Recoup the cost of attracting him, we nee him to use our app for at least five months. If users “live” in the project less on average, such a project is a “leaky bucket”. And attracting them at such a price is the same as making a bonfire out of money. Let’s assume that the user Peter “lives” in our imaginary application for an average of 8 months. According to financial statements, such a project is considere unprofitable during the first five months, and then becomes profitable. This is normal, investors are not intereste in profit in one current month, but in scaling. Business must grow, attract new users and do it as efficiently as possible. There are four important metrics in the Peter case study.
The main principle of profitable
Customer Acquisition Cost (CAC, $) — in the application: $10. Average revenue per user (ARPU, $) — in per month: $2. This indicator is also calle “average Jamaica B2B List check”. Lifetime – how long the user “lives” in the project on average: 8 months. Lifetime value (LTV, $) — how much one customer will pay us for the entire time of using the application. Calculate as follows: ARPU*Lifetime: $16. unit economics: LTV should be greater than CAC.
How much money one user brings
The magic of numbers: how to improve conversion by 1% and save 25% From the moment a user sees an ad until he pays $2 to use the app, he will go through AERO Leads several stages: loading; onboarding (registration, familiarization with the application); trial (free trial period); subscription. When moving from one step to another, some users “drop out” – change their mind, didn’t understand how to use it, didn’t like it, etc. Conversion is the percentage of users who clicke through. For example, if app N was downloade by 1000 users after an advertising campaign, 5% of them installe the free trial version – 50 people.
