Customer lifetime value refers to how much revenue players generate during the entire time they play your game. The higher your average customer LTV is, the more profitable your game will be. Learning how to increase customer lifetime value will help you boost revenue and provide you with greater budget flexibility to attract new players and make improvements to your game.
There are two main ways to increase revenue from a game. You can acquire more players or you can get the players you have to spend more money. The most profitable games excel at doing both of these things.
Increasing customer LTV not only generates more revenue for your game but also helps you acquire more players. The more revenue each player generates, the more you can afford to spend on player acquisition. There are many steps you can take to improve the average customer LTV.
Before you can raise your customer LTV, you first need to know what it is. There are many different ways you can calculate LTV, and the best formula for you depends on the data you have.
The simplest way to calculate average LTV is to divide total revenue by the total number of players you have. This method works best for established games that already have a substantial amount of data to work with.
Many LTV models incorporate the average revenue per user and average revenue per daily active user into their calculations. For example, you could calculate LTV as ARPDAU x User lifetime.
Whichever method you use, be consistent with it. To track how your customer LTV is changing, you must calculate it in the same way every time to make a meaningful comparison.
In 2022, free-to-play mobile games accounted for $13.2 billion of the $25.2 billion mobile games market. The free-to-play model works best for casual games, indie games, and other titles that do not have the name recognition to convince players to pay an upfront fee to play. Games that offer substantial value, such as AAA titles, may charge a download fee, but even many of these games have transitioned to F2P revenue models.
Most F2P games rely on a mix of ads and in-app purchases to generate revenue. Some publishers offer a freemium model where players can purchase an ad-free version of the game or a subscription that provides players with additional perks they don’t get with the free version. You can increase customer lifetime value by choosing the revenue model that works best for your game and target audience.
Engaged players are more likely to make purchases and play for a long time. Retention is essential because the longer customers keep playing your game, the more opportunities they have to generate revenue and the higher their LTV will be.
Update your content and features frequently and respond to player feedback. Target users who are the most likely to play your game long-term in your player acquisition campaigns.
Monetizing your game requires carefully balancing revenue-generating opportunities with gameplay. If you hit players with ads or sales pitches too soon, they are likely to quit playing your game.
Give players a chance to fall in love with your game before you prompt them to buy something or watch an ad. Place ads at natural stopping points so they don’t interrupt gameplay. Utilize rewarded or playable ads to keep players engaged and reduce churn.
Increase customer lifetime value by offering players the chance to buy something when they are the most likely to want to make a purchase. For example, the screen players see when they fail a level is a good place to offer the opportunity to purchase a second chance to continue the level without starting over.
There are so many competing games that it is critical to ensure your game offers players something they can’t get from a competitor. One way to do this is to personalize player experiences based on what you know from soliciting player feedback and analyzing player data.
When you understand what motivates your players, you can better tailor your game and your engagement, retention, and monetization efforts to their preferences. For example, you can personalize push notifications so that competitive players receive updates about tournaments and in-game progress while social players get notifications when their friends are online.
Players who play every day or multiple times per day are more likely to buy something or watch an ad than those who only play occasionally. Track the frequency of log-ins and analyze your data to determine why players start logging in more or less often. Use what you learn to encourage more frequent play sessions.
Keep adding content to motivate players to log in to see what is new. Use push notifications and email messages to alert players about new content and convince people who are losing interest to come back.
Sonamine offers engagement, retention, and monetization services that address all aspects of improving customer LTV. Our team can show you how to increase customer lifetime value by collecting and analyzing player data and help implement live ops features to improve retention and engagement. Contact us today to get started.
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