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Guide

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Guide

The Five Stages of Reducing Mobile Customer Churn

Retention is a top priority for mobile marketers. Our new five-step framework is here to help you improve your existing strategy.

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Guide

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Guide

2020 Mobile App Engagement Benchmark Report

Apptentive’s annual mobile app engagement benchmark report serves as a baseline to help app publishers across categories understand their app’s engagement strengths and areas for improvement.

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We tailor each demo to your specific business needs. See it for yourself and contact us today!

Thanks for reaching out! While you wait for confirmation from an Apptentive team member, you may find these free resources to be of interest:

Guide

View resource

Guide

The Five Stages of Reducing Mobile Customer Churn

Retention is a top priority for mobile marketers. Our new five-step framework is here to help you improve your existing strategy.

Download Now

Guide

View resource

Guide

2020 Mobile App Engagement Benchmark Report

Apptentive’s annual mobile app engagement benchmark report serves as a baseline to help app publishers across categories understand their app’s engagement strengths and areas for improvement.

Download Now

Loyalty & Retention

Mobile Customer Lifetime Value, Demystified

Ashley Sefferman  //  September 30, 2015  //  2 min read

Does a low cost per install (CPI) mean you should pour all your marketing dollars into paid acquisition? Does a high average revenue per user (ARPU) mean your app’s sitting pretty in the black?

The answer to either question is an unequivocal no.

When evaluating the health of their mobile apps, many marketers automatically turn toward ARPU and CPI. But while it may be common practice, relying on these two metrics alone provides just one side of the picture. What’s missing is a holistic understanding of the customer.

This understanding boils down to a single metric, known in the retail world as Customer Lifetime Value (CLTV, or just LTV). Lifetime value is a simple yet powerful heuristic for assigning a dollar value to both the tangible and intangible value a customer contributes to the health of your mobile app over the duration of their time with your app (‘lifetime’).

In our new guide, we break down mobile customer lifetime value into its three parts and provide tips and best practices for calculating each component. In wrapping up, we bring everything back together in the form of one very meaningful metric to be used against the cost of customer acquisition (CAC) as a way to gauge the return on your marketing investment.

Screen Shot 2015-08-17 at 11.53.07 AM

What is LTV and why does it matter?

Customer lifetime value can be broken down into three categories of variables:

1. Monetization—The monetary contribution each customer provides to your mobile revenue (in the form of ad impressions/clicks, user-generated content, subscriptions, in-app transactions, or whatever drives your business).

2. Retention—The level of engagement and loyalty a customer exhibits with your app, looking particularly at the length of the average customer lifecycle.

3. Virality—The sum monetary value of additional downloads a customer will refer to your app.

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While there are several different ways of further breaking down these variables (and indeed, each business defines Monetization, Retention, and Virality differently), we’d recommend using the following model as a starting point for turning these variables into a concrete formula:

Screen Shot 2015-09-29 at 2.20.09 PM

Of course, adding more variables to a formula doesn’t make it any simpler to comprehend, but rest assured we’ll deconstruct each component throughout the remainder of the guide.

Take the mystery out of LTV

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 1.3M+ other apps competing for your customers and revenues.

Start calculating LTV the right way by downloading your free copy of our new guide now!

About Ashley Sefferman

Ashley Sefferman is Head of Content at Apptentive. A digital communication and content strategy enthusiast, she writes about multichannel engagement strategies, customer communication, and making the digital world a better place for people. Follow Ashley on Twitter at @ashseff.
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