User Lifetime Value (LTV) is the measure of a user’s value over a period of time. LTV is one of the most important mobile app metrics to track because it will help you reevaluate your acquisition strategy and estimate marketing costs based on the profitability of your app.
There are several factors that influence LTV such as app referrals or the revenue for ads and in-app purchases. Even if a user doesn’t spend money on in-app purchases for example, they may still be valuable if they shared your app with a friend. For this reason, LTV is a much more complex metric to track than simply measuring the average revenue per user (ARPU). This metric provides insight on what stage of the user lifecycle users bring the most value. You’ll be able to use LTV data to optimize marketing campaigns in order to target high-value users.
Leveraging LTV
Apps that perform well in the app market can make millions of dollars, but most fail to even turn a profit. A key difference is that app marketers that launch successful apps understand the value of each user. Gathering this data will help you focus in on enhancing specific areas where users provide the most value. For example, if you’re seeing that virality is low, try integrating social buttons within your app to encourage users to easily share it with their friends.
In our last post, we discussed the key mobile app metrics you should be tracking to boost performance. We stated that LTV is…
