Use case: How to get insights from the Cumulative LTV chart

The Cumulative LTV (lifetime value) metric displays dynamic revenue growth for different user segments. The formula depends on the calculation metric you select: ARPU (Average Revenue Per User), ARPPU (Average Revenue Per Paying User), or ARPAS (Average Revenue Per Activated Subscriber):

Cumulative LTV = ARPU/ARPPU/ARPAS * Lifetime

Almost everyone knows that Cumulative LTV measurement is important to subscription businesses. However, we want to emphasize how you can improve your product and marketing strategy: 

• Track the outflow or growth of your customer base and be able to understand their reasons for prioritizing retention efforts. 
• Identify the customer segments that bring in the most and least profit to find areas for improvement in the monetization strategy.
  
• Calculate the amount of investment in the business and its payback period to implement it in the customer acquisition bidding strategy.
  
• Adjust the effectiveness of the loyalty strategy to increase customer lifetime value by improving the product and user experience.
  

Let’s take a look at how this chart works in Apphud.

This is a list with recommendations on how to use the Cumulative LTV chart in Apphud in full force:

• Сompare different cohorts by counting ARPU/ARPPU/ARPAS. We calculate these metrics using proceeds.

• Choose the cohort period: 30, 180, 365 days or your custom range is up to 999 days!

• Segment the output by country, user gender, or age, and even search ad campaigns to identify the best customer segments. 

Apple Search Ads segmentation in the Cumulative LTV chart, Apphud

If you have different subscription types: weekly, monthly, and annual, we recommend analyzing the longest cohort period - 999 days, it allows you to see the big picture.

For a long term of more than 2 years, the annual subscription may remain in the lead due to renewals and a higher price. However, the situation is different for shorter terms, and monthly or weekly paying users can be a larger part of your revenue.

Understanding the most profitable subscription plans is a way to choose a better pricing strategy and improve app performance. That's why Apphud offers the possibility of long-term LTV analysis with a custom range of up to 999 days.

Another practical piece of advice with Cumulative LTV analysis is to generate user acquisition hypotheses from the data you have through continuous segmentation and estimation. Acquire new customers and significantly increase your revenue.

Cumulative LTV metric analysis helps subscription businesses grow by providing insights into customer spending trends, enabling them to make informed decisions about how to acquire and retain customers and decrease the churn rate. It can also help identify areas for improvement in order to increase customer lifetime value and optimize pricing strategies. It can also be used to measure the effectiveness of marketing campaigns and track user engagement over time.

At Apphud, we recognize the significance of subscription analytics for app revenue growth. Hence, we prioritize data precision. Our platform supplies you with the most accurate app revenue data to provide you with growth hypotheses. Sign up for Apphud today!

Nataly

Head of Marketing at Apphud

7+ years in product marketing. Nataly is responsible for marketing strategy development and execution. Committed adherent of the agile methodology.