1 Tip for Free Apps….Retention = Profit

Oct 30

1 Tip for Free Apps….Retention = Profit

We talk to a lot of App owners,  many of them are developers who make advertising supported “free” Apps. These guys are really at the cutting edge of my favourite equation:

CPA < LTV

This means the Cost-Per-Acquisition must be less than the Lifetime Value of the customer.

The challenge for these “free” App makers is to be discovered and to produce a steady stream of Apps from their studio that makes a recurrent revenue stream from clicked ads. The challenges is that CPMs are so low in mobile that these Apps need something like 100K users to break-even.

Because StreetHawk has a per-seat pricing model, this is a bit of a show-stopper for most “free” players, so if you are one of those app-owners – just talk to us. We can figure something out based on actual traffic hitting our servers and the specific rulesets you want from us.

Back to the main point: If we revisit our famous retention curve, the game is still relevant to “free” app makers. The LTV (or ARPU) is directly correlated to the area under the retention curve.

Increased Actives Curves

We accept that all Apps may have a limited lifecycle for a user, what StreetHawk does is help make your App be remembered and valuable at the Right Time. If you get your users engaged at various points in the cycle, then the area under the curves increases.

Area Under the curves

In the shaded region the blue curve has significant user activity and engagement over the lifetime of App usage. The cumulative value of the blue users over the brown users is 3.4x or 340% more valuable.

Thats cash.

Thats LTV.

So free apps might be great but the question is how can you deliver context and relevence to users, so they don’t abandon your App too soon. In future posts, I’ll talk about tactics to help across the user lifecycle.

 

 

 

 

  Get our Referral Program Guide