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Lifetime Value (LTV) Defined

Lifetime value, or LTV, is a metric used to estimate the average revenue a user or customer will generate over the course of the total time they spend using your app, product, or service. 

LTV is a vital metric within mobile marketing that synthesizes historical purchase data into a singular number, effectively quantifying user value. Mobile marketers use LTV to determine how much money to allocate towards user acquisition, unlocking detailed and profit-driven optimizations for in-app purchases and in-app advertising.

Measuring LTV can directly improve acquisition forecasting, boost retention, drive repeat purchases, and help you target high-quality users who drive the most revenue to your app.

OneSignal leverages deep user segmentation and customizable push notification flows to focus your mobile marketing strategy on the users most likely to boost your ROI.

How to Use it in a Sentence

A high average LTV is a key growth indicator and signifies a loyal user base.

Common LTV FAQs

While there is no industry standard for calculating app LTV, there are three primary ways to calculate LTV:

1. Average monthly revenue per customer x Customer lifetime (in months)

2. Average monthly revenue per customer / Monthly churn

3. Average order value x Number of repeat sales x Average retention time (in months)

LTV examines the value of a user over the entire lifetime of activity using your app. ARPU, or average revenue per user, measures the value of a user over a defined timeframe.

There are several ways to improve LTV, all of which revolve around enhancing your app’s user experience and engagement. User segmentation, push notification personalization, deep linking, and highlighting feature convenience are all proven ways to increase LTV.