Simple Hack to Know Life Time Value of an App

How long do most people use Netflix, Headspace, or Tinder Plus?

Ever wondered

Here’s a trick to guess how long users stick with a software product:

• Headspace: $12.99/mo vs $69.99/yr. A ratio of 5.39, so their monthly users likely stay around for ~4 months.
• Calm: $14.99/mo vs $69.99/yr. A ratio of 4.67, so their monthly users likely stay around for ~3–4 months.
• Tinder Plus (Dating): Annual Plan $32.04 / Monthly plan $7.99 = ratio of 4.01, so users are probably around for 3 months

Netflix doesn’t offer a yearly plan because most users stick around for over 12 months. Spotify is the same.

So to increase the (Life Time Value) LTV Netflix & Spotify offer bundling — family pack, 3 peeps watch together, party plan, etc

Here’s the trick:

If your users stay for an average of four months, price your yearly plan at the cost of five months. This can increase your LTV by 25%

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