The last part, startup metrics, is the topic that Dave covered in his talk.  He started giving this talk a couple of years ago.. and he calls it: Startup Metrics for Pirates: AARRR!! (Startup Metrics for Product Marketing & Product Management). You can see his SlideShare presentation here.  AARRR is an acronym that stands for:

Acquisition: users come to Web site from various channels
Activation: users enjoy 1st visit and have a “happy” experience
Retention: users come back , visit site multiple times
Referral: users like product enough to refer others
Revenue: users conduct some monetization behavior

I’m not going to regurgitate his entire presentation in this article.  Dave presents a lot of interesting ideas and tools that companies should use, but I’m here to get specific about Measuring What’s in the Middle.  As Dave puts it, that’s the good stuff, referring to what’s in the middle, Activation, Retention and Referral.

Caveman Metrics – Ugh.

If you’re an entrepreneur or have ever been involved in an online marketing campaign, one of the first questions you ask yourself (or get asked) is, How do drive millions of people to our site? That’s acquisition.  There are many ways to obtain traffic, from paid advertising campaigns, promotional offers, getting online press, as well as a host of sinister methods.  Recently, a strong emphasis has been placed on building traffic through social networks, such as Twitter, Facebook and MySpace.  So, lets just imagine you plan on doing all of these above — paid advertising, SEO for organic result boosts on search results, blogging, Twittering, promotional giveaways, the whole nine yards.

What do you do next?  Naturally, you log into Google Analytics, Web Trends, or look at your Webalyzer reports and say, “Wow, look! Last week we had 3,000 visits to our site, and 2,900 were uniques!” You take a look at your subscription/signup stats, and say, “Whoah, dang. In that same period we had only 12 account registrations and 3 inquiries.”

With out-of-the-box Web measurement tools, that’s pretty much what you get.  Search keyword referrals (how people found your site), ad campaign CTR (click-thru rate), visitors/uniques, day/time graphs, and so on.  They look really cool, but what are they really telling you that’s valuable?  This is what I call caveman metrics.  You take a cursory head-count of visitors coming in, and take a look at the bottom line of how many signed up.

Pirate Metrics – Aarrr!

Be very specific about what you’re measuring.  Within the activation, retention and referral categories, define goals for which you can measure conversion (success).  For instance, create a metric for a “happy first visit” — such as spending X time on the site, and performing Y actions.  Another metric could be the measure of sign-ups for a specific feature within the site that you’re trying to push the user to, such as signing up for a free widget, newsletter, etc.  Only with specific goals and measures can you tweak and re-measure with any level of confidence that you’re steering user behavior in the right direction.

Revolving Door or Turn-Style

Depending on how well you tune your internal Web strategy, your site can resemble a revolving door or a turn-style.  A revolving door meaning that people walk into the roating glass cylinder and exit before they even step into your establishment.  Or your Web site can resemble a series of turn-styles where you strategically lead them into actions for which they pass through (and are counted) with the expectation that they’re moving forward and getting some value/benefit out of the experience.

When you visit a Web site (even one that you traverse often), take notice of how this site leads you to actions.  That’s not by accident.  It was designed to lead you there.  When you visit a new site that is a complete turn off, or just doesn’t engage you into action, also take notice.  Those are every day examples of turn-style vs. revolving door experiences.

Conclusion: The Fundamentals Apply

There really is no short cut, no silver bullet.  Tools exist that can help you measure more effectively and efficiently, but these tools do not know your business.. they do not know your goals.  Only you know what those goals are.   The point of this article: go beyond basic metrics (i.e. WebTrends, Google Analyitics, Webalyzer, etc.) because alone, they do not tell you anything about your Web site strategy.  Get specific about the user segments that are visiting your site, and what you want each of these segments to do so that they’re happy, they come back for more, and they refer their peers to your Web site.  Keep tuning your site strategy so that you continually increase those results, and reap the plunder… aarrr!

Of course, I’m not doing Dave’s presentation/content justice.  He speaks at meetups/conferences often, and I highly recommend seeing him because his lessons are easy to digest and immediately applicable.  Here’s a video from a couple years back of Dave McClure giving a turbo presentation.  The content of his presentations today is very similar, which in my opinion, speaks volumes.