In today's world of big data, there is no end of services in the market that help app developers track almost anything and everything. With so much data available and so much to track, it is very easy for app developers to get caught up in tracking vanity metrics. App downloads is one such metric that app developers often get enticed into measuring.
The truth is that anything from a well executed marketing campaign, viral word-of-mouth organic growth or just plain good timing might get a huge spike in app downloads. But that by no means demonstrates the true success of an app. After the initial euphoria dies down, the number of downloads starts to decrease as well.
A truly successful app is one which not only gets people to download it but keeps them coming back!
A good way to measure engagement and loyalty of an app user is tracking their potential lifetime value (LTV). While LTV is a term that can be defined in many different ways and is perhaps overused in the app industry, it is indeed a very important metric that app developers must track.
What is LTV?
In simple terms, LTV is defined as the total value of an app user over time. The conventional definition is the total amount of revenue generated by a user over time. However, the definition of LTV will change depending on the app and does not have to have a monetary aspect to it. LTV essential helps determine how much and for how long a certain user is expected to use an app. Knowing the LTV of your mobile users is crucial as it helps determine who your most loyal and engaged users are from your user base. Knowing the LTV of users and what sort of behavior drives that value helps ensure that app developers have a laser focus on those segments.
How do you define LTV?
LTV is directly correlated with the user's app usage. A user with a high lifetime value indicates that he uses an app frequently and engages in a lot of in-app activities like content consumption, in-app purchases, game levels cleared etc. Conversely, a user with how LTV signifies that he doesn't use the app as much.
The LTV of a user can be defined in a number of ways, depending on an app and its purpose.
Some possible definitions of LTV could be:
- Total amount of revenue generated via in-app purchases. (For an ecommerce app / freemium app).
- Total number of levels cleared in a game. (For a game).
- Total number of articles/pages viewed. (For a news app).
- Frequency of app usage: once a month/multiple times a day etc. (For any app).
App developers can create their own definitions depending on what activity within their app they deem valuable. Whatever the definition, it should be quantifiable.
How can Personagraph help capitalize on the LTV of app users?
Knowing the LTV of mobile users can be invaluable as it can impact the acquisition, engagement and monetization strategy of an app. It helps know who your high value users are (users with high LTVs) so that app developers can decide where to spend their marketing dollars.
With the help of Personagraph's rich user profiles, app developers will know more about their high value users. Once app developers have identified the LTVs of their users, they can segment their high value users and use Personagraph's powerful user understanding platform to learn more about the interests, intents and demographics of those high value users.
Personagraph's rich user profiles can be leveraged to boost the LTV of mobile app users in the following ways:
- Acquire the RIGHT type of users: Analyze the interests, intents and demographics of current users with high LTVs and then run user acquisition campaigns to acquire only those types of users.
- Segment your users better: Create more valuable segments based on the LTV value of users and their corresponding interests and demographics. App developers will now be able see their high value users in a broader light.
- Boost user retention: Run highly targeted interest-based engagement campaigns to engage users with high LTV and to reengage users with low LTV.
- Improve monetization revenue: Serve targeted advertisements and push messages to users with high LTV.