To make their app successful, app developers and marketers are constantly bending backward. A metrics buffet is tracked on a daily, weekly and monthly basis to measure the app’s performance and sharpen future promotion strategies. While a lot of attention is applied to the total number of downloads and the overall rating of the app store, the User Lifetime Value or LTV is a much more relevant and definitive indicator that you really should be monitoring.
So what’s LTV and how you can use it to boost the growth of your app. Read on to learn all you need to know about LTV.
What’s LTV about?
App Lifetime Value or LTV is the total revenue produced by the app throughout the time the device is used by the customer. So if a consumer has used your app for a year, the LTV of that consumer would automatically amount to every in-app purchase created or paid product that that user has used.
Why is this so important?
Because a current or returning consumer pays much more than a new user, the reason LTV is such a significant metric. Through changing your growth approach by concentrating heavily on long-term customer engagement, you will increase significantly more sales than you can through focusing all of your marketing efforts on new user acquisition. Tracking and measuring the LTV closely would help you determine where you are in terms of user engagement and successful monetization, thus helping you develop a much better user acquisition plan that focuses on gaining more of the correct users than just more users.
How can I measure LTV?
Measuring LTV is a somewhat more complicated procedure than measuring ARPU (Average User Revenue) or ARPDAU (Average Daily Passive User Revenue). For eg, the three major factors influencing LTV-
Monetization –How much money your users make on the app, whether in the form of in-app purchases, ad impressions or premium subscriptions, is a real transaction.
Retention –After a week, a month or a year of installing your software, how many people actually connect with your device as opposed to those who uninstalled it.
Virality –The number of new customers will be introduced to your device by an existing customer.
That company has a different model of monetization, and for each framework, every other benefit is defined differently. Therefore, the cumulative LTV of each device will be calculated differently.
So how can LTV support you?
Understanding that your LTV software allows you to gain a good understanding of the quality of your device. This allows you to understand how much company each person gives you or each customer’s net value. In many ways, this helps you –
1. Sharpen your plan to attract and maintain your clients
After the addition of customers and that the total number of installs is an essential function of the psychology of the software marketer. Nonetheless, we still overlook that anyone installing the software does not necessarily bring any real income to the app. Knowing each user’s LTV can help you identify the users that are really good for your market. Whether they bring in revenue or they bring new customers or both. These are the users you need at the end of the day.
Understanding LTV helps you to streamline your plan to spend more in the creation and maintenance of’ healthy’ customers and letting go of those who don’t benefit. So instead of spending money on recruiting random users, you can aim, attract, fulfill, and maintain the best users to improve long-term loyalty.
2. Refine the Template of Monetarisation
The evaluation of your LTV also allows you to analyze your strategy of monetization. Do you have a plan in which consumers will pay small yet regular sums of money over a period of time or is the method more of a churn and burn where users pay once in advance and no longer? The latter approach would entail a constant supply of new customers, essentially draining all your marketing dollars into the acquisition of new users. If instead, you use a monetization approach that encourages existing users to continue paying small amounts over a period of time, you will see much more dedication, satisfaction and, of course, sales.
So how can you increase LTV for your users?
This is the big question, isn’t it? Okay, it’s a simple answer. Make them happy once you’ve discovered your high-performance customers. Those who spend money on your app should receive services that are worth their money. Those who don’t spend money yet have to be encouraged to spend more and probably more in the future. Those who are less likely to pay at all, but are nevertheless ardent users, can be used to increase virality and spread the word of mouth, helping to attract more users. Here are a couple of key steps to help you through LTV for your customers.
⦁ Give you a great experience- Make sure you meet the right standards. Customers should get from your device everything they planned. Don’t be over-promising and under-delivering. Make sure that your paid users feel unique and cared for.
⦁ Nail the on-board– FTUE or First Time User Experience is important in determining how the user thinks about the product and whether the app will be sustained. Make sure that your onboarding process makes it very user-friendly, quick and welcoming.
⦁ Have a great policy of reference – Even those users who don’t like charging explicitly will support your product by recommending it to your buddies and adding more customers to you. Give certain consumers the opportunity to become champions for your company.
Bottom Line-
As you can see, LTV is one of the most critical metrics that you need to track and act to ensure that your app generates a steady revenue stream. By focusing on acquiring, engaging and retaining the right users, you can increase your revenue and reduce unproductive channels on marketing costs. What are you doing to keep growing your LTV? Share the comments with us.
Thank you so much for reading!
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