This is the 1st post in a series of 6 posts. Here is a summary post explaining all the different calculators.
The customer LTV calculation method shown in this post is rather simple and is the most naive way to calculate the lifetime revenue per user.
Explanation of the customer LTV calculator
- ARPDAU – this is the average daily revenue per user – simply take the daily revenue in the segment (or for all users) and divide by the number of active users that day.
- Expected Lifetime – this is how long you users will likely to use the app – you can estimate that based on other apps or just wait until the users stop showing up.
- Estimated LTV per user
- Good to get a sense of the customer LTV rather than for real optimizations
- This method is a bit too simplistic and assumes all users stay the same period of time
- There is no way to know in advance how long users will stay
More methods to calculate user value
Here is a more advanced method to calculate the CLV based on limited retention data
You can also model out LTV in one segment based on data from other segments