The Product Analytics Playbook: AARRR, HEART, Cohorts & Funnels for PMs
4 new posts. A hands-on guide with explanations, best practices, and case studies, including Google, Netflix, and Substack.
Hey, Paweł here. Welcome to the free edition of The Product Compass Newsletter!
Every week, I share actionable insights and resources for PMs. Here’s what you might have recently missed:
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Today, instead of one, we cover four topics, all related to product analytics.
I didn’t send these as separate emails to respect your inbox, but you can find them all below:
You can also find them in the Glossary section in the top navigation.
The other four parts of The Product Analytics Playbook published before:
Here’s a quick overview, with links to each post:
1. AARRR (Pirate) Metrics: The 5-Stage Framework for Growth
AARRR, also known as Pirate Metrics, stands for Acquisition, Activation, Retention, Revenue, and Referral. It’s a simple framework that can help you improve your growth funnel.
In this post, we break down each stage and how to optimize it with SaaS metrics examples:
Acquisition
Activation
Retention
Revenue
Referral
2. The Google HEART Framework: Your Guide to Measuring User-Centric Success
In product-led growth, user experience is key. But how do you measure something as subjective as “user satisfaction”?
Google’s HEART framework can help. HEART stands for Happiness, Engagement, Adoption, Retention, and Task Success. It’s a simple way to track your product's user experience (UX).
In this post, we cover definitions, best practices, and a Google Maps case study:
Happiness
Engagement
Adoption
Retention
Task Success
Case Study: Google’s Heart Framework for Google Maps
How to Implement the HEART Framework (3 Steps)
3. Cohort Analysis 101: How to Reduce Churn and Make Better Product Decisions
Cohort analysis is a powerful way to group users based on shared traits or behaviors and see how those groups behave over time.
In this post, we cover definitions, best practices, and a Netflix case study:
What Is Cohort Analysis?
Two Types of Cohorts a PM Should Know
Netflix Case Study: The “Hooked Episode”
How to Run a Cohort Analysis in Product Management
Cohort Analysis for The Product Compass Newsletter
Four Best Practices
4. Funnel Analysis 101: How to Track and Optimize Your User Journey
Funnel analysis is a powerful method to visualize each step a user takes on the path to a desired outcome, such as making a purchase or signing up for a subscription.
By mapping out these steps, you can identify where users drop off, understand why it happens, and experiment to improve conversions.
In this post, we cover definitions, examples, best practices, and a Netflix example:
What Is Funnel Analysis?
Key Metrics to Measure
Netflix Funnel Analysis Example
Five Tips for Effective Funnel Analysis in Product Management
The Other Four Parts of The Product Analytics Playbook Published Before
Are You Tracking the Right Metrics?
What happens when we’re tracking the wrong thing? What happens when we misinterpret the data or rely on too little data to make the right decisions?
Using data to make decisions sounds easy, but it’s not, and there’s a considerable nuance you need to account for. And it starts with understanding what makes a good metric (...)
The North Star Framework 101
The North Star Metric is an extremely simple, powerful concept. But it's largely misunderstood.
The term has been popularized by Sean Ellis. Sean is also known for coining "growth hacking" while being a growth marketer at Dropbox. In his talks, Sean often points out a recurring issue in product management (...)
The Ultimate List of Product Metrics
The classification below is based primarily on the AARRR. I added two categories:
- Engagement Metrics: I want to emphasize the distinct metrics focusing on user interaction with the product.
- Lean and Agile Metrics: Metrics related to the effectiveness of delivering value. Some of them, like Time to Market (TTM) or Time to Learn (TTL), are essential (...)
A/B Testing 101 + Examples
A/B testing is one of the most powerful tools product teams can use to improve their products continuously. When used correctly, A/B testing can transform:
- Experimenting with new product ideas
- Improving user flows and the onboarding process
- Choosing the right product messaging (e.g., landing pages, emails)
- Optimizing the AARRR funnel (e.g., bounce rate, conversion, CAC, revenue) (...)
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Have a fantastic weekend and a fabulous week ahead,
Paweł
Great breakdown of the AARRR framework! Having a structured approach to product analytics is key to making informed decisions—really insightful read.