Over the past decade, the user acquisition cost has risen by 222% with brands losing on average $29 for every new customer acquired. Most of the cost of new user acquisition is borne by the first sale, thereby putting pressure on driving repeat sales for profitability.
That’s why app marketers shouldn’t underestimate the importance of LTV in marketing. It is the driving force behind profit margins, reduced costs, and sustainability.
In this post, we will share everything you need to know about customer lifetime value and practical tips to boost your mobile app LTV.
What Is Lifetime Value (LTV)?
In the mobile app world, LTV, full form in marketing lifetime value, represents the average net profit an app owner or marketer makes over the lifespan of an app user. At times LTV in marketing (also called CLV, full form customer lifetime value) helps understand the revenue generated from a single user in relation to the value of acquisition costs paid by marketers to acquire new users.
LTV or CLV is different from ARPU (Average Revenue Per User) which measures the average revenue for a single user at a given time (not lifetime). The metric is the cornerstone of retention marketing that focuses on nurturing relationships with existing app users.
LTV Marketing Formula: The customer lifetime value for mobile users can be calculated using the following methods –
What’s the Obsession with Measuring LTV?
Let’s first understand what happens when you create and invest in marketing a mobile app.
With each ad campaign, you hope to see a tangible return on the initial investment. However, you also aim to attract high-intent users who will install the app and subscribe or engage in repeat in-app purchases.
In such a case, metrics like retention rate and cost per lead do not say much about how long the user is sticking around or buying.
That’s where customer lifetime value comes into play. It helps you calculate the long-term return on investment, measuring the campaign impact on gaining and retaining long-term buyers.
App installs don’t always result in conversions like in-app subscriptions or repeat purchases. Calculating the LTV in marketing can help you spot your loyal user base which can be targeted through referral campaigns or loyalty programs.
6 Foolproof Methods to Improve Your App’s Customer LTV
By focusing on strategies that enhance user engagement and retention, you can create a loyal user base for your app while boosting profitability. Here are 6 actionable ways to elevate your app’s LTV effectively.
1. Use LTV Strategically
Tracking customer lifetime value can help mobile marketers make smart decisions on where to invest.
First, use the metric as a benchmark to study if users are spending more, sticking with the app, or increasing/decreasing their purchase frequency. At an individual user level, this metric can help in identifying the customers who deserve more attention.
LTV can be applied to specific channels to identify the most effective one among search, email, ads, or social. This will help you wisely allocate resources to reap high returns.
Next, to improve the LTV, work on the other metrics that influence it. For instance, if you implement strategies to increase the average order value (AOV), it will improve the LTV over time.
2. Level Up Your Deep Linking Game
Research by Criteo suggests that mobile apps are far more effective in closing a deal than mobile web. Users viewing products per session on apps are 3-4 times more likely to convert than on the mobile web.
Hence, having a sound deep linking strategy in place will prompt users to download your app from their app store. If they already have the app, it will take them straight to the relevant page on the app. This will lead to improved engagement and a seamless transition to app-exclusive features.
A seamless deep-linking experience ensures users find what they looking for, reducing churn, increasing LTV, and boosting overall revenue. Deep links with a mobile measurement partner can ensure enhanced user experience and optimize your marketing efforts.
3. Work on User Experience
Improving the user experience of your app is key to boosting customer lifetime value. A seamless and intuitive design not only enhances user engagement but also fosters long-term loyalty.
Optimize your app’s navigation to ensure users can easily find features and information. Conduct surveys and collect reviews to identify their pain points and address them with updates.
For instance, if app speed is the issue, work on reducing the load time and improving your app’s stability. Similarly, if there’s a technical glitch in the in-app navigation, work on that.
Deliver tailored recommendations, notifications, and deals by leveraging user data. Gamify in-app experiences to engage loyal users. Focusing on these elements can help you boost your app’s UX and build a strong foundation for retaining users and improving LTV.
4. Encourage Social Sharing
Virality is a key aspect of customer lifetime value as it is an indicator of your app’s performance and social acceptance. It is the number of new users each existing user gets to subscribe during their usage cycle.
