HOW TO GROW YOUR BUSINESS USING THE RARRA MODEL? 🤔
Wonder no more, here’s your answer. To put your business growth on the right track, the RARRA funnel is one of two efficient options (see my previous post about RARRA versus AARRR). So you should definitely use it. But that’s easier said than done, right? Follow the guide (me) through all phases of the marketing strategy that is RARRA for the growth of your startup.
The REAL key to exponential growth is user retention, Koen Van Lysebetten
1. First step: Retention 🕺
Given that you can count on a certain number of acquired customers, having a closer look at the why, when & how your customers come back to use your services (or not) is the first stage of the RARRA funnel.
Based on the calculated N Day Retention, make sure you learn about the exact amount of people who are coming back to use your product, service or app & don’t forget to acknowledge the biggest drop-off points.
What you find out should be the lens you view your whole strategy AND every single phase of the RARRA funnel through, from acquisition to referral.
Knowing your product value in and out, how it’s being used by those who use it on the regular will help you know where to focus your attention. What personas are your long-term users, what do they do with your product, your service of your app, what are its most appreciated features, what days is it being most used, etc.? Finding out about all of this will be the stepping stone for the next stages of the funnel.
If you have a way of tracking the use of your product, do so 48h after the customer’s purchase.
If you own an app, don’t hesitate to use cohort analysis to deeply learn about your customers’ journey, what it is about the product they enjoy & what features are popular. There’s simply no better way to improve UX. Work on personalized push notifications as well to drag traffic back to your product. Also, lend a careful ear to your users for quick fixes & wins to keep making your product better.
2. Activate quickly newly acquired customers ✅
Your service, product or app needs to quickly call for the next action in order to activate new users. Is that action buying more? Sharing on socials? Sponsoring? Adding a review?
After you’ve settled on your activation big gesture, you can start the customer onboarding, that will eventually lead to your activation milestone. Beware: don’t underestimate the necessity of an onboarding flow, regardless of how user friendly your product is. Always make sure your customers know what to do with it. That should spare them the time-consuming, and sometimes never-wrecking, trouble of trying to figure out how to handle it and get straight to the reason why they’re using it.
That onboarding flow should then end with a CTA. A successful onboarding boosts retention by 90% and LVT by 670%. Follow this guide to WoW your customers from the get go: The Art of Onboarding Mobile App Users
3. Get your referral system rolling 📣
Would you trust a friend’s recommendation? Well, if you personally wouldn’t, be aware of the fact that 92% of the people would according to a study conducted by Nielsen. Therefore, referral should be your next focus. Imagine how you could expand your customer base just by giving the right incentive to those who already like you. Not to mention the virtuous circle of social proof you’d be generating in the loop. Referral programs also tend to be cheaper per acquisition than other channels and referred customers provide a higher retention rate.
How to get your referral program rolling, is the next question. You can offer referral rewards in the form of discounts on the next order or even cash back. The sole fact of inviting your customer base to invite some friends to enjoy your product is a way of engaging a bit more towards your product and planting the seed that they could talk about you to their entourage. Uber & AirBnb are great examples of that method.
Also, giving rewards to both those who refer AND those who are referred is a great way to create virality and transform referral into a crushing customer acquisition generator.
Use catchy push notifications, pop ups and of course emails with clear links to your referral program, which you should make as easy and understandable as it gets as well.
4. Increase Customer Lifetime Value💰
A loyal customer, that you’ve managed to retain for a long time, has a bigger value for your business than a one-shot user. Indeed, the steady revenue provided by long-retained customers generates predictable revenue, hence growth, which means you can invest on the acquisition of new customers.
Use achievement and progress emails on a weekly or monthly basis to remind them of your business value, by letting them know how much they’ve progressed or how much they’ve achieved thanks to your service, product or app.
Take Duolingo’s achievement emails for example. They:
- Generate upsell opportunities by offering free shipping or special discounts with a minimum purchase.
- Identify Upsell and Cross-Sell Opportunities
- Use behavioral data to send users personalized offers on related products or services, product bundles, and popular or trending products.
Amazon’s mobile app is another example: it shows customers some recommended products based on their purchase history, ratings, and browsing behavior.
Don’t forget to ask them for feedback
If your customers are happy, you should know it; and if they aren’t, you should too. Keep posted on what they think, what they want and what you could improve to keep churn rates low by improving user experience, referral program, etc.
5. Optimize Acquisition Channels 🚀
Separate your customers into several groups to figure out what acquisition channels are best working for you. Careful though, bear in mind that those aren’t the ones that are bringing the most customers but rather those that are sending them further down the funnel. Once you’ve identified them, you know which channels are actually bringing you loyal customers.
Take for instance Facebook & Google Ads. They are great at helping you acquire new customers but what if those aren’t actually coming back? It is only when you look down the funnel that you get to see where the most valuable customers are coming from.
Transposed to your business, what does all this intel tell you? Feel free to reach out to share your thoughts and/or for further advice on how to apply the RARRA model to your startup.
Hope this is helpful. I’m always happy to help you #growwithkoen
Cheers!
