As the marketing manager or owner of a business that is focused on increasing online presence, you know that a mobile app is invaluable! But, to understand whether the app is making useful contributions to your business or startup, you need different key performance indicators.
You will find it easy to capture data in various forms, but the challenge lies in knowing how to use the data. With regard to your mobile app analytics, you need to understand what details need to be tracked and how you can obtain actionable data. One of the most important mobile app analytics metrics that you have to track is the lifetime value (LTV) of a user.
So, what exactly is the LTV of a user and how does the LTV Report help you track this metric effectively for the benefit of your business? Read on to find out.
LTV Concept Overview
The ideal way to track the revenue of your product (a mobile app in this case) is to measure the frequency at which people spend money in your app at specific time intervals. However, the LTV expands this scope beyond just the revenue and gives you an indication of the potential revenue or future earnings that you can obtain from a particular user. So, this metric determines the value of mobile app users on the basis of their actions.
Clearly, LTV serves as a predictive metric that measures the future success of your mobile app.
LTV Report Overview
The LTV Report shows you the value of various users to your business based on their lifetime performance across different channels, such as organic searches, paid searches, and emails. You can use the report to make profitable allocations of your marketing resources to acquire users using the different methods.
You can also easily compare the LTVs of users obtained from different channels to get insights into the channels that bring higher value users.
How Do You View the LTV Data Report?
- Log in to your Google Analytics dashboard.
- Navigate to the view and opt for the Reporting tab.
- Choose “Audience”, followed by “Lifetime Value”, under reporting.
You will then be able to view the LTV Report and will see that the two essential time elements involved are the following:
1. Acquisition Date Range
This element refers to the specific date period during which you acquired users.
Consider the following example: You ran a marketing campaign for your ecommerce site during a special event, such as Black Friday. The date range element will help you get insights into the users acquired during or after this particular marketing campaign.
2. X-Axis in the Graph
The LTV can be a maximum of 90 days, which is indicated on the X-axis in the graph element, in increments of days, weeks or months. The graph denotes the dynamically changing nature of cumulative metric values over the user’s lifetime.
Metrics Available in the LTV Report
The following metrics are available in the report:
- Sessions per user
- App views per user
- Transactions per user
- Revenue per user
- Goal completions per user
- Session durations per user
Process to Calculate the Metrics
The LTV Report represents the cumulative average value per user per time increment (in terms of days, weeks or months). So, if you are measuring a metric like “transactions per user” or “sessions per user”, the report will display one value per day which corresponds to the average number of transactions or sessions per user.
As discussed earlier regarding the two critical elements for LTV, you can calculate the LTV by dividing the cumulative addition of the metric value (“transactions per user” or “sessions per user” in our example) by the total number of users you acquired during the acquisition date range.
Thus, if you acquire 10 users in a day and the metric value is “transactions per user”, you can calculate the metric for the first day as follows:
10 cumulative transactions per day / 10 users = 1 transaction per user
The same metric calculation for the second day will be:
20 cumulative transactions per day / 10 users = 2 transactions per use
You can monitor behavior in terms of sessions, app views, and session durations as well as conversions in terms of goal completions and transactions. And, yes, you can easily examine the revenue generated with this method of calculating the metrics.
You can select the context in which you examine the metric values, using the “Dimensions” value.
For instance, if you are calculating the metric “sessions per user”, it would add more value if you also learn which acquisition channel delivered the highest number of sessions per user. Similarly, the acquisition medium adds more relevance for the metric “revenue per user” to know the medium that acquires the highest average revenue.
Acquisition source is another dimension value that may interest you for particular metrics, such as “app views per user”.
How to Understand the Metrics in the Graphs and Tables?
With the table, the metrics are distributed according to your chosen dimension (channel, medium, source, and so on). The table displays the users you acquired during the acquisition date range, along with additional information about the metric you chose, corresponding to the selected dimension.
For example, if you select the metric to be “app views per user”, it would indicate the average number of app views per user over the lifetime. Additionally, the table will show “app views” which indicates the total number of app views for all the users over the lifetime.
As mentioned before, the graph also shows the LTV per user for the metrics over a maximum period of 90 days. So, you can examine the cumulative metric value at different points of time over the lifetime.
We have seen how the LTV Report adds value in helping you understand user engagement over time - right from the first app install to the time when the user ceases to use your mobile app. It also helps you estimate or predict projected returns on investment and even future retention rates.
We hope that the above information about Google Analytics’ LTV Report and how it helps you evaluate the LTV per user proves useful to your business. Feel free to share your feedback and queries in the comments section below.