In 2023, app growth marketers have recognized the importance of prioritizing activation over acquisition for consistent mobile app growth. While many people are superstitious about the AARRR model and apply it to all marketing scenarios, the truth is that activation is crucial for sustained growth.

Why Activation Matters More Than Acquisition

When it comes to user acquisition (UA), many firms and marketing managers exhibit siloed thinking and prioritize acquisition over other important factors. This often leads to the "Leaky Bucket" problem, where the flat or declining user growth curve of a mobile app is caused by product issues rather than acquisition strategies.

While the AARRR model (Acquisition, Activation, Retention, Revenue, and Referral) focuses on user engagement with mobile apps, it fails to emphasize the importance of prioritizing tasks for business success. Overemphasizing acquisition can result in the leaking bucket issue, where users are not retained or engaged effectively.

The Full Funnel Approach to Mobile App Growth

When it comes to mobile app growth strategy, the Full-Funnel Approach is recommended. This approach involves analyzing the user experience using available data to determine the app's scalability and identify activation, engagement, or monetization issues.

1. For a functional app with a positive user experience, scaling can be considered based on the Lifetime Value to Cost Per Install (LTV to CPI) ratio and the size of the addressable market.
2. For apps experiencing activation, engagement, or monetization problems, these issues must be addressed before investing in user acquisition.

Scenario 1: Scaling a Robust App

If the app has strong metrics and a scalable business model, the focus should be on the LTV to CPI ratio and the size of the addressable market. Different stages of user acquisition include high CAC at the launch phase, low CAC during the learning phase, and increasing CAC due to user attrition.

The emphasis on product depends on the size of the overall addressable market. Specialized apps may attract more engaged users but have a smaller potential user base, while apps with broad appeal compete for a larger audience but with lower engagement and willingness to pay.

Scenario 2: Addressing Activation Issues

For apps experiencing activation issues, the focus should be on improving conversion rates and ensuring users understand the value of the product. Without effective activation, retention, referral, and revenue become nearly impossible.

Retention optimization should be approached gradually, focusing on fixing Day 1, Day 3, and Day 7 retention issues. Engaging users at a high rate increases the chances of successful monetization in the mobile sector.

Reordering the Pirate Metrics

Based on my experience as a marketer, I believe that activation should be the CEO's priority and the focus should be on retaining and engaging users. While acquisition is important, it should come after activation for the maximum return on investment. Spending wisely on acquisition strategies like ASO, cross-promotion, and features can help expand the user base while optimizing the product.

Conclusion

The Full-Funnel approach and prioritizing activation over acquisition can lead to significant improvements in user retention and related metrics. By focusing on activation and retention, businesses can turn users into dedicated followers and achieve long-term success. While acquisition is necessary, it should come after activation for a cost-effective and sustainable mobile app growth strategy.

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