Statista confirms that people spend 143 minutes per day on social channels. Social has a wide-reaching and significant impact on people’s online and offline activities.
Therefore, it is important to maintain a strong social presence that allows you to be where your potential and existing customers are. You can share promotional offers and create new engagement opportunities in the social space where your brand message can spread like wildfire.
5. Go for Omnichannel Messaging
Cross-device and cross-channel shopping behavior has grown remarkably in the last few years. 60% of shoppers use several devices along their shopping journey. For instance, users often start their journey on the smartphone and complete it on another device like their personal computer or tablet.
What’s more? Omnichannel customers tend to spend 30% more than single-channel shoppers.
Therefore, to gain a unified view of the customer and leverage their potential, marketers must be active on multiple channels. Omnichannel messaging allows marketers to reach customers where they are and personalize their marketing efforts based on the demography. It also allows them to engage their audience in real-time.
Leveraging relevant tools for omnichannel messaging you can segment, automate, and analyze the campaign and significantly increase the LTV.
Here are a few quick pointers to get you started.
- Understand Your Audience
Study users’ behavior across channels and leverage analytics to identify buyer preferences and create personalized messages tailored to each segment. - Create Seamless Cross-Channel Experiences
Ensure consistent messaging and transitions across platforms. Use push notifications, SMS, email, and in-app messaging to deliver cohesive experiences. - Leverage Automation
Automate brand messages based on user behavior triggers like abandoned carts or onboarding progress. This will help in maintaining engagement and boosting retention. - Personalize Content
Insights from user data can be used to tailor content and share relevant product recommendations or offers. These must reflect individual preferences and previous interactions. - Optimize for Each Channel
Adapt your brand message formats and styles for the strengths of each channel. For instance, the copy for push notifications should be short and compelling while for emails it should be a detailed narrative. - Test, Analyze, Iterate
Test your campaigns on different channels, analyze the relevant performance metrics, and optimize your strategy to enhance reach and engagement. - Integrate Feedback Mechanisms
Encourage users to share feedback across channels. This will help in improving the overall customer experience and refining messaging on all the channels.
6. Prioritize Re-engagement Strategies
Research reveals that acquiring a new customer costs 5 to 25 times more than re-engaging and retaining an existing customer. Thus, getting users to download your app will not impact your revenue if you fail to have an ironclad retention strategy that re-engages inactive and dormant users.
The longer users stick around your app the more money they are likely to spend through in-app purchases and subscriptions. Hence, investing in re-engagement campaigns on email, social, SMS, and paid ad platforms can get them active and improve LTV.
Create meaningful content that aligns with their interests and your app’s purpose. This will set you apart from the competition, preventing them from hopping between other applications, social channels, and websites. User-generated content is one of most effective ways to scale your content creation. Often, users don’t want to hear brand messages, they want to learn what other shoppers have been up to and about their experiences.
Lastly, build a community to create a space where people can connect. Incentivize them to participate by offering exclusive content, deals, and early access to the new app features. Such a sense of community and exclusivity can scale a user base of like-minded people who are willing to stay with your app and contribute to high LTV.
With Apptrove by your side, you can accurately measure the campaign performance. The platform offers granular insights that allow mobile marketers to understand the real impact of their marketing efforts.
Moreover, with all your data from multiple sources centralized on a single customizable platform, your team can effortlessly track user growth and cohort performance and come up with a thorough LTV analysis. For instance, Apptrove’s granular filters allow you to segment your user base as per their intent, app behavior, and preferred mode of communication. Such contextual experiences can drive high LTV.
To learn how Apptrove can partner with you in measuring your app’s success, talk to our team now.
Summing Up
Maximizing customer lifetime value is key to your app’s success in 2025 and beyond. By prioritizing personalized experiences, strategic data utilization, and user engagement-centric tactics, you can foster deeper engagement and long-term loyalty, thus driving sustainable revenue growth for your app. Count on Apptrove as you set out on your journey to transform your app into a profitability powerhouse. Sign up for a free trial to see how Apptrove integrates into your workflows and unlocks power-packed insights.
