Sales Funnel
Also known as: Conversion Funnel · AARRR · Pirate Metrics
DEFINITION
The staged progression a prospect moves through: Awareness → Acquisition → Activation → Retention → Revenue → Referral.
In depth
Dave McClure's AARRR (Pirate Metrics) reframes the funnel as five stages. Each stage has its own metric: Acquisition = visits, Activation = signup, Retention = weekly return, Revenue = paid conversion, Referral = invites sent.
Weakest stage determines overall growth. No point optimising the top if the middle leaks.
Related terms
Activation
The moment a new user experiences the product's core value for the first time — the aha moment.
Retention
The opposite of churn — the percentage of customers who stay with you over a given period.
PLG
A go-to-market motion where the product itself is the primary driver of acquisition, activation, and expansion — rather than sales.
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Last reviewed 14 April 2026 by Abhi Verma.