10 Ways to Boost LTV for Subscription Apps

An introduction to LTV for subscription apps and guides on how you can improve it.

Applications are becoming more and more prevalent in everyday life. The services provided by these applications are integral contributors to improving efficiency and accessibility, hence improving the overall quality of life. As an application developer, we would aim to offer such services on a subscription basis. We must take proper initiatives to ensure the longevity of subscription durations while having reasonable revenue and reach. To achieve the same, it is essential to understand LTV (lifetime value) and how to improve its parameters to maximize the desired output.

What is LTV for Subscription Apps?

LTV or lifetime value is a parameter to measure a customer or client's value to an organization across the duration of using the latter's product. As in the comprehensive guide of mobile app metrics, LTV is a key metric for mobile app revenue. With clear evaluation of the mobile app users’ LTV in a specific time frame, app marketers can better estimate the return of investment of their marketing campaign, and adjust marketing budget accordingly.

Skillful understanding and usage of LTV can improve the revenue avenues such as in-app purchases, in-app advertisement, and subscriber base. By adopting data-driven decision-making, an optimal approach is followed to enhance user acquisition while still being profitable.

LTV has three key factors being:

  • Monetization
  • Retention
  • Virality

Monetization refers to the amount paid by users across their subscription lifetime. Retention refers to the amount of times the application gets revisited under a given time frame. Virality refers to the reach of the application. Virality is the measure of the number of new users (mostly unpaid) attracted by the existing users.

How We Calculate LTV for Subscription Apps?

Appflow.ai is an In-app Subscription Analytics Tool that help you make mobile subscription easy for tracking and doing paywall experiments. It collects data from your app, such as trials, installs, purchases, income, refunds, and much more, to produce relevant subscription analytics. To improve the sales performance model and increase your monthly subscription income, various data states and subscriber groups are compared and evaluated using multiple data relations. 

Appflow.ai calculates Life Time Value (LTV) by the following.

LTV=Average payment per user per month ÷ Churn rate for the period

First appflow.ai calculates the average payment per user for every month. Appflow.ai.ai then divides the value by churn rate. Churn rate is the number of subscribers who unsubscribed or stopped paying over a certain time period. Appflow.ai does the following to calculate churn rate.

Churn Rate=churned for the start of the period ÷ users for the start of the period × 100%

Appflow.ai has a time date-time picker that helps users to calculate LTV for different time frames. This option is helpful in understanding users' value to your subscription app for different time frames. Appflow.ai also provides data-based suggestion feature that gives tips and feedback to improve your LTV. Check out the image below for some sample tips appflow.ai provides.

10 Ways to boost LTV for Subscription Apps

Now that it is established that LTV plays a key role, we need to employ appropriate strategies and methods to boost LTV for applications. As we could understand from the word combination of LTV = Lifetime + Value, to boost LTV for subscription apps is to extend the lifetime of app users and improve the value of app users in each subscription cycle. 


Here we listed 10 ways to do that:

  • Customer Experience(CX): Customers are deemed to be the make or break factor. Ensuring a seamless and flawless customer experience can increase the odds of more customers re-subscribing to the services. It also facilitates the customers to write positive reviews, boosting the app store ratings.
  • Introducing Referrals and Discounts: Discount has proven to be a surefire customer retention method. The customers are offered extra incentives, resulting in improved customer satisfaction. A referral is a low investment method of attracting new users. Existing users sending referrals to new customers increases the application's user base and the satisfaction of the old and new users.
  • Strong Social Media Presence: Most people spend long hours on social media. It is essential to show a strong presence in such spaces. Having an active social media account will help promote attractive deals to attract new users.
  • Improving the Value of product: Enhancing the product's capabilities gives customers a unique experience tailored to perfection. This sets us apart from the competition and minimizes the loss of customers.
  • Encourage Upselling: Attracting new customers into buying our products is far more expensive than persuading existing customers to upgrade their existing schemes. Proper steps must be taken to make the current users understand the advantages of upgradation, adding value on the customers' side and revenue on our side.
  • Leverage Deep Linking: Studies show that app users are likelier to opt for subscriptions over web users. Making some features app exclusive will motivate users to download the app for a better experience; this makes them more susceptible to subscription.
  • Improved onboarding: Users who are new to the application generally struggle to understand the UI. The applications must have proper instructions and be interactive simultaneously to enhance the user experience.
  • Collecting Customer Feedback: The application must be ever-evolving. The service must be tailored to the requirements of the customers. Proper customer feedback helps in understanding the expectations and the shortcoming of the application, which were not visible during the testing phase.
  • Recurring Payment Model: Recurring model is one of the most potent ways to improve LTV. This ensures a constant and steady flow of income while influencing the customers to stay longer. Customers also benefit by not needing to act on their invoices every billing cycle.
  • Target the right demography: Choosing the appropriate target audience is extremely important. The application developed must cater to the needs of enormous demography. When the above conditions are satisfied, the application would have a massive demand in the market.

Final Thought

Tremendous amounts of effort are expended to develop applications. Even with the application being technically sound, a continuous income and a solid user base are deemed to be an absolute necessity. Understanding the concept of LTV is critical in satisfying the conditions given above. Appflow.ai is a real lifesaver in calculating the LTV for different time frames. Appflow.ai also provides data-driven suggestions, which help us better grasp the customer's mindsets, hence being able to cater to their needs better. I hope this article provided a good insight into ways to boost LTV for your subscription apps.

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