Growth analytics is the activity of analyzing data pertaining to user acquisition, conversions, retention, and sales in order to assess performance in relation to business objectives, establish critical indicators for assessing growth and discover attributes that lead to profitability.

Similarly, growth metrics are essential metrics that indicate whether or not your product is performing well in the market.

• Acquisition — # of users coming to your product. This could be on any page - home page, category page, product page.
• Activation — # of users doing meaningful action(s). For eCommerce, this could be searching a product, or visiting a product page. For social media, this could be adding friends. For SaaS, it could be subscribing to a free trial.
• Retention — Does the user come back again?
• Revenue — Revenue is a synonym for conversion. Revenue can come through multiple ways: product purchases, subscriptions, in-app purchases, ads.
• Referral — Is the existing user bringing in new users? We already know that referral is an acquisition channel, so why offer it a separate category in this framework? The only route that can lead to exponential growth, (scales non-linearly), is share/referral. It is very different from other channels of acquisition.

AARRR Framework - Deeper Dive:

1. Acquisition — “Where Are Our Users / Customers Coming From?”

   Acquisition - the first A in the AARRR structure outlines how people find you and eventually become customers. You should track each stage of your client's journey through the funnel, not simply the ultimate conversion to a paying customer. Every micro-conversion along the route is significant.

2. Activation — “How good is the user’s / customer’s first experience?”

   The initial interaction your user has with your product is referred to as activation. It's not enough to persuade users to download and/or sign up for your app if they're going to abandon it immediately.

   That is why it is critical to bring your user to the "Aha Moment" or the first time the user sees the true value in your product, as soon as possible so that he or she returns. In an essence, activation is the time between when a person joins up and when he exclaims, "Holy cow, I love this."

3. Retention — “How many of your customers are you retaining and why are you losing the others?”

   Retention means people regularly come back to use your product. For an app, this implies that users return and open/use the app on a regular basis. For a SaaS company, this implies that users who have subscribed to your product continue to use it and stay subscribed.

4. Referral — “How can you turn your customers into your advocates?”

   The most effective approach to drive growth is through referral. Why would you spend enormous sums of money on new customer acquisition always when you can simply have users that trust and rave about your products to their contacts?

5. Revenue — “How can you increase revenue?”

   If you've already optimized using the four AARR criteria, revenue should be pouring in smoothly. And, regardless of what anyone says you, revenue and working out a monetization strategy are critical for any business.

   Even Facebook and Instagram, which began as simply social, non-monetary platforms, are only profitable now because of the massive advertising business behind them.