Customer Lifetime Value (of a user) often abbreviated as (LTV) is a vital metric that helps you calculate the probability of the success of an app over time.

LTV is an indicator of the real value of the client over time. It measures what your business stands to gain from a customer in terms of profit or loss from the time they sign up, to the time of termination of the relationship. Having LTV metrics means that businesses understand their best clients better and can set realistic budgets, revenue and growth expectations for their app development.

With this in mind, Dot Com Infoway, one of the industry leaders in the mobile app marketing vertical, has come up with recommendations and strategies that app developers can use to measure and take advantage of LTV metrics in order grow their app base and subsequently, increase their profits .

Why is this metric getting so much hype?

With more apps flooding the Android, and iOS platforms, the competition has never been stiffer. The app that will stand the test of time and prove successful and profitable is one that strategizes for long-term success through measuring and improving LTV.

While there has been an exponential growth in mobile apps, as in all things, the Pareto Principle applies to mobile apps. Measuring LTV helps developers to formulate and focus marketing plans and budgets on highly profitable clients (20%) that offer a better ROI rather than the low-value customers (80%).

How to Leverage the power of LTV

The first step in the development of an effective marketing strategy is the accurate measurement of LTV. Once you have the metrics, you can focus on enhancing customer value through the development of Internet marketing strategies which target low-value users for higher ratings, and retain high-value users for better ROI.

DCI, one of the world’s top digital marketing companies, has conducted extensive research on this trend and has presented its findings in an infographic that helps developers understand LTV – the single most important metric that determines the success of an app.

life time value of app users

Source: Dot Com Infoway