4. Add Effort Criteria
There is one vital point missing in AARRR—it doesn’t take into account costs. Increasing your key metrics is important, but you can’t afford to neglect the price. To grow faster, you want to find quick wins. Decide on effort criteria (e.g., development complexity or promotion cost) and add them with negative weight to highlight the cheapest and most valuable solutions.
5. Choose Scores
Decide on the numbers to use for estimation. Fibonacci or Exponential are great sequences to use. We use the 0—3 range. The numbers are not that important as how you explain them. Add score descriptions to facilitate the estimation. You’ll find geometric sequence in our AARRR template:
0 — No impact
1 — Minimal
2 — Low
4 — Medium
8 — High
You can also use the exact numbers as you saw in the description of Acquisition and Activation in the 2nd step.
Involving your team enhances the prioritization greatly. Together you estimate more accurately and build team clarity.
Divide the criteria among the teammates who are best at evaluating them. Collect all opinions, regardless of a newbie or an expert—their average score is the most accurate estimation you ever get.
Estimate independently, out of the meeting room. Average estimation is precise when people don’t deliberate. Try to preserve unique visions. Don’t emulate each other’s thoughts—don’t discuss possible scores before you’ve assigned them.
Key Take-Aways
AARRR funnel is for analyzing users’ behavior and goal setting.
Use AARRR as prioritization criteria to make sure you remain focused.
Use criteria weights to control your focus.
Consider efforts and expenses.
Customize criteria descriptions and add score explanations to them.
Use templates to minimize the time spent on setting the framework up.
AARRR Prioritization
What to do first for optimizing product growth funnel.
Transform AARRR steps into scoring criteria for Weighted Scoring Matrix.
Decide on criteria weights to focus on specific goals more. E.g. Retention is more important now.
Decide on the score scale. E.g. estimates in affected users or just scores from 1 to 5.
Add Effort Criterion with negative weight to consider development.
Prioritize all product related tasks with scores for all tasks by each AARRR step.
AARRR score = A(Score x Weight) + A(S x W) + R(S x W) + R(S x W) + R(S x W) - Effort (score x weight)
AARRR
Metrics for optimizing funnel of product growth.
Acquisition—arrives from marketing channels telling about the product.
Activation—visitors converted into active users (e.g. passes onboarding).
Retention—users returning to use the product.
Referral—people spreading the word about the product.
Revenue—convert active users into paying customers.
Try
AARRR Framework
Ducalis.io Templates
AARRR Feature Prioritization
All
AARRR
Features
Feature prioritization based on five user-behavior metrics every business should be considering.
AARRR Marketing Prioritization
All
AARRR
Marketing
Marketing prioritization based on five user-behavior metrics every business should be considering.
