As an app owner in 2015 one of the most important ways to measure the success of your app is by the value it provides to its users, and how that value is then translated into ROI. In saying this however, it is important to note that attempting to measure ‘value’ can be difficult because every app is unique and every app marketer calculates value differently.
At Localytics, we are excited to share some updates we’ve made to help you accurately measure user value in your app. The new ARPU and ARPPU metrics in the Lifetime Value (LTV) section of the Localytics Dashboard will help you map user actions against overall user value.
When it comes to measuring revenue, a common mistake people make is only considering customers who are actively spending inside the app. However, given the potential that every user has to become a valuable revenue-generating member of your app community, only considering the users currently spending money is not in the best interest for your long-term mobile app strategy.
To help you count all users, we’ve introduced Cumulative Revenue per User which takes into account the interaction you have with every user in your app, not just the ones spending money. This means that all users will be accounted for whenever their device has a session, regardless of whether or not they contributed revenue during that session.
When it comes to investigating dollars spent in your app, some key metrics to take a look at are Average Revenue per User (ARPU) and Average Revenue per Paying User (ARPPU). Starting today, Localytics customers can find both of these metrics in the LTV section of the dashboard.
With Average Revenue per User you can see the amount of revenue the average user has generated in your app for a given time period. ARPU is a very useful metric for taking the temperature of your app business and understanding the resources you need to achieve your app’s business goals.
Generally speaking, if ARPU is low, more users are required to boost revenue whereas if your app has a relatively high ARPU you could potentially see a sustainable ROI with a lower total number of users.
Once marketers have established the ARPU for their app they can do a combination of two things to drive more revenue for their app business:
Focus efforts on smarter user acquisition by optimizing ad dollars to acquire more valuable users
Build better relationships with current users through personalized messaging to drive more value from them
We have updated the summary section (shown above) of the LTV section to show these important metrics. You can also delve deeper into these metrics and get an in-depth view of what is driving them.
For example, if you’re an app marketer of an e-commerce app that has seen an uncharacteristic boost in sales in the past 7 days, you can use ARPU to understand average revenue per user and what may be driving the sales spike for that time period. Go a step further and filter these users by those who received a specific in-app shoe promotion targeted at male users ages 18-30.
This helps you evaluate alternate buying theories like whether or not new users who shared an item via social media generate more revenue in the app than new users who added an item to their wishlist. You can then refine the onboarding process or app flow to guide users towards the highest revenue generating activities.
Although ARPU is a common SaaS metric, some mobile app analytics providers do not provide customers with a chance to chart ARPU over time. With the introduction of this metric Localytics customers can not only chart ARPU over time, but they can also compare and contrast ARPU with rich mobile app analytics data to deliver the best app marketing automation strategy across the mobile app lifecycle.
Another metric to pay attention to is Average Revenue per Paying User (ARPPU). ARPPU provides additional insight from what you can glean from ARPU as it measures the average amount of actual payments made during a defined period.
Perhaps you want to see if the recent sales promotion you sent in an in-app messaging campaign impacted your business over the last 30 days. Apply a segment filter to view users who received the campaign, then view the ARPPU for the period after the promotion to see if the campaign had any impact on your revenue goals. The insights derived here can be used to make future marketing campaigns more effective.
Understanding how users contribute to the revenue goals of your app is an important part of the app lifecycle engagement process. We want to make sure that you have a straightforward way to incorporate LTV data into your app reporting metrics.
ARPU, ARPPU and Cumulative Revenue per User are available metrics for all Localytics customers within the LTV section of the Localytics Dashboard. For additional information on how to get started, please contact your Localytics Account Manager.
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