How to Convert Customers with the AARRR Funnel and Email Marketing

If there is one goal that unites all business, it is the need to generate sales and retain customers.But in reality, not every business is achieving this goal. Some customers get lost in the process.

The AARRR framework is made for businesses to convert and retain leads through a scalable customer journey.

Your email marketing has a lot to do with how you move leads through your AARRR funnel and convert them into customers. When done right, it can plug the holes in a leaky funnel…

In this guide, you’ll learn:

  • What is the AARRR framework?
  • Acquisition: How to acquire leads for your business
  • Activation: How to activate your prospects
  • Retention What methods would retain your customers
  • Referral: How to boost customer referrals
  • Revenue: How to generate more revenue

Let’s get it on.

What is AARRR framework?

The AARRR framework helps you better understand your customers and measure their conversion through your sales funnel.

The AARRR framework is made of metrics that you could measure in your customer journey: Acquisition, Activation, Retention, Referral, Revenue.

aarrr funnel

Each aspect of an AARRR funnel can be measured separately which provides you with multiple touchpoints for optimization opportunities and maximum scalability.

That scalability has a lot to do with email marketing. Your email marketing campaigns are what would move your leads from one stage to the next in your AARRR funnel.

Let’s go through each stage and understand how email marketing could help you scale up your business performance.

aarrr metrics funnel email

Acquisition

The acquisition stage starts the moment you identify your prospect as a lead. Acquisition is mainly around getting new leads and the focus point is the way you go about it.

Lead acquisition means engaging with your potential customers where they are and triggering them to sign up / identify themselves.

To put it simply, exchanging a user email for a:

  • PDF guide
  • Checklist
  • Ebook
  • Email course
  • Discount/offer
  • Access to a VIP community, etc.

Here is an example from The Mogul Mom offering access to their community and resources in exchange for an email subscription.

lead generation pop in example

If you’re not working on building your email list already here are lead generation tools you can use to grow your email list, find contact information, and close deals.

At this stage you can ask for the basic information of your potential customers as well as:.

  • First name,
  • Email Address,
  • Location,
  • Gender,
  • Interests,
  • Lead qualifying questions.

The data you request at this stage is determined by your email marketing segmentation needs and will influence how you qualify, personalize, and persuade your new leads. what you can do to qualify, personalise, persuade and what you need for the email marketing segmentation you will be running.

At the acquisition stage, you’ll be sending the first transactional emails to the newly acquired lead. Often, it is a confirmation email, welcome email, or any type of email that sets the right expectation for your leads and prepares them for the next step.

In such cases, your acquisition email would include:

  • Downloadable PDF/eBook
  • Case Studies
  • Whitepapers
  • One-time coupon code
  • Next steps, etc.

Once you have acquired your new lead, you start building a profile with more customer attributes. For some, they might tongue-in-cheek call it “the Stalking”.

Customer attributes is data you collect about a lead which helps you personalize your communication with them at every touchpoint. This includes your emails, in-app messaging, and website copy. .

Personalized emails are effective at/for moving your leads through your email marketing sales funnel. According to Small Business Trends, 82% of marketers reported an increase in open rates through email personalization.

The key is to have enough data about your customers so you can deliver value while promoting your core message

Here is a list of the most important acquisition metrics to keep an eye on when building your AARRR metrics:

  • New leads during a specific period
  • Overall email subscribers
  • Resource downloads
  • Helpdesk chat messages

Lead generation is the way to increase your email acquisition.

Among the best email acquisition tactics, you could go for lead-magnets, webinars, onsite retargeting, chat widgets, newsletter subscriptions, landing pages, etc.

Let’s have a look at a couple of the best email examples that you could use at the acquisition stage.

Confirm email subscription

When creating your own confirmation email make sure you keep your content short and direct. To further ensure it gets read, create responsive emails that would look good both on laptops and mobile devices. Chances are that more than 50% of your leads will check their emails on the go.

Here is a stunning confirmation email example from Premium Beat.

I recommend you use an email marketing automation service to trigger your confirmation emails on:

  • Newsletter subscription
  • Order confirmation
  • Booking confirmation
  • Registration confirmation, etc.

Thank your new leads for subscribing

People like to feel a sense of belonging. When new leads join your email list, make them feel that their presence is wanted and appreciated.

Send a thank you email to express your gratitude to your new leads.

This email also moves directly into activation by giving new subscribers a discount to the Designmodo Shop.

Send lead nurturing emails to qualify your leads

At this stage of the AARRR funnel, your leads are considered marketing qualified leads, but for you to push them to become paying customers, you’ll need to make them sales qualified leads and ready for your sales email.

Lead nurturing is the best practice for lead qualification.

Duolingo nurtures leads by asking them to nominate a favorite teacher for a contest.

That is a smart and fun way of engaging with your audience while also showing others how popular your platform is.

lead nurturing email

Now that you’ve been inspired by these acquisition email examples, let’s move on to the next stage of the AARRR framework.

Activation

The activation stage of your AARRR funnel is where your user tries your product or service. Show them why your product or service has value, why it is indispensable and the problems you solve for them. In short: make them actively use and benefit from your product.

Everything becomes clear when they learn about and experience your unique value proposition first hand.

This is commonly referred to as the “Aha!”-moment’. The moment your prospect first realises how to use your product and experiences the value. If you’re helping them save time on accounting then the moment they realize this benefit first hand is the moment they’re likely keep using your product.

The activation process includes:

  • Free trial periods
  • Product sampled
  • Free consultations
  • A request for quotation, etc.

It depends on what industry you’re in and the nature of your product or service.

Some people confuse “Acquisition” and “Activation” or find it difficult to differentiate between both. Think of it this way:

As a business, you’re job is to sole a pain point for your customers. At the “Acquisition” stage you’re giving a hint of solving customer issues through your content, yet, at the “Activation” stage you’re showing it through product demo’s, trials and samples that turn into active leads.

As a part of your AARRR metrics, measure the following KPIs at the activation stage:

  • New trial signups
  • Conversion from free to paying customers
  • Churn rate

Activation can look different for each product, depending on how you’re going to reach that “Aha!”-moment.

Converting leads directly determines revenue, because you need to be able to show free trial users the value of your product in order to convince them to upgrade to paying customers.

Let’s have a look at how some brands craft their activation emails.

Use one CTA button

The success of your activation email highly depends on an easy, clear Call To Action.

Your email readers are more likely to click on the CTA when they understand what the next step is.

You can see what I’m talking about in this email from Thread.

AARRR activation email

The next step is crystal-clear for the email readers. The CTA button should stands out.
Motivate activation with customer rewards
Encourage your leads to accomplish your activation goals with a surprise reward.

Using compelling imagery for your products and business could increase your customer conversion.

Show the next steps to take

For SaaS businesses specifically, focus on demonstrating the next steps for your new users.

Think about your software and its complexity, and map out the steps you want your users to take to ensure a successful activation process.These should be important milestones that move them closer to receiving the value your product promises.

For example, Acme Inc offers an accounting tool that helps users stay on top of their business finances. Important steps would be connecting a bank account, setting up a chart of accounts, importing past transactions, etc. Its onboarding flow would walk users through this process with as little friction as possible.

Amazon AWS does a great job breaking down their activation process in the following email.

Re-engage inactive customers

Contacts subscribe to your email newsletter or product when they are most interested. Over time, engagement will drop. This is an inevitable part of email marketing.

Reactivating your email list by creating re-engagement email campaigns allows you to re-engage inactive customers for a chance to increase their lifespan with your business and keep them closer to your product.

This email works as a great example to remind inactive customers to purchase before the end of the year.

The email titled “Don’t let your FSA dollars go to waste” triggers the curiosity. Like what is FSA dollars?

AARRR reengagement retention email

Suppose now you have acquired and activated your customers. Let’s move onto the next stage of the AARRR framework.

Retention

Retention is the percentage of users who stick with your product, month after month. This is the ability to keep your clients coming back.

It also refers to your customer lifetime value, the longer you can keep a customer, the higher your total revenue.

Sending upsell and cross-sell emails is a good case practice to increase your customer lifetime value from retained customers.

The AARRR metrics to add to your business dashboard at this stage are:

  • Percentage of retained customers
  • Average customer lifespan
  • Customer lifetime value
  • Churn rate

How do you make your customers stick?

Email marketing is among the best strategies to retain your customers.

You could use email courses or webinars to keep your customers engaged. I recommend webinar and email courses because in these cases your customers will be expecting to hear from you.

Also, appreciation and milestone emails help you keep your customers close and make them feel special. Many of the strategies here can also be tweaked and used for activation and acquisition as well. It’s important to be aware of the context of each strategy to make the most of it.

Let’s have a look at a few retention email marketing examples.

Celebrate main events with your customers

Your business anniversary should not be celebrated only by your business. Including your customers in important milestones like this help you enhance your customer relationship.

It is considered customer appreciation as demonstrated in the email below. Don’t be shy about making your customers feel special too.

Promote upcoming webinars

Webinars are among the most successful marketing practices to keep your customers close. It allows marketers to present information in a more digestible format to their audiences.

You can condense a lot of information and value into a relatively short presentation. The more value you present to your customers, the longer they’ll stick around.

Hosting webinars develops trust and authority while providing an environment to interact with your customers. This could help you understand your target audience on a deeper level.

Here is an example of a webinar invitation email that you could send when hosting a webinar.

Promote upcoming webinar retention email AARRR

Referral

Customer referral is the fruit of providing customers with a good solution and a healthy customer relationship.

Word of mouth is trusted more than almost any other form of marketing.

People are 4 times more likely to buy when referred by a friend. Those are the same people who also base their buying decision on online customer reviews.

According to SaaSQuatch, 83% of consumers are willing to refer after a positive experience—yet only 29% actually do.

It is your job to motivate customers to make a referral. mail marketing is a powerful tool to make that happen.

Here are the metrics to track for your referral stage:

  • Net Promoter Score
  • Number of referrals
  • Social media shares
  • Customer reviews

Now let’s check some of the best email campaigns that motivate customer referral.

Reward customer referrals

Giving your customers a reason to forward an email or tell a friend about your business is what motivates customer referrals.

Rewarding a customer referral makes it a win-win deal for you and your customer. Here is an example from Postable offering 5$ for each friend you refer.

AARRR Referral email

The animated GIF is eye-catching which shows you shouldn’t be afraid of adding a bit of energy to your email marketing campaigns.

Create and include unique referral links

Creating a referral link for your customers makes your referral program shareable. They might copy the link to send in direct messages or simply share on social media.

You’re rewarding people for doing the work of finding customers for you which may be more cost effective than other lead generation campaigns you’re running.

Ask for customer reviews and feedback

Here’s an example of how to ask customers to leave you a review for products they recently purchased.

Casper created a dynamic email that auto-populates with the recently purchased product.

The customer can easily leave a review by simply clicking on the blue “Review the sheets” button.

Now you have seen how it is done, and you know how to get users on your team. Now it is time for implementation.

Revenue

Revenue is when you leverage the results of the previous AARRR funnel stages.

It is the stage when your lead decides to purchase your product or service. It could be:

  • Register for a monthly/yearly subscription
  • Sign a contract
  • Placing an order, etc.

To put it in the simplest way, revenue means you get paid.

Many people believe revenue is the last step but in reality, you’re not done with the AARRR metrics framework. There is still a lot more to do.

Email marketing plays a huge role in driving revenue for your business. Let’s see how it is done.

Send cart abandonment emails

Cart abandonment emails affect you as a seller as it reminds the buyer to finish a purchase.

Regardless of the reason why your shopper left the cart in the first place, you have an opportunity to win them back.

Send upgrade emails

Automate upgrade emails to be sent once the trial period is over or a free customer has hit their usage limits.

Dropbox uses urgency to convince its users to upgrade, by telling them their Dropbox is almost full.

If users decide to upgrade, Dropbox will send a follow-up email, confirming and promoting the Pro Yearly Plan upgrade.

Upsell your customers

See how Asana crafts an upsell email Sequence to convince customers to upgrade their account.

Followed by another email sharing move value and benefits when upgrading to premium.

Promote seasonal sales

Every year consumers spend more time and money shopping with brands and through eCommerce marketplaces.

It is no surprise that during holidays, consumers spend more online buying and preparing gifts for their loved ones.

In email marketing, this translates into an opportunity to generate higher revenue. Promoting a seasonal sale could increase your revenue significantly.

AARRR Seasonal sale email

Here is a list of seasonal holiday sales you don’t want to leave behind:

  • Thanksgiving
  • Christmas
  • Valentines day
  • Easter, etc.

Promoting seasonal sales and discounts can only improveyour AARRR metrics:

  • Higher revenue
  • Increase in conversion
  • Higher customer lifetime value
  • Customer lifespan, etc.

Not using the email marketing AARRR funnel is leaving money behind. No business wants to do that.

Conclusion:

There you have it, the AARRR framework mapped out for you, and how to use email marketing as a tool to acquire, convert and retain your customers.

Now it is your move, break down the complexity of your product or service and create the milestones and steps you want your leads to make.

Ask the following question: “What type of email and CTA would push my customer to the next step of the funnel?”

Have one an ultimate goal for each email of your funnel, and always and forever keep an eye on your AARRR metrics.

Lastly, base your marketing and sales decision on actionable data that you have inside your AARRR funnel.

Daniel Ndukwu

Daniel Ndukwu

Daniel Ndukwu is the founder of KyLeads where he helps businesses optimize their lead generation while sending better messages that increase sales. When he's not working, he spends time traveling to as many countries as possible.