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Unless your app is a viral, monetization can't just be a strategy - it is the primary design criteria. I have a 5 ⭐️ app, 7 Second Meditation, that has fantast
by orasis 10y ago
Unless your app is a viral, monetization can't just be a strategy - it is the primary design criteria.
I have a 5 ⭐️ app, 7 Second Meditation, that has fantastic retention numbers, but I didn't design it around monetization from day 1, so the LTV is too low to do paid user acquisition.
So the app is doomed to putter along on organic installs.
An app must nail both retention and monetization to succeed.
(shameless plug: I did boost the LTV by 45% using https://improve.ai https://improve.ai)
- personjerry 10y agoWhat's LTV? Google says loan to value but that doesn't seem to make sense here?
- ductionist 10y ago"Lifetime Value", the dollar value of a user over the entire time of that user's installation of your app.
- qeternity 10y agoOtherwise known as NPV...
- ABCLAW 10y agoNit: CLTV/CLV/LTV calculations ignore acquisition costs, and are generally used to determine bounds for acquisition costs/investments - They are, however, essentially calculated as the NPV of the customer post-acquisition, which I believe was your point. NPV calculations, used to determine the value of the entire pipeline, include them.
- orasis 10y agoMost people that I know don't discount the time value of money on their LTV calculations so, in practice LTV != NPV. But yes, NPV would provide a more accurate calculation. (Edit: to be clear on definitions, NPV is "Net Present Value")
- ilugaslifg 10y agoWould you mind translating this into english? Even seeing the definition of LTV above, I still don't understand the story your comment is telling. What is "paid user acquisition"? How would a higher "lifetime value per user" enable you to do it? How is your app monetized to arrive at this LTV? What would it imply for you to have "designed it around monetization from day 1", what would be different? Why can't you change it now?
- soccerdave 10y agoIf it costs $2 to acquire a user but your Lifetime Value (LTV) of a user is only $1.50, then you are just spending money you will never earn back.
- orasis 10y agoSomeone downvoted you, but thanks for asking this question - it made me realize I was communicating poorly. Paid user acquisition is spending money, usually on ads, to get people to install your app. The app business is now a ruthless winner-takes-all market and the game is all about spending $3.00 to make $3.05. When you see pervasive ads for Mobile Strike or Game of War it means that these games are doing a better job of monetization than anyone else so they can buy the users and dominate the top spots in the charts. Anyway, to advertise for your app, you're competing with every other advertiser out there with products that earn at least a couple dollars per clicking user. If your app only earns $.15 over the lifetime of the person that clicked, you can't afford to take out ads. As to "Why can't you change it now?" - I haven't figured out a design that would ever allow it to be a high LTV product. So what I do going forward is think very carefully about potential apps through the lens of whether or not they could possibly be high lifetime value. If not, I won't waste my time writing that app. In closing it is a really really damn hard craft to master, but the multi-dimensional aspect of it keeps it fun.
- ilugaslifg 10y agoFantastic answer, thank you.
- Msurrow 10y ago
- deleted 10y ago[deleted]