Lifetime Value (LTV) is what drives your app marketing budget. It tells you how much each new user is worth – and how much you should pay to acquire that user. If you want your business to acquire and retain highly valuable customers, it’s essential to learn what the mobile user or customer lifetime value is and optimizing it. One of the most powerful metrics in the app marketing toolbox.
3 Important Variables of Mobile User Lifetime Value
Monetization
The monetary contribution each customer provides to your mobile revenue (in the form of ad impressions/clicks, subscriptions or in-app transactions).
Retention
The level of engagement and loyalty a customer exhibits with your app, looking particularly at the length of the average customer lifecycle.
Virality
The sum monetary value of additional downloads a customer will refer to your app through their social group beyond the last click attribution.
There’s No Industry-Standard LTV Calculation.
Success in the app business often comes down to knowing your numbers—and a firm grasp of customer lifetime value is what will ultimately differentiate your app from the sea of millions of other apps competing for your customers and revenues.
With the varying approaches to LTV, there’s one component that remains consistent across all formulas — the reliance on post-install data (retention, virality, and monetization).
We find best results in setting up a larger attribution window post-install. Placing an event further down the mobile users journey, preferably one that results in revenue for your app. You can then compare your spend on user acquisition by the revenue generate further down the cycle.
Whichever formula of calculating LTV you choose, make sure that you stick to a single method for consistent and accurate results.
