Lifetime Value or LTV offers sustainable revenue growth alongside the power to market your app to a larger audience through multiple mediums like social media, word-of-mouth, email marketing, and many more. It may not be the first metric on your tracking list, but it is the only one differentiating a viral app from a profitable one. Thanks to technologies like Trackier Mobile Marketing Platform, app owners can easily navigate the success rate of their app LTV while also viewing reports about user in-app activity, and acquisition. Hold on! Have you been missing out on this treasure trove of app success? Well, it’s time to take a crash course!
What Do You Understand By Lifetime Value?
The Lifetime Value or LTV mobile apps help brands understand the revenue generated by a user over a period of app usage. It directly foretells the amount of investments a user is comfortable making to improve his/her app experience.
For instance, when a user downloads a gaming app and can only unlock special features or levels if s/he invests in the game. This purchasing behavior adds to the app’s LTV metric.
LTV is a great way to curate your marketing strategies. It enables mobile advertising and optimization while also ensuring higher user retention. Low LTV indicates that users do not want to spend money on your app, indicating a depreciating growth chart for your future endeavors.
How Can An App Owner Calculate The LTV?
- Timeframe: Choose the timeline you want to analyze. It can be monthly, quarterly, or annually.
- Retention Rate: Count the number of users active and dormant during the specified time.
- LTV Metric Setting: Check for all the types of campaigns that can be added to the LTV of the app.
- ARPU: Average Revenue Per User, helps to check the total average revenue generated by each user on the app.
- Customer Lifetime: The average lifespan of an active user is determined by how long they engage with the app campaigns.
LTV = Average Revenue Per User * Customer Lifetime
LTV Vs ROI: What Is The Difference?
Lifetime Value (LTV) and Return on Investment (ROI) are essential metrics to evaluate the performance and profit of mobile apps.
- ROI helps to understand how much money you make from investing a certain amount at the beginning of the campaign. Suppose, an individual spends $200 on a paid ad marketing campaign and it generates $400 revenue in sales, your ROI turns out to be 100% because you successfully doubled your investment in a specified time frame you had set up for yourself.
- LTV figures how much money the customer brings in over the time of being an active customer of the business. It helps create and identify a valuable customer profile for the future endeavors of the company.
Strategies To Boost Customer LTV for Apps
- Easy To Use: The user base approval enhances the revenue of an app. It is best to make sure that the app is easy to navigate and offers all the essential features.
- Personalized Experience: Understanding the user’s behavior helps to tailor the app to the singular interests of each prospect.
- Offers/Referrals: Enable the users to spend more money on the app by adding special features, incentives, or services that are delivered in exchange for value.
- Retention Tactics: It is more important to retain and maintain existing customers than to acquire new users. Repeat purchases, push notifications, loyalty rewards, and reducing time-to-value help with retention.
- Brand Awareness: The right audience should be aware of your app to be able to make purchases. Use social media to connect with users and make them aware of your offerings.
Using LTV To Optimize User Retention Strategy
Lifetime Value (LTV) and Retention are two peas in a pod. In the mobile app industries, they go hand in hand to ensure the successful inning of a mobile app. The longer a user is retained on your mobile app, the higher the chances of them spending money in the app, skyrocketing your LTV
A customer need not spend direct money on the app but might still be a high-value customer granted they share and talk about the app with their friends. To make the user return to the app, optimize your user retention strategy by creating an interactive user experience that offers rewards, loyalty points, and cool features to make the process engaging and appealing. The retention metric should be monitored daily, weekly, and monthly while keeping an eye on the churn rates to create a space for user acquisition.
User acquisition and user-retention are two different sides of the same coin which helps boost the LTV mobile apps. While user acquisition enables the growth of the app LTV, user retention ensures sustainable and long-term revenue generation for the app owners.
Bottom Line
In conclusion, mobile app growth can be identified with the help of various metrics like ROI, LTV, user acquisition, and user retention. While a high LTV is achievable it depends on finding an effective place for your app in the market and identifying with its users.
