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What is app user lifetime value and how to increase it?
1. What is App User Lifetime Value and How to Increase It?
Developing a mobile app is only the first (indeed crucial) step to boosting your
business. But have you strategized what happens after people install your app?
Increasing customer lifetime value (LTV) is equally, or perhaps more, important
than driving installations. You sure don’t want people to uninstall the app after
using it once? Then it’s time to focus on boosting user lifetime value.
Not sure what LTV is? No worry. Today, we will discuss the concept of user
lifetime value and explore how to maximize it.
What is User Lifetime Value in a Mobile App?
App user lifetime value denotes the total value of a user for a business. From
paid subscription to referring to other users - everything is included in it. LTV
2. offers a holistic view comprising monetization, shareability, and retention rate.
Let us take a quick look at these:
Sharability - It takes the shareability or virality of the app into account.
You can identify how many users are brought by each user over a specific
period of time.
Retention Rate - It denotes the percentage of people who continue to
use your app over a specific period of time. It also considers how much
time users spend on your app or user engagement.
Monetization - It refers to the amount of money the users spend on an
app over their lifetime or Average Revenue per User (ARPU). For an
eCommerce app, it takes order values into account. Other monetization
methods include PPC campaigns (where the business owner earns money
from the ad owner as the users click on it), paid subscriptions, in-app
purchases, etc.
How to Calculate User Lifetime Value
Here, you have to multiply the average amount of revenue brought by each user
by the time they use your app. Then add the extra value brought in from
referrals. Here is a quick formula:
Average LTV = ARPU x 1/Churn rate + Referral rate
(Churn = 1 - retention rate)
Your aim should be to increase user lifetime value. Below, you will find some
handpicked tips recommended by a renowned app development agency to
boost user lifetime value.
How to Increase User Lifetime Value in a Mobile App
Here, we will elaborate on three components of lifetime value.
1. Sharability
Today, with numerous apps around, people prefer to listen to their peers’
recommendations. Here’re a few ways you can drive more shares.
3. Incentivizing the users to share your app is a great trick. They will do
something to get something in return. For instance, you may offer in-app
bonuses or credits when a user refers a friend through social media.
Offering something unique on the app will automatically compel people
to share your app. Therefore, pay attention to that.
You can also create an illusion of celebrating the users’ activities on your
app. For instance, you may encourage them to share your gaming app
when they cross a hurdle or win a puzzle.
It’s also important to optimize your brand presence on social media. You
can engage digital marketing services to spread brand awareness,
manage brand reputation on different forums, and so on. All these will
lead to evoking a positive impression in people’s minds and drive more
installs. And the more installations your app gets the chances of virality
through the existing user base increase.
Before jumping to the next pointer, let’s quickly mention that you must enable
people to directly share the app from inside the app. For that, it’s important to
integrate popular social media APIs into your app.
2. Retention
The first step to increase retention is to analyze why people delete an app.
Precisely for two reasons:
1. They got a better app to meet their purpose
2. They find the app to be confusing or boring
Focus on these two issues and you can significantly reduce the chunk rate. So,
how to do that? We will explore below.
Improve app onboarding experience. Introduce people to the features of
your app and encourage them to perform some activities to get started.
These may include dragging a feature, swiping through something, and so
on.
Make sure your app is intuitive enough so that people can easily
understand which button or feature functions in which manner. The sign-
4. up process should not be long or tedious. Encourage one-tap login with
email/social media account or phone number.
The sign-up process should not be long or tedious. Encourage one-tap
login with email/social media account or phone number.
Keep data fields to the minimum. Make sure that the users need not fill a
lengthy form. If yours is an eCommerce app, ensure that the checkout
process is fast. Also, let the users save their card/connect with their UPI
app as their preferred payment model for future shopping. It will save
time and effort.
Equip your app with all the essential features required to execute an
activity in your specific niche. If required, check your competitors’ apps.
It’s better to provide some more features in your app than your
competitors. That way, it will stand out among the rest. For instance, if
yours is a chatting app, consider why people will use it instead of
WhatsApp or Telegram? What extra features can you provide?
A/B testing is a great way to find out which elements are preferred to the
users. Optimize your app accordingly.
Engage maintenance services in a consistent manner so as to keep your
app glitch-free and high-functioning at all times.
3. Monetization
Some of the proven ways to monetize your app include:
Leverage push notification to encourage people to interact with your app
and convert. For that, you need to send personalized push notifications to
the users. You can track geo-locations of the users, their
browsing/purchase history, and wishlist to customize the notification
message.
No matter how alluring it seems, always feature native ads on your mobile
app. For instance, if yours is a food delivery app, featuring an ad of a
bakery is a smart step. Native ads will not irritate people and these may
even encourage them to click. That way, you can earn from the ad owner.
5. Instead of encouraging people to purchase the app while installing it from
the app store, it’s better to rely on in-app purchases. With so many apps
available in the market, people may not be interested to purchase an app.
On the contrary, as they get addicted to the app, they may want to unlock
other features (say, earning virtual coins or lives, or unlocking some tracks)
via in-app purchase. This is closely connected with purchasing the
premium version of the app that offers more features.
By adopting these strategies you can significantly increase user lifetime value in
your mobile app. Try these and share your thoughts with us.
Resource: https://webguru-infosystems.blogspot.com/2021/12/app-user-lifetime-value.html
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WebGuru Infosystems
Y8, Block-EP, Sector V, Salt Lake
Kolkata-700091, India
Website: https://www.webguru-india.com/
Email: enquiry@webguru-india.com
Phone: +91-8420197208
